FCS ALLIANCE WITH UNIVERSITY OF ILLINOIS LENDS FINANCE EXPERTISE

1^st Farm Credit Services clients will see dividends as a result of a strong working relationship between the organization, Farm Credit Services of Illinois, and the University of Illinois College of Agricultural, Consumer, and Environmental Sciences.   

On June 4th, leaders from 1st Farm Credit Services, the University of Illinois, and Farm Credit Services of Illinois held the 2004 Agricultural Seminar in Normal, IL.  A wide array of  pertinent strategic topics were discussed: competition, client needs, capital requirements, crop insurance, risk rating processes, relevant university economic research, and how we can partner to better serve our clients.  The session also provided an excellent opportunity for 1st FCS management to further enhance a solid working relationship with key leaders at the university.   

Dr. Peter Barry, professor and distinguished chair of Agricultural Finance at the University of Illinois, served as facilitator at the June seminar.  According to Barry, a strong working relationship between Farm Credit Services and the University of Illinois dates back several decades. 

“It goes way back,” states Barry.  “There were a few U of I ag faculty members in the 1930’s and 1940’s that helped form the 1st Production Credit Association in Champaign.”  The Production Credit Associations (PCA) were the first Farm Credit organizations set up after the 1923 Agricultural Credit Act was signed by Congress. PCA’s were set up based on regional districts around the country and funded through federal loans.

The direct relationship has more recently intensified through the Farm & Rural Business Finance Center at the U of I.  Dr. Barry holds the position of center director.  The center focuses on issues surrounding availability and use of financial capital for farm and rural businesses.  The work of the center revolves around three main areas:   financial management and performance of farm and rural businesses; financial markets and credit institutions serving rural America; and financial and credit policies and state and federal government programs affecting agricultural finance. 

The Farm & Rural Business Finance Center has established relationships with 1st FCS President and CEO Wayne Gustafson, and FCS of Illinois President and CEO Ron Frenn.  In addition, members of the center have ties to all three organizations.  Dr. Barry brought up Delmar Banner, the center vice-chair. 

“Del Banner has a unique role to play since he is also involved with the associations,” said Barry.  “He has a farm, has a law practice in town (Champaign), and works with us on an adjunct professor basis.  He has a government relations history with the Farm Credit Council.  When a lot of the enabling legislations for Farm Credit were established in 1980 he was the president of the council and oversaw that process.  So, he is a nice linkage.”

he tie between these three organizations has proven to be beneficial to the clients.  “I like to think that our finance center’s work over the years has resulted in a reduction of interest rates by five basis points, which is five 100ths of a percent,” said Barry.  Applied to the nearly $160 billion dollars in farm debt nationwide, saving several million dollars is what Barry refers to as his “heroic claim”.

“That is a way to visibly demonstrate how, though some of the decision tools and risk rating information, we can help keep those borrowing costs lower and more competitive,” Barry said. 

It seems the working relationship truly is working.  Dr. Barry mentions that Farm Credit Systems must provide specialized service though both good and bad economic times.  The needs of the service must be tailored to what the client needs.  “I think the Illinois associations are in the vanguard of the system in understanding those needs and how they are changing in agriculture,” he said

The University of Illinois’ farmdoc website provides access to critical financial management and economic tools.  The site may be accessed at www.farmdoc.uiuc.edu. The site provides a wide array of interesting decision-making tools, along with other important information which may be of critical importance. 1st FCS endorses the site. We encourage our clients to utilize the information and tools available when making financial decisions.