The Farm Credit Corporation (FCC) held its annual public meeting in southern Alberta last month. President and CEO Greg Stewart along with senior officers and board members mingled with area clients and others at a meeting to showcase the corporation and its role in Canada’s agriculture. The Lethbridge event was the third such meeting, following meetings in Regina and Moncton in ‘07 and ‘08.
No longer a lender of last resort, FCC has developed a vision of itself as the ideal lender for farmers and agricultural businesses. The annual public meeting is one part of that vision, as meeting clients in their own area helps FCC understand regional agriculture so they can serve farmers and agribusiness better. The entire board of directors from all areas of Canada met in Lethbridge before the public meeting.
FCC is celebrating 50 years in business. In 1959 the corporation offered only loans for first-time farmers at a set interest rate and a maximum loan of $25,000. Now, it can offer various types of loan to a maximum of $45 million, with financing plans that suit each borrower’s needs. It has developed farm accounting and field record software packages. It even has a venture capital fund created in response to the lack of interest in agriculture from other venture funds. With $66 million availanle it can’t finance entire ventures but can help attract more substantial funding for initiatives such as commercializing biotechnology advances.
A presentation at the meeting showed some of the farms and businesses operated by FCC clients. It included large and small operations – a winery, cranberry, aquaculture, potatoes, beans, apples, and other fruit, as well as various types of livestock and grain operations.
Stewart and others emphasized that what sets FCC apart from other financial institutions is their focus on the customer. He has set “an extraordinary customer experience” as the first priority for the corporation over the next 10 years. The other priorities are business efficiency and continued development of FCC’s culture – being a caring and responsible part of agriculture and a good corporate citizen.
“By paying attention to these three areas we are on the right track to building a sustainable future for Canadian agriculture,” said Stewart. “We’re here for the long term and we know agriculture.”
Working with people through difficulties is a feature of FCC that differentiates FCC, says Clem Samson, vice-president of western operations (Alberta and BC). “We do our best to stay in contact with people in difficulty,” he says. “We understand the government support programs and we can be flexible and may be able to offer out-of-the-box financial support.”
Samson says downturns in an industry don’t discourage FCC lending. “We’d consider a beginning farmer loan for beef cattle today, as long as there was some strong risk management in place,” he says.
Chief financial officer Moyez Somani presented highlights of FCC’s financial performance. Over 16 years of continuous growth in the corporation’s assets has resulted in a portfolio of $17 billion. Somani said that although the corporation’s deals only with farmers and agribusiness, tough times even in large sectors like the pork industry or cattle do not seriously affect its position.
“Our financial picture is strong, and so diversified that even a major downturn in one sector doesn’t really affect us,” he said. “Because our portfolio is diversified, we spread our risk. And that allows to work with those in need of support during downturns.”
Somani and the other FCC leaders are say they are particularly proud of the corporation’s efficiency and expenses as a proportion of revenues from interest and other sources. He says FCC’s costs are 43.4 per cent of its income compared to 55 to 70 per cent for most financial institutions.
The Crown Corporation returned $22.8 billion to the federal government in 2008. It also contributed $1 million to community projects in small towns and maintained its ongoing support for 4H and food banks.