Annual Report - CoBank

Young, Beginning, and Small FarmersCoBank, ACBUnder the Farm Credit Act, CoBank does not have authority to lend directly to young, beginning, and small farmers. Rather, werecognize that Associations serve young, beginning, and small farmers, which we support through wholesale funding, partnering onAssociation programs as they deem appropriate, and completing reporting required by regulations. We believe the future of agricultureand rural America is well served when loan programs are developed by Associations to aid ambitious and capable young, beginning,and small farmers. Therefore, we have adopted a written policy that encourages the board of directors at each of our affiliatedAssociations to establish a program to provide sound and constructive credit and other services to young, beginning, and small farmersand ranchers and producers or harvesters of aquatic products (YBS farmers and ranchers). Each affiliated Association provides usannually with a report measuring achievement with respect to these programs for YBS farmers and ranchers. A summary of thecombined reports for our affiliated Associations and certain participations CoBank purchased from Associations follows.YBS Farmers and Ranchers ($ in Thousands)Loan NumbersPercent ofNumber PortfolioLoan VolumePercent ofDollars PortfolioLoans and Commitments Outstandingat December 31, 2011:Young 9,120 16.10 % $ 1,971,3028.34 %Beginning 13,516 23.86 2,773,586 11.74Small 15,961 28.17 1,877,090 7.94Gross New Loans and CommitmentsMade During 2011:Young 2,569 13.76 % $ 503,4146.95 %Beginning 3,846 20.60 665,974 9.20Small 3,981 21.32 285,514 3.94Small Farmers and RanchersNumber / Volume of Loans Outstanding by Loan Size at December 31, 2011Number / Volume$0 –$50,000$50,001 –$100,000$100,001 –$250,000$250,001and greaterTotal Number of Loans to Small Farmers and Ranchers 7,340 3,369 3,533 1,719Total Loan Volume to Small Farmers and Ranchers ($ in Thousands) $ 153,965 $ 248,369 $ 559,399 $ 915,357Key definitions are as follows:Young Farmer and Rancher – A farmer, rancher or producer or harvester of aquatic products who is age 35 or younger as of thedate the loan was originally made.Beginning Farmer and Rancher – A farmer, rancher or producer or harvester of aquatic products who has 10 years or less ofexperience at farming, ranching or producing or harvesting aquatic products as of the date the loan was originally made.Small Farmer and Rancher – A farmer, rancher or producer or harvester of aquatic products who normally generates less than$250,000 in annual gross sales of agricultural or aquatic products at the date the loan was originally made.The Young, Beginning, and Small farmer and rancher categories are not mutually exclusive, therefore, certain farmers andranchers may be classified in more than one category in the tables above.Beyond providing appropriate wholesale lending for Association YBS farmers and ranchers programs and submitting reports toour regulator, CoBank has partnered with Associations on successful financing programs designed to attract quality farm operations,meeting the intended purpose of providing vital capital to start-up farming operations and promoting the flow of capital into ruralareas. CoBank also has its own programs to serve the credit needs of agribusiness cooperatives and rural infrastructure providers of allsizes as well as rural communities using our mission-related investments authorities. CoBank has also reached out to non-traditionalforms of agricultural production, such as local foods, community supported agriculture, and urban agriculture, to better understandtheir financing needs within the legal constraints of CoBank lending authorities.CoBank 2011 Annual Report141