The American Bankers Association is creating a division that it hopes it will inspire farmers who seek credit to choose commercial banks over the government-sponsored Farm Credit System.
The division, named the Center for Agricultural and Rural Banking, is to offer bankers, farmers, and ranchers an Internet site, training sessions, and other resources for timely information on topics such as agricultural banking policies, financial management for farmers, and government-backed farm loans.
The first step will be to hire a contractor to build the Web site, www.usfarmloans.com. Once the site is in operation, the ABA hopes to fill it with information on state and federal agricultural programs, instructions for farmers on how to buy crop insurance, agricultural economic data, and farming forecasts.
"This will not only be good for agricultural banking but ag communities as a whole," said Harley Bergmeyer, president and chief executive officer of the $57 million-asset Saline State Bank in Wilber, Neb. "There's so many things we as bankers can do to help build up our agricultural communities and help our customers."
John Blanchfield, director of the new division, said he hopes the site's general name will steer loan-seeking farmers toward commercial banks. They otherwise might stumble upon the Farm Credit System site, www.farmcredit.com, and go to local Farm Credit lenders, he said.
"I saw the potential and the threat of the Internet a few years ago when the Farm Credit System set up their site and started interlinking their members to the portal," he said. "If you hit that portal, you can connect to virtually any Farm Credit institution. That got my attention."
The ABA announced plans to form the division - an outgrowth of its agricultural and rural development department - at its National Agricultural Bankers Conference in November.
This week the division is to host its first two events - seminars scheduled in Washington Tuesday and Thursday with banking consultant Bert Ely, which are to focus on the threat to commercial banks posed by the government-funded Farm Credit System.
"The agricultural economy is changing so fast that rural America is confronting issues it never faced before," Mr. Blanchfield said. "Rural bankers might need to know how to put together guaranteed loan programs for new manufacturing plants as their economies diversify. Farmers need more information on how banks provide credit."
In coming months, the division plans to hire more staff members, including an assistant director, and to make use of ABA employees who already work on agricultural and rural banking issues.