Definition
The Federal Intermediate Credit Bank (FICB) is one of 12 banks established to facilitate the availability of funds to agricultural lenders such as production credit associations, commercial banks, agricultural credit corporations, livestock loan companies, and other institutions that extend credit to crop farmers and cattle raisers. These banks enable agricultural producers to obtain the necessary financing to carry out their operations by providing loans and financial services. The stock of each Federal Intermediate Credit Bank is owned by farmers and ranchers, emphasizing the institution’s direct linkage to the agricultural community.
Examples
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Production Credit Associations (PCAs): PCAs use funds from Federal Intermediate Credit Banks to provide short- and intermediate-term credit to their members, who are primarily farmers and ranchers.
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Livestock Loan Companies: These companies receive funding from FICBs to offer loans to cattle ranchers for the purchase and maintenance of livestock, ensuring that ranchers have access to necessary financial support.
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Agricultural Credit Corporations: These entities secure funds from FICBs to extend credit for various agricultural projects, including crop production, harvesting, and storage.
Frequently Asked Questions (FAQs)
What purpose do Federal Intermediate Credit Banks serve?
Federal Intermediate Credit Banks provide financial resources to local agricultural lenders to ensure that crop farmers and cattle raisers have access to necessary loans and credit facilities.
Who owns the Federal Intermediate Credit Banks?
The stock of each Federal Intermediate Credit Bank is owned by farmers and ranchers, ensuring that the control and benefits are in the hands of those they are designed to serve.
How do Federal Intermediate Credit Banks support agricultural communities?
By providing funds to institutions like production credit associations and livestock loan companies, FICBs facilitate the availability of loans and credit to agricultural producers, thereby supporting agricultural productivity and sustainability.
What types of loans are available through Federal Intermediate Credit Banks?
Federal Intermediate Credit Banks provide funds for various types of loans, including short-term, intermediate-term, and long-term loans, primarily focused on agricultural operations and equipment.
Are Federal Intermediate Credit Banks part of the federal government?
Federal Intermediate Credit Banks are part of the Farm Credit System, a network of financial institutions that are government-sponsored but privately held by their borrower-owners.
Related Terms
- Production Credit Association (PCA): A local cooperative that provides credit to agricultural producers, particularly for short-term needs.
- Farm Credit System (FCS): A nationwide network of lending institutions that offer a wide range of credit services to the agricultural sector.
- Agricultural Credit Corporation (ACC): An institution that provides financing for agricultural projects, including farming and ranching activities.
- Livestock Loan Company: A financial institution specializing in providing loans for the purchase and care of livestock.
Online References
Suggested Books for Further Studies
- “The Farm Credit System: History and Legislative Development” by Donald E. Kluver
- “Financing Agriculture: A Policy Analysis” by C.S. Reddy
- “Agricultural Finance: From Crops to Land, Water, and Rural Development” by Helyette Geman
Fundamentals of Federal Intermediate Credit Bank: Finance Basics Quiz
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