Outgoing Farm Credit Corporation president Gerry Penney watched during the past nine years as the FCC was transformed from a money loser to a money maker.
He has heard the Canadian Bankers’ Association and a Senate committee call for the sale of FCC to the private sector.
He has heard some Reform MPs argue the FCC has had its day and should be closed down as a public-sector competitor for private-sector lenders.
Farm lender needed
And he has heard agriculture minister Ralph Goodale defend the continuing need for a federal farm lender.
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Penney says there are valid arguments on both sides.
“There is an argument to be made for privatization,” he said in an interview. “I would not like to see it swallowed up by another financial institution but there clearly is a market there that FCC as a private lending institution could service.”
On the other side is its role as an instrument of government policy, a money-making agency that can be used to deliver government programs.
“It is a means of making sure that credit is available to the industry in good times and bad,” he said. “The private sector does not have that commitment.”
On balance, Penney supports keeping the FCC in the public sector.
“I think the way it is structured now as a crown agency on a cost-recovery basis is probably the optimum for both government and the farm community.
“I guess the argument goes both ways. It would really depend on the political persuasion.”
