A year and a half after soliciting the business, the Farm Credit Corporation has decided to stop being a deposit holder for Net Income Stabilization Accounts.
Effective March 31, 1999, the FCC will get out of the NISA business, the corporation announced in its annual report published last week.
It will mean the $91.7 million invested by 23,206 farmers in NISA held by FCC will be transferred to other financial institutions.
The corporation said the decision came because it has decided to focus on its core business as money lender to farmers and farmer-controlled, value-added businesses.
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Becoming a NISA deposit holder “does not mesh with the future direction of the corporation,” said the annual report.
In January 1997, the FCC was singing a different tune. It encouraged farmers to try the FCC as they were faced with a decision about where to place deposits.
The government made it easier by deciding that if a farmer had not chosen a financial institution to hold his account by May 31, 1997, it would automatically go to the FCC.
“We feel we can offer farmers the opportunity to leave (their funds) with an institution that invests in agriculture and only agriculture,” FCC assistant vice-president for product development Wes Gordon said at the time.
He said if farmers acted quickly, they could receive a higher interest rate than NISA was paying.
Not core business
But farmer response was “well below our target,” said the FCC annual report for 1997-98. And acting as a NISA deposit holder dilutes the corporation’s focus on its core mandate.
However, it still supports NISA. “FCC continues to strongly support participation in the NISA program as a good business decision for producers.”
