Lowell Junkins, a Lee County resident, is doing his part to assure the current economic problems do not hurt agriculture. Junkins joined other American financial leaders in working to correct Farmer Mac’s defense against investments.
Farmer Mac, a $9 billion company, does not lend directly to farmers but instead stays behind the scenes. By providing a secondary market, the company helps finance the financial institutions farmers use.
â€œWe tend to bring lower cost money to financial institutions and hopefully the low cost money is passed on to the farmer,â€ Junkins said to Daily Gate City. â€œWe facilitate getting the cost of the loan down.â€
Banks that loan to farms, ranches and other rural businesses generally to go Farmer Mac to buy agricultural loans. Farmer Mac sells loans guaranteed by the U.S. Department of Agriculture to secondhand markets. Lenders then distribute the farm and ranch loans.
Farmer Mac was created in 1987 to provide security to the agriculture industry after an economical crash. The problem is Farmer Mac is exactly where it was over 20 years ago. In September 2008 Farmer Mac lost $92 million due to investment of stocks in Fannie Mae and Lehman Brotehrs.
â€œSure we’re (farm economy) in harm’s way,â€ Junkins said. â€œBut there is reason for hope that we will come out all right. I would point at how we came out of the ’80s. We are stronger because we came out of the ’80s. With the proper financial tools in the tool box, we will be all right.”
â€œBut this (economic meltdown) is like a new strain of the flu. We don’t know quite how to deal with it yet. I don’t know if things will respond the way things did in the past. There is no CAD program to design this from. That’s what private enterprise and the government and worldwide financial institutions are going through right now.â€
In October 2008 Farmer Mac management and Junkins’s board raised $65 million by issuing senior preferred shares. Selling more preferred stock raised $50 million in December. All money was raised without government funding.
Junkins was appointed to his position by President Clinton in 1996 and re-instated by President Bush.
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