It is part of the mission of the Farm Credit System "to provide for an adequate and flexible flow of money into rural areas" (Farm Credit Act of 1971, preamble). In support of that mission, Yankee Farm Credit is authorized to make loans to farmers, farm-related businesses, and rural residents (with some restrictions). Beyond those authorities, we can make such other investments as the Farm Credit Administration (FCA) approves.
In the past few years, FCA has encouraged Farm Credit System institutions to make "mission related investments." These are investments that are related to our mission of supporting agriculture and rural America, but are outside our specific lending authorities listed above. These mission related investments can be either debt investments or equity investments.
"Mission related investments" are sometimes called other names. They are sometimes called "Investments in Rural America" or "agricultural and rural community (ARC) securities." I will just call them "mission related investments" or MRIs.
Background on MRIs can be found on FCA's web site. Look for Informational Memorandums dated 6/25/04 and 1/11/05. (There they are called "Investments in Rural America.")
In November 2006 FCA approved a pilot MRI program for CoBank and its affiliated associations for a period of three years ending 12/31/09. In December 2006 Yankee invested in its first equity MRI (Vermont Capital Partners). This year we are moving toward investing in our second equity MRI (FarmStart), and we recently obtained board approval to invest in debt MRIs (Rural Debt Obligations). Details about these three MRIs in the next three posts.
