Farm Credit Canada

Farm Credit Canada

July 21, 2011 13:52 ET

FCC Invests in an Industry That Matters: Agriculture, Says Annual Report

REGINA, SASKATCHEWAN--(Marketwire - July 21, 2011) - Canadian producers and agribusinesses chose to do business with Farm Credit Canada (FCC) in record numbers, according to the FCC Annual Report released today. "Customers tell us that FCC understands the industry. They value the flexibility and relationships we offer," says Greg Stewart, FCC President and CEO. "Agriculture matters a great deal to this country and we are proud to serve and advance this complex industry."

In the fiscal year ending March 31, 2011, FCC approved $6.2 billion in disbursements to farmers, processors and suppliers along the agriculture value chain. Over 42,000 loans were disbursed, with an average size of $146,000. The FCC portfolio grew to $21.3 billion, and FCC continues to be Canada's leading agriculture lender. Net income was $459.2 million, which is reinvested in agriculture and also ensures that FCC remains financially strong and stable in order to serve the industry through all cycles. FCC does not receive appropriations from the federal government and pays a dividend to the Government of Canada each year.

"FCC continues to be a self-sustaining Crown corporation that provides quality financial and business services to a dynamic industry," says Agriculture Minister Gerry Ritz. "With 100,000 customers, it is particularly gratifying to see how FCC supports young producers, not only lending of $1.6 billion last year to those under the age of 40, but also through many learning opportunities that advance producers' knowledge."

"Agriculture is a major engine of economic growth in this country that deserves Canadians' respect and support," says Stewart. "Our farmers feed Canadians and people across the world, often amidst major challenges. This year has been a very tough weather year in some parts of the country, and, as it has done in the past, FCC offered its customer support program to those impacted." Stewart adds, "Our experience is that individual producers and agribusinesses consistently work through challenges and keep on top of trends. I am continually impressed by our customers."

Agriculture is an incredibly diverse industry with many opportunities. "In fiscal 2010-11, producers and agribusiness operators continued to face volatility in the markets, the value of the Canadian dollar, input prices and continued fallout from the global financial crisis," explains Chief Operating Officer Rémi Lemoine. "At the same time, Canadian producers are resilient and innovative and this – along with a banking system that continued to be held up as an example to the world – bodes well for the future."

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New Chief Financial Officer Rick Hoffman shares the following financial highlights from fiscal 2010-11:

  • Disbursements of $6.2 billion
  • Total lending portfolio grew by $1.6 billion to $21.3 billion
  • Net income of $459.2 million, which is reinvested in agriculture and ensures that FCC remains self sustaining
  • Allowance for credit losses of $586.2 million
  • Return on equity was 19.5 per cent, up from 14.0 per cent last year
  • Debt-to-equity ratio decreased to 7.4:1 from 8.4:1 in 2009-10
  • Arrears of $41.7 million, versus $42.2 million in 2009-10
  • Renewal rates on loans increased by 0.4 per cent to 97.7 per cent
  • Write-offs, net of recoveries, were 0.3 per cent of loans receivable at $58 million
  • FCC Ventures, the corporation's venture capital business, funded $12.1 million in new investments

Other highlights include:

  • FCC re-invests in agriculture programs, including:
  • over 13,000 people attended 151 core FCC Learning events
  • providing management publications such as the Knowledge Insider, AgriSuccess, the weekly FCC Express agriculture e-newsletter and e-learning webinars and videos
  • granting $1 million toward 104 rural capital projects in communities across Canada – www.agrispirit.ca
  • awarding $50,000 through the FCC Expression Fund to support the use of Canada's official languages in Canadian communities – www.fccexpressionfund.ca
  • offering an ag Safety Fund
  • FCC honoured five women from across Canada who are active leaders in agriculture with the FCC Rosemary Davis Award – www.fccrosemarydavisaward.ca
  • Working with community partners and customers, the FCC Drive Away Hunger campaign raised awareness about hunger and collected a record 1.7 million pounds of food across Canada

"The future of Canadian agriculture looks bright," says Jean-Philippe Gervais, FCC Senior Agriculture Economist. "Income growth in emerging countries is fuelling demand for agri-food products, an area where Canadian producers and processors have a comparative advantage. The emergence of stronger consumer preferences for food safety, healthy foods and specialty products is creating new market opportunities for producers here at home."

The FCC annual public meeting will be held in Victoria on August 17, 2011. A full copy of the report can be found at FCC Annual Report. For more information about FCC, visit www.fcc.ca.

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