Federal Agricultural Mortgage Corp. (AGM)

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Farmer Mac was created in response to the farm credit crisis of the mid-1980’s and
subsequent calls from commercial rural bankers for a liquidity source similar to that
provided for residential mortgages by the so-called housing GSEs, Fannie Mae and
Freddie Mac. Amendments in 1996 to Farmer Mac’s authorizing legislation have
allowed this GSE to grow its business and achieve economic viability, which was by no
means certain in the first few years of its operation. To illustrate that point, the new
authorities provided in the Farm Credit System Reform Act of 1996 (1996 Act), helped
launch Farmer Mac’s first year of positive earnings in that year, when net income was
$777,000. Net income generally has risen as rapidly as program growth since then and
reached $25 million at year-end 2003, representing a 5-year average annual growth rate
of 35 percent while program growth averaged 37 percent over the same period.


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