ABSTRACT
This chapter describes some of the past federal actions to address market efficiency and social equity concerns, their rationales, and available evidence regarding their effectiveness. It presents some of the economic arguments for and against continued intervention in these markets. Federal intervention in agricultural credit markets is substantial and achieved through many mechanisms. Federal credit programs and government-sponsored enterprises are the most visible types of federal intervention. Federal credit programs have had many specific objectives pertaining to market efficiency and social equity. Federal support affects a large share of the agricultural credit market. The chapter focuses on the economic rather than political merits of federal intervention. Politics and rent-seeking aside, motivations for federal intervention in farm credit markets can be summarized into two categories: enhancing economic efficiency and addressing concerns about social equity. The Farm Credit System was an integral part of federal credit policy and was given responsibility to administer some federal farm lending programs.
