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As a source of investment capital, the system is beneficial to local communities and encourages the development of industries in rural areas.

The credit provdied by the first two services in the system outlined above is primarily for general agricultural purposes.

The third credit service, Banks for Cooperatives, exists under authority of the Farm Credit Act of 1933.

The Banks for Cooperatives were established to provide a permanent source of credit on a sound basis for farmers' cooperatives.

Types of loans

Three distinct classes of loans are made available to farmers' cooperatives by the Banks for Cooperatives: Commodity loans, operating capital loans, and facility loans.

Eligibility

To be eligible to borrow from a Bank for Cooperatives, a cooperative must be an association in which farmers act together in processing and marketing farm products, purchasing farm supplies, or furnishing farm business services, and must meet the requirements set forth in the Farm Credit Act of 1933, as amended.

Interest rates

Interest rates are determined by the board of directors of the bank with the approval of the Farm Credit Administration.

Contact

For further information, contact the Bank for Cooperatives serving the region, or the Farm Credit Administration, Research and Information Division, Washington 25, D.C..

Printed material

Available, on request, from U.S. Department of Agriculture, Washington 25, D.C., are: Cooperative Farm Credit Can Assist In Rural Development ( Circular No. 44 ), and The Cooperative Farm Credit System ( Circular No. 36-A ).