May 24, 2014
Mr. Barry F. Mardock
Deputy Director-Office of Regulatory Policy
Farm Credit Administration
1501 Farm Credit Drive
McLean, Va 22102-5090
Dear Mr. Mardock:
Thank you for the opportunity to comment on FCA's recent proposed rule regarding Standards of Conduct. Adherence to appropriate Standards of Conduct are important to the integrity of the Farm Credit System and a topic which should be carefully considered. The FCA's proposed rule, however, is flawed doing more harm than good, and needs substantial revision.
As a director of the Fresno Madera Farm Credit, I find the pre-transaction disclosure requirements in the Conflicts of Interest section, to be inappropriate and unworkable. The proposed rule ignores my association's cooperative structure and the way I do business in my operations.
My operations consist of a vertically integrated farming, processing, and marketing of raisin grapes. In the processing portion of my business, I'm involved in purchasing grapes and raisins from many growers other than my own. I also provide a service to these growers in the re-cleaning of weather damaged raisins. This work must be done within hours of the damage, a real race against time. I usually do not know which of these growers finance with the FMFC, but there is no conflict of interest, as no director has a role in loan approvals.
Requiring me to disclose in advance any transaction with a FMFC customer, even if I knew I was doing business with a FMFC customer, is unrealistic. The time required to get approval in advance, when damaged fruit is spoiling in the field, is not workable due to the limited time to save the damaged fruit. Also, the number of transactions, would create a paperwork monster with no impact on any conflict of interest. Finally, the proposal will discourage many qualified people from serving on our Board.
I urge the FCA to reconsider and revise the proposed rule prior to issuing a final ruling. I also would like to offer my support for the comments to be submitted or already submitted by the FMFC, other Farm Credit Associations, CoBank, and or the Farm Credit Council. Thank you for your consideration .
Victor S. Sahatdjian, Director, Fresno Madera Farm Credit.
Sent from my iPad.