Separating FACT from FICTION by ProQuest

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The Farm Credit System (FCS), a $180 billion-asset farm cooperative lender looking to expand its lending powers, has anointed itself the leading financer of biofuels. The FCS has fostered a series of misleading statements aimed at disparaging the banking industry's role in financing ethanol and biofuels. ICBA and the American Bankers Association jointly commissioned an independent firm to take a factual look at how the ethanol industry has been financed. The report, US Ethanol Investment Overview, conducted by New Energy Finance Ltd, drew on an extensive database of financial transactions in the energy industry and showed that while the FCS has financed 8% of the ethanol market since 2004, commercial banks and private lenders have financed 56% of this market -- seven times more than FCS's contributions. ICBA research has also shown that the average lending limit suggested by the FCS for community banks reflects only the smallest banking institutions.

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