When looking to the Call Code Report for instructions in defining "Loans to finance agricultural production" we have questions about what qualifies as "agricultural production".

We have a customer who produces and sells flower seeds on a massive scale. We reported this loan as a business, auditors are saying it is a farm loan.

We had interpreted farm or agricultural purposes to be those that produce food for consumption, whether it be for human or animal consumption.

How do we define the term agricultural production in keeping with CRA?

You totally follow the call report definitions; the call report category will drive the CRA category.

I would consider that financing agricultural production, and it should be categorized that way on the call report.

Include as loans to finance agricultural production and other loans to farmers:

(1) Loans and advances made for the purpose of financing agricultural production, including the growing and storing of crops, the marketing or carrying of agricultural products by the growers thereof, and the breeding, raising, fattening, or marketing of livestock.

Some of these determinations are extraordinarily complicated. Agree with Kaybee that the Call report should drive the reporting and that we would consider this an ag loan.

One way to look at it, is are they growing/raising something and selling it for a profit? We also sometimes refer to the NAICS codes to help us in our determination.

We have had similar struggles making determinations on Ag related businesses as well as an Apiary. Don't even get me started on the worm farm...

In regard to you using food grown for consumption as the determining factor, I would not rely on solely on that. For example forestry falls under Ag (growing tree plots which will eventually be used for timber) but will never be consumed.

Best of luck!