FEDERAL AGRICULTURAL MORTGAGE CORP

Farmer Mac is the only federally-chartered corporation established to provide a secondary market for agricultural mortgage loans, infrastructure loans, and USDA Securities, but faces competition from other entities that purchase, retain, securitize, or provide financing for the types of assets eligible for our secondary market activities. These entities include commercial and investment banks, insurance companies, other FCS institutions, financial funds, and certain government programs. We also compete indirectly with originators of Eligible Loans that would prefer to retain the loans they originate rather than sell them into the secondary market. We are able to compete to acquire Eligible Loans due to the variety of products we offer and our ability to offer competitive funding structures and pricing to our customers. This enables us to provide flexible financing options and products designed to meet the varied needs of lending institutions related to capital requirements, liquidity, credit risk, and management of sector and geographic concentrations and borrower exposure limits. The relative competitiveness of our loan rates and our ability to develop business with lending institutions are affected by many factors, including:

•the overall supply of capital available to agricultural and infrastructure borrowers;

•the types and variety of products offered by our competitors to meet the needs of our customer base;

•changes in the levels of available capital and liquidity of lending institutions;

•the existence of alternative sources of funding and credit enhancement for lending institutions;

•the rate of growth in the market for Eligible Loans; and

•demand for our products.

Because our Charter limits our business to secondary-market activities, our competitive position is affected by the willingness of originators to offer Eligible Loans for sale in the secondary market or to use us for funding syndicated or participated loans. The Charter's limits on loan size for some Agricultural Finance mortgage loans, as well as the types of loans that are eligible for our lines of business, also affect our competitive position. For more information on government regulations applicable to us, see "Business—Government Regulation of Farmer Mac."

Our ability to obtain competitive funding in the debt markets is essential to our ability to maintain our market share and competitive position with our customers. As a result, competition for debt investors with other debt-issuing institutions, such as the FCS, Federal Home Loan Banks, Federal National Mortgage Association ("Fannie Mae") and Federal Home Loan Mortgage Corporation ("Freddie Mac"), and highly-rated financial institutions, can affect the price and volume at which we issue debt and therefore our ability to offer competitive products to customers.