Edgar Filing: FEDERAL AGRICULTURAL MORTGAGE CORP

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

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Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
|X| Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12

FEDERAL AGRICULTURAL MORTGAGE CORPORATION
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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|X| No fee required.
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[ ] Fee paid previously with preliminary materials.

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0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

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FEDERAL AGRICULTURAL MORTGAGE CORPORATION

FARMER MAC

1133 Twenty-First Street, N.W.
Suite 600
Washington, D.C. 20036
----------------

TO HOLDERS OF FARMER MAC
NON-VOTING COMMON STOCK

April 18, 2003

Dear Farmer Mac Stockholder:

The Board of Directors of the Federal Agricultural Mortgage Corporation
("Farmer Mac" or the "Corporation") is pleased to invite you to attend the 2003
Annual Meeting of Stockholders of the Corporation to be held on Thursday, June
5, 2003, at 9:00 a.m. local time at the Embassy Suites Hotel, 1250 Twenty-Second
Street, N.W., Washington, D.C. 20037.

Although the type of stock you hold does not entitle you to vote at the
meeting and, accordingly, NO PROXY IS REQUESTED, we hope you will be able to
attend and suggest you read the enclosed Notice of Annual Meeting, Proxy
Statement and Annual Report, which will provide you with information about your
Corporation and the meeting. If you plan to attend the meeting, please advise
Farmer Mac's Corporate Secretary at the above address.

Sincerely,
/s/ Fred L. Dailey
----------------------
Fred L. Dailey
Chairman of the Board

FEDERAL AGRICULTURAL MORTGAGE CORPORATION

FARMER MAC

1133 Twenty-First Street, N.W.
Suite 600
Washington, D.C. 20036
----------------

TO HOLDERS OF FARMER MAC
VOTING COMMON STOCK

April 18, 2003

Dear Farmer Mac Stockholder:

We hope you will be able to attend the meeting and suggest you read the
enclosed Notice of Annual Meeting and Proxy Statement for information about your
Corporation and the Annual Meeting of Stockholders. We have also enclosed Farmer
Mac's 2002 Annual Report. Although the report is not proxy soliciting material,
we suggest you read it for additional information about your Corporation. Please
complete, sign, date and return a proxy card at your earliest convenience to
help us establish a quorum and avoid the cost of further solicitation. The
giving of your proxy will not affect your right to vote your shares personally
if you do attend the meeting. If you plan to attend the meeting, please so
indicate on the enclosed proxy card.

Sincerely,
/s/ Fred L. Dailey
----------------------
Fred L. Dailey
Chairman of the Board

FEDERAL AGRICULTURAL MORTGAGE CORPORATION
----------------

NOTICE OF ANNUAL MEETING
April 18, 2003

Notice is hereby given that the 2003 Annual Meeting of Stockholders of the
Federal Agricultural Mortgage Corporation ("Farmer Mac" or the "Corporation")
will be held on Thursday, June 5, 2003, at 9:00 a.m. local time at the Embassy
Suites Hotel, 1250 Twenty-Second Street, N.W., Washington, D.C. 20037.

As described in the attached Proxy Statement, the meeting will be held for
the following purposes:

Item No. 1 to elect ten directors, five of whom will be elected by Class A
Stockholders and five of whom will be elected by Class B
Stockholders, to serve until the next annual meeting of
stockholders and until their respective successors are elected
and qualified;

Item No. 2 to ratify the selection by the Audit Committee of Deloitte &
Touche LLP as the Corporation's independent auditors for fiscal
year 2003;

and to consider and act upon any other business that may properly be brought
before the meeting or any adjournment or postponement thereof. Please read the
attached Proxy Statement for complete information on the matters to be
considered and acted upon.

Holders of record of the Corporation's Class A Voting Common Stock and
Class B Voting Common Stock at the close of business on April 11, 2003 are
entitled to notice of and to vote at the meeting and any adjournment(s) thereof.

For at least ten days prior to the meeting, a list of Farmer Mac
stockholders will be available for examination by any stockholder for any
purpose germane to the meeting at the offices of the Corporation between the
hours of 9:00 a.m. and 5:00 p.m. local time.

Whether you intend to be present at the meeting or not, please complete the
enclosed proxy card, date and sign it exactly as your name appears thereon and
return it in the postpaid envelope. This will ensure the voting of your shares
if you do not attend the meeting. Giving your proxy will not affect your right
to vote your shares personally if you do attend the meeting. THIS PROXY IS
SOLICITED BY THE BOARD OF DIRECTORS OF THE CORPORATION.

By order of the Board of Directors,
/s/ Jerome G. Oslick
-----------------------
Jerome G. Oslick
Corporate Secretary

Table of Contents

Page
Voting Rights................................................................1
Proxy Procedure..............................................................2
Proxy Statement Proposals....................................................3
Board of Directors Meetings and Committees...................................3
Item No. 1: Election of Directors...........................................4
Information about Nominees for Director......................................5
Class A Nominees.......................................................5
Class B Nominees.......................................................7
Directors Appointed by the President of the United States..............8
Stock Ownership of Directors and Executive Officers..........................9
Report of the Audit Committee...............................................11
Executive Officers..........................................................12
Compensation of Directors and Executive Officers............................13
--Compensation of Directors.................................................14
--Compensation of Executive Officers........................................14
General...............................................................14
Compensation Committee Report on Executive Compensation...............15
Compensation Committee Interlocks and Insider Participation...........18
Summary Compensation Table............................................19
Option Grants During 2002.............................................20
Option Exercises and Year End Value...................................21
Equity Compensation Plans.............................................21
Employment Agreements.................................................23
Certain Relationships and Related Transactions........................24
Performance Graphs....................................................25
Item No. 2: Selection of Independent Auditors..............................27
Audit Fees......................................................28
All Other Fees..................................................28
Compliance with Section 16(a) of the Securities Exchange Act of 1934........28
Principal Holders of Voting Common Stock....................................29
Solicitation of Proxies.....................................................30
Other Matters...............................................................30
Appendix A: Proxy Card for Class A Voting Common Stock.....................A-1
Appendix B: Proxy Card for Class B Voting Common Stock.....................B-1

FEDERAL AGRICULTURAL MORTGAGE CORPORATION

FARMER MAC

1133 Twenty-First Street, N.W.
Suite 600
Washington, D.C. 20036

PROXY STATEMENT
For the Annual Meeting of Stockholders
to be held on June 5, 2003

This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of the Federal Agricultural Mortgage Corporation ("Farmer
Mac" or the "Corporation") of proxies from the holders of the Corporation's
Class A Voting Common Stock and Class B Voting Common Stock (together, the
"Voting Common Stock"). The proxies will be voted at the Annual Meeting of
Stockholders of the Corporation (the "Meeting"), to be held on Thursday, June 5,
2003, at 9:00 a.m. local time, at the Embassy Suites Hotel, 1250 Twenty-Second
Street, N.W., Washington, D.C. 20037, and at any adjournments or postponements
thereof. The Notice of Annual Meeting, this Proxy Statement and the enclosed
proxy card are being mailed to stockholders on or about April 18, 2003.

The Board of Directors will present for a vote at the Meeting the election
of ten members to the Board and the ratification of the appointment of Deloitte
& Touche LLP as independent auditors for the Corporation for fiscal year 2003.
The Board is not aware of any other matter to be presented for a vote at the
Meeting.

Voting Rights

One of the purposes of the Meeting is to elect ten members to the Board of
Directors. Title VIII of the Farm Credit Act of 1971, as amended (the "Act"),
provides that the Corporation's Class A Voting Common Stock may be held only by
banks, insurance companies and other financial institutions or entities that are
not Farm Credit System institutions. The Act also provides that the
Corporation's Class B Voting Common Stock may be held only by Farm Credit System
institutions. Holders of the Class A Voting Common Stock (the "Class A Holders")
and holders of the Class B Voting Common Stock (the "Class B Holders") must each
elect five members to the Board of Directors. The remaining five members of the
Board are appointed by the President of the United States, with the advice and
consent of the United States Senate. None of Farmer Mac's directors is or has
been an officer or employee of the Corporation.

The Board of Directors has fixed April 11, 2003 as the record date for the
determination of stockholders entitled to receive notice of and to vote at the
Meeting. At the close of business on that date, there were issued and
outstanding 1,030,780 shares of Class A Voting Common Stock and 500,301 shares
of Class B Voting Common Stock, which constitute the only outstanding capital
stock of the Corporation entitled to vote at the Meeting. See "Principal Holders
of Voting Common Stock."

The holders of Farmer Mac's Voting Common Stock are entitled to one vote
per share, with cumulative voting at all elections of directors. Under
cumulative voting, each stockholder is entitled to cast the number of votes
equal to the number of shares of the class of Voting Common Stock owned by that
stockholder, multiplied by the number of directors to be elected by that class.
All of a stockholder's votes may be cast for a single candidate for director, or
may be distributed among any number of candidates. Class A Holders are entitled
to vote only for the five directors to be elected by Class A Holders, and Class
B Holders are entitled to vote only for the five directors to be elected by
Class B Holders. Other than the election of directors, the Class A Holders and
Class B Holders vote together as a single class on any matter submitted to a
vote of the holders of Voting Common Stock.

The presence, in person or by proxy, of the holders of at least a majority
of the Corporation's outstanding Voting Common Stock is required to constitute a
quorum at the Meeting.

Proxy Procedure

Although many of Farmer Mac's stockholders are unable to attend the Meeting
in person, they are afforded the right to vote by means of the proxy solicited
by the Board of Directors. When a proxy is returned properly completed and
signed, the shares it represents must be voted by the Proxy Committee (described
below) as directed by the stockholder. Stockholders are urged to specify their
choices by marking the appropriate boxes on the enclosed proxy card. A
stockholder may withhold a vote from one or more Nominees by writing the names
of those Nominees in the space provided on the proxy card. Under those
circumstances, unless other instructions are given in writing, the stockholder's
votes will then be cast evenly among the remaining Nominees for its class. The
five Nominees from each class who receive the greatest number of votes will be
elected directors. If one or more of the Nominees becomes unavailable for
election, the Proxy Committee will cast votes under the authority granted by the
enclosed proxy for such substitute or other Nominee(s) as the Board of Directors
may designate. If no instructions are indicated on the proxies, the proxies
represented by the Class A Voting Common Stock will be voted in favor of the
five Nominees specified in this Proxy Statement as Class A Nominees, with the
votes being cast evenly among each of the Class A Nominees, and the proxies
represented by the Class B Voting Common Stock will be voted in favor of the
five Nominees specified in this Proxy Statement as Class B Nominees, with the
votes being cast evenly among each of the Class B Nominees.

Shares of Voting Common Stock represented by proxies marked "Abstain" for
any proposal presented at the Meeting (other than the election of directors)
will be counted for purposes of determining the presence of a quorum but will
not be voted for or against such proposal. If a proposal involves a vote for
which a broker (or its nominee) may only vote a customer's shares in accordance
with the customer's instructions and the broker (or its nominee) does not vote
those shares due to a lack of instructions, the votes represented by those
shares and delivered to the Corporation ("broker non-votes") will be counted as
shares present at the Meeting for purposes of determining whether a quorum is
present but will not be voted for or against such proposal. Abstentions and
broker non-votes (if applicable) will have the effect of a vote against such
proposals (except with respect to the election of directors). Because only a
plurality is required for the election of directors, abstentions and broker
non-votes (if applicable) will have no effect on the election of directors.

Execution of a proxy will not prevent a stockholder from attending the
Meeting, revoking a previously submitted proxy and voting in person.

The Proxy Committee, composed of three officers of the Corporation, H.D.
Edelman, T.L. Buzby and J.G. Oslick, will vote all shares of Voting Common Stock
represented by proxies signed and returned by stockholders. As authorized by the
proxies, the Proxy Committee will also vote the shares represented thereby on
any matters not known at the time this Proxy Statement was printed that may
properly be presented for action at the Meeting.

Any stockholder who gives a proxy may revoke it at any time before it is
voted by notifying the Corporate Secretary in writing on a date later than the
date of the proxy, by submitting a later dated proxy, or by voting in person at
the Meeting. Mere attendance at the Meeting, however, will not constitute
revocation of a proxy. Written notices revoking a proxy should be sent to Jerome
G. Oslick, Corporate Secretary, Federal Agricultural Mortgage Corporation, 1133
Twenty-First Street, N.W., Suite 600, Washington, D.C. 20036.

Proxy Statement Proposals

Each year, at the annual meeting, the Board of Directors submits to the
stockholders its nominees for election as Class A and Class B directors. In
addition, the Audit Committee's selection of independent auditors for the year
is submitted for stockholder ratification at each annual meeting, pursuant to
the Corporation's By-Laws. The Board of Directors may, in its discretion and
upon proper notice, also present other matters to the stockholders for action at
the annual meeting. In addition to those matters presented by the Board of
Directors, the stockholders may be asked to act at the annual meeting upon
proposals timely submitted by eligible holders of Class A Voting Common Stock
and Class B Voting Common Stock.

Proposals of stockholders to be presented at the 2003 Annual Meeting of
Stockholders were required to be received by the Corporate Secretary before
December 31, 2002 for inclusion in this Proxy Statement and the accompanying
proxy. Other than the election of ten members to the Board of Directors and the
ratification of the appointment of Deloitte & Touche LLP as independent auditors
for the Corporation for fiscal year 2003, the Board of Directors knows of no
other matters to be presented for action at the Meeting. If any other matters
are to be brought before the Meeting or any adjournment or postponement of the
Meeting, the Proxy Committee intends to vote proxies in accordance with its
members' best judgment.

If any stockholder intends to present a proposal for consideration at the
Corporation's 2004 Annual Meeting of Stockholders, the Corporate Secretary must
receive the proposal before December 20, 2003 to be eligible for inclusion in
the 2004 Proxy Statement. In addition, if any stockholder notifies the
Corporation after March 4, 2004 of an intent to present a proposal at the
Corporation's 2004 Annual Meeting of Stockholders, the Corporation's proxy
holders will have the right to exercise discretionary voting authority with
respect to that proposal, if presented at the meeting, without the Corporation
including information regarding the proposal in its proxy materials.

Board of Directors Meetings and Committees

The Board of Directors conducted a total of six regular meetings during the
fiscal year ended December 31, 2002. With the exception of Mr. C. A. Wheeler, a
member appointed by the President of the United States who was ill for much of
the year and who, on August 16, 2002, was replaced on the Board by another
member appointed by the President of the United States, each of the members of
the Board of Directors attended 75 percent or more of the aggregate number of
meetings of the Board of Directors and of the committees on which they served
during the 2002 fiscal year.

The Board has used a number of committees to assist it in the performance
of its duties. The committees currently consist of the following: Audit
Committee, Compensation Committee, Corporate Governance Committee, Executive
Committee, Finance Committee, Program Development Committee and Public Policy
Committee. Each director serves on at least one committee. See "Class A
Nominees," "Class B Nominees" and "Directors Appointed by the President of the
United States" for information regarding the committees on which directors
serve. The Executive Committee, which sets agendas for the meetings of the Board
of Directors and may exercise certain powers of the Board of Directors during
the intervals between meetings of the Board, met twelve times during the fiscal
year ended December 31, 2002. The Finance Committee, which is responsible for
determining the financial policies of the Corporation and managing the
Corporation's financial affairs, met ten times during the fiscal year ended
December 31, 2002. The Program Development Committee, which is responsible for
reviewing and approving all policy matters relating to changes to the
Corporations' Seller/Servicer Guide and making recommendations to the Board of
Directors on both new and existing programs, met nine times during the fiscal
year ended December 31, 2002. The Public Policy Committee, which considers
matters of public policy referred to it by the Board of Directors such as the
Corporation's relationship with and policies regarding borrowers, Congress and
governmental agencies and conflicts of interest, met eight times during the
fiscal year ended December 31, 2002. See "Item No. 1: Election of Directors,"
"Compensation of Directors and Executive Officers" and "Report of the Audit
Committee" and "Item No. 2: Selection of Independent Auditors" for information
concerning the Corporate Governance Committee, the Compensation Committee and
the Audit Committee, respectively.

Item No. 1: Election of Directors

At the Meeting, ten directors will be elected. The Act provides that five
of the directors will be elected by a plurality of the votes of the Class A
Holders, and five of the directors will be elected by a plurality of the votes
of the Class B Holders. All of the Class A Nominees and four of the Class B
Nominees currently are members of the Board of Directors. The directors elected
by the Class A Holders and the Class B Holders will hold office until the next
annual meeting of the stockholders of the Corporation, or until their respective
successors have been duly elected and qualified.

The Act further provides that the President of the United States will
appoint five members to the Board of Directors with the advice and consent of
the United States Senate (the "Appointed Members"). The Appointed Members serve
at the pleasure of the President of the United States. The Board of Directors,
after the election at the Meeting, will consist of the Appointed Members named
under "Directors Appointed by the President of the United States" below or such
other Appointed Members as may be appointed by the President and confirmed by
the Senate between April 11, 2003 and June 5, 2003 and the ten members who are
elected by the holders of Farmer Mac's Voting Common Stock. On March 11, 2003,
the President of the United States proposed for nomination Julia Bartling, of
South Dakota, and Glen Klippenstein, of Missouri, to be Appointed Members
replacing Mr. Branstool and Ms. Peters, respectively. On March 11, 2003, the
President also proposed for renomination Mr. Junkins to continue as an Appointed
Member.

In order to facilitate the selection of director nominees, the Board of
Directors utilizes a Corporate Governance Committee that consists of the members
of the Executive Committee, the Vice Chairman of the Board and one additional
member each from the Class A directors and Class B directors, resulting in a
committee composed of two directors from each of the Board's three constituent
groups. The members of the Corporate Governance Committee are: Appointed Members
Messrs. Dailey and Junkins; Class A directors Messrs. Johnson and Kruse; and
Class B directors Messrs. Graff and McCarthy. The Corporate Governance Committee
met three times during the fiscal year ended December 31, 2002. The Corporate
Governance Committee recommended five individuals to be considered for election
as Class A Nominees and five individuals to be considered for election as Class
B Nominees and the Board of Directors has approved these recommendations. The
individuals recommended by the Corporate Governance Committee are referred to
collectively as the "Nominees." The Nominees will stand for election to serve
for terms of one year each, or until their respective successors are duly
elected and qualified.

For the 2004 Annual Meeting of Stockholders, the Corporate Governance
Committee will consider nominees recommended by holders of Farmer Mac's Voting
Common Stock, who may submit recommendations by letter to the Corporate
Secretary of Farmer Mac.

If any of the ten Nominees named below is unable or unwilling to stand as a
candidate for the office of director on the date of the Meeting or at any
adjournment(s) or postponement(s) thereof, the proxies received on behalf of
such Nominee will be voted for such substitute or other Nominee(s) as the Board
of Directors may designate. The Board of Directors has no reason to believe that
any of the Nominees will be unable or unwilling to serve if elected.

Information about Nominees for Director

Each of the Nominees has been principally employed in his current position for
the past five years unless otherwise noted.

Class A Nominees

Dennis L. Brack, 50, has been a member of the Board of Directors of the
Corporation since June 7, 2001 and is a member of the Audit Committee and the
Program Development Committee. Mr. Brack has served as President and Chief
Executive Officer of Bath State Bank, Bath, Indiana, since 1988 and has been a
member of the Franklin County, Indiana, Community Foundation's Financial
Investment Committee since 1999 and serves on the Union County, Indiana,
Community Foundation board of directors. He has recently worked on the steering
committees for Comprehensive Plan Development in both Franklin and Union
Counties, Indiana. He was also a director of the Indiana Bankers Association
from 1994 to 1996 and served three years on the Dean's Advisory Committee for
Purdue University's School of Agriculture.

W. David Hemingway, 55, has been a member of the Board of Directors of the
Corporation since June 13, 1996 and is a member of the Finance Committee and the
Compensation Committee. Mr. Hemingway has been Executive Vice President and
Senior Investment Officer of the Investment Division of Zions First National
Bank, Salt Lake City, Utah, since 1984, having previously held various positions
within the investment division, which he assisted in organizing in 1975. In
early 1998, Mr. Hemingway was also elected Executive Vice President of Zions
Bancorporation, the holding company for Zions First National Bank. He is also a
director of Zions Investment Securities, Inc. Mr. Hemingway has held numerous
positions within the State of Utah, having served as a member of the Great Salt
Lake Development Authority and the Utah State Money Management Council, of which
he served as chairman in 1991. He also served as chairman of the Utah Bankers
Association in 1995.

Mitchell A. Johnson, 61, has been a member of the Board of Directors of the
Corporation since June 12, 1997, is a member of the Executive Committee and the
Corporate Governance Committee and serves as chairman of the Compensation
Committee. Mr. Johnson is President of MAJ Capital Management, Inc., an
investment management firm that he founded in 1994 following his retirement from
the Student Loan Marketing Association (Sallie Mae), the nation's largest
provider of college education financing. He is a trustee of Citizens Funds, a
mutual fund company based in Portsmouth, New Hampshire and a director of the
Rushmore Funds, a mutual fund company owned by FBR Investment Services, Inc.
During his 21 years with Sallie Mae, Mr. Johnson held numerous positions within
that organization including, for the seven years preceding his retirement,
Senior Vice President, Corporate Finance. He also served as a director of
Eldorado Bankshares, Inc., Laguna Hills, California, the holding company for
Eldorado and Antelope Valley Banks, and was the first President and one of the
founding members of the Washington Association of Money Managers and a trustee
of the District of Columbia Retirement Board, among other community activities.

Charles E. Kruse, 58, has been a member of the Board of Directors of the
Corporation since June 7, 2001 and is a member of the Program Development
Committee and the Corporate Governance Committee. Mr. Kruse has been a member of
the board of directors of Central Bancompany since 2000. He has served as
President of the Missouri Farm Bureau since 1992 and has been a member of the
American Farm Bureau board of directors, representing 12 midwestern State Farm
Bureaus, since 1995. Mr. Kruse has also served on the Commission on 21st Century
Production Agriculture; the Agricultural Technical Advisory Committee for Trade
in Grains, Feed, and Oilseeds; the President's Council on Rural America; and the
U.S. Trade Representative's Intergovernmental Advisory Committee.

Peter T. Paul, 59, has been a member of the Board of Directors of the
Corporation since June 4, 1998, is a member of the Corporate Governance
Committee and serves as chairman of the Finance Committee. He is the President
of Headlands Group, LLC, a private investment company, and is the owner and
Chairman of Grove Street Winery. From January 2000 to May 2001, Mr. Paul served
as President and Chief Executive Officer of GreenPoint Credit Corp., a national
specialty home finance lender. Prior to January 2000, he was the President and
Chief Executive Officer first of Headlands Mortgage Company, which Mr. Paul
founded in 1986, and subsequently of GreenPoint Mortgage after Headlands merged
with GreenPoint Financial Corp. in April 1999. Mr. Paul has been a member of the
board of directors of GreenPoint Financial Corp. since March 1999 and served as
Vice Chairman of that board from March 1999 to May 2001. He is also a member of
the board of directors of Sequoia National Bank and the University of New
Hampshire Foundation. Mr. Paul received the Ernst & Young 1999 Financial
Services Entrepreneur of the Year award.

Class B Nominees

Ralph W. "Buddy" Cortese, 56, is a farmer, rancher and cattle feeder from Fort
Sumner, New Mexico. Mr. Cortese has been a member of the board of directors of
the Farm Credit Bank of Texas since 1995. As a member of that board of
directors, he served as vice chairman from 1998 to 2000 and has served as
chairman since 2000. Previously, Mr. Cortese was the chairman of the board of
directors of the Production Credit Association of Eastern New Mexico (now Ag New
Mexico, ACA) from 1992 to 1994, a member of the PCA Stockholders' Advisory
Committee from 1990 to 1994 and a member of the executive committee of the Tenth
District Federation of PCAs from 1991 to 1994. He has also been a member of the
American Land Foundation Board since 2001.

Paul A. DeBriyn, 48, has been a member of the Board of Directors of the
Corporation since June 1, 2000, is a member of the Compensation Committee and
serves as chairman of the Audit Committee. Mr. DeBriyn has served as President
and Chief Executive Officer of Farm Credit Services of Southern Minnesota and
AgStar Financial Services, ACA since 1995. He was previously Executive Vice
President and Chief Operating Officer of Farm Credit Services of Southern
Minnesota from 1993 to 1995 and President and Chief Executive Officer of Farm
Credit Services of Southeast Minnesota from 1987 to 1993.

Kenneth E. Graff, 56, has been a member of the Board of Directors of the
Corporation since June 12, 1997, is a member of the Executive Committee and the
Corporate Governance Committee and serves as chairman of the Program Development
Committee. Mr. Graff is President of Farm Credit West, ACA located in Visalia,
California and was President of Central Coast Farm Credit (one of Farm Credit
West's predecessor Associations) since late 1987. He was employed by the Farm
Credit Banks of Sacramento in various capacities from 1976 to 1987, most
recently as Senior Vice President. From March 1989 until June 1991, Mr. Graff
served as a Class B member of the Farmer Mac Board of Directors.

John G. Nelson III, 53, has been a member of the Board of Directors of the
Corporation since June 13, 1996 and is a member of the Finance Committee. He is
the owner and manager of a grain farm in Reardan, Washington. Mr. Nelson has
served as a director of AgAmerica, FCB, Spokane, Washington from 1994 through
2002. He also has served as a director of Northwest Farm Credit Services, ACA,
and its predecessor PCA. Mr. Nelson is a member of the Farm Bureau, the
Washington Wheat Growers and Northwest Farm Credit Services, ACA, as well as
several other agricultural organizations.

John Dan Raines, 59, has been a member of the Board of Directors of the
Corporation since June 18, 1992 and is a member of the Audit Committee and the
program Development Committee. He is the owner and operator of Raines Commercial
Group, Inc., a general business corporation and Raines Investment Group, Inc.
From 1986 to 1990, Mr. Raines was a member of the board of directors of the
South Atlantic Production Credit Association, and served as its chairman in 1989
and 1990. Since 1990, Mr. Raines has served as a member of the board of
directors of AgFirst Farm Credit Bank (formerly, the Farm Credit Bank of
Columbia, South Carolina). He also has served since 1981 as a member of the
board of directors of AgGeorgia Farm Credit, ACA, and its predecessor Farm
Credit System institution.

Directors Appointed by the President of the United States

Charles Eugene Branstool, 66, has been a member of the Board of Directors of the
Corporation and served as its Chairman from May 26, 1995 to August 16, 2002. He
is a member of the Program Development Committee and the Public Policy
Committee. His appointment to the Board was confirmed by the United States
Senate on May 23, 1995. Mr. Branstool has been a self-employed farmer in Utica,
Ohio since 1962. During the period from April 1993 through December 1993, Mr.
Branstool served as the Assistant Secretary for Marketing and Inspection
Services of the U.S. Department of Agriculture (USDA). Prior to serving with
USDA, Mr. Branstool was State Chairman of the Ohio Democratic Party from January
1991 through April 1993. He also served in the Ohio House of Representatives
from January 1975 through December 1982, and as a State Senator from January
1983 through December 1990.

Fred L. Dailey, 57, has been a member of the Board of Directors of the
Corporation and has served as its Chairman since August 16, 2002. He also serves
as chairman of the Executive Committee and the Corporate Governance Committee
and is a member of the Compensation Committee and the Public Policy Committee.
His appointment to the Board was confirmed by the United States Senate on July
29, 2002. Mr. Dailey has served as the Director of the Ohio Department of
Agriculture since 1991. Prior to that time, he was the executive vice president
of the Ohio Beef Council and executive secretary of the Ohio Cattlemen's
Association from 1982 to 1991 and served as the Director of the Indiana Division
of Agriculture from 1975 to 1981. Mr. Dailey is past President of the National
Association of State Departments of Agriculture and has received the FFA
Honorary State Farmer degree from both Ohio and Indiana. In 1998, he received
the national "Outstanding State Agriculture Executive" award presented by the
Biotechnology Industry Organization and was named "Man of the Year" by
Progressive Farmer magazine in 1999. Mr. Dailey resides on a working farm in
Ohio where he raises Angus cattle.

Grace T. Daniel, 57, has been a member of the Board of Directors of the
Corporation since August 17, 2002 and is a member of the Finance Committee and
the Public Policy Committee. Her appointment to the Board was confirmed by the
United States Senate on July 29, 2002. Ms. Daniel is the Principal of Golden
State Marketing Services, a consulting firm that she founded in 1987 and that
provides marketing services for corporations and government agencies. Ms. Daniel
served on the California Agricultural Labor Relations Board from 1997 to 1999.
She also served as the California Governor's Chief Deputy Appointments Secretary
from 1994 to 1997 and as Executive Director at the California Trade and Commerce
Agency Office of Small Business from 1991 to 1994, where she was responsible for
the State's loan guarantee program.

Lowell L. Junkins, 59, has been a member of the Board of Directors of the
Corporation since June 13, 1996 and Vice Chairman of the Board since December 5,
2002. He is a member of the Audit Committee and the Corporate Governance
Committee and serves as Chairman of the Public Policy Committee. He was
appointed to the Board of Directors by President Clinton in April 1996 while the
Senate was in recess and was confirmed by the Senate on May 23, 1997. Mr.
Junkins works as a public affairs consultant for Lowell Junkins & Associates in
Des Moines, Iowa. He owns and operates Hillcrest Farms in Montrose, Iowa, where
he served as Mayor from 1971 to 1972. From 1974 through 1986, Mr. Junkins served
as an Iowa State Senator, including as majority leader from 1981 to 1986.

Marilyn Peters, 73, has been a member of the Board of Directors of the
Corporation since October 12, 1994 and is a member of the Program Development
Committee and the Public Policy Committee. Her appointment to the Board was
confirmed by the United States Senate on October 4, 1994. Mrs. Peters and her
husband own farm and ranch land in Marshall County, South Dakota used for the
production of grain crops and cattle. Mrs. Peters is a former teacher and a past
member of the Britton Public School Board. She served on the South Dakota
Council on Vocational Education, the South Dakota Private Industry Council and
the South Dakota Professional Administrators Practices and Standards Commission,
positions to which she was appointed by the Governor of South Dakota. She also
served as a member of the National Association of State Councils on Vocational
Education, representing the interest of the agricultural community in the work
of the association. In 1999, Mrs. Peters completed two terms of service on the
board of directors of South Dakota Rural Enterprise, Inc., a statewide private
not-for-profit corporation serving as a financial intermediary for rural
economic development.

In addition to the affiliations set forth above, the Nominees and Appointed
Members are active in many local and national trade, commodity, charitable,
educational and religious organizations.

Stock Ownership of Directors and Executive Officers

As of the record date, April 11, 2003, the following members of the Board
of Directors, Nominees for election as directors and executive officers of the
Corporation might be deemed to be "beneficial owners" of equity securities of
the Corporation, as defined by the rules of the Securities and Exchange
Commission ("SEC"). The Corporation's Voting Common Stock may be held only by
banks, insurance companies and financial institutions and Farm Credit System
institutions, and may not be held by individuals. Accordingly, no executive
officer owns, directly or indirectly, any shares of any class of the
Corporation's Voting Common Stock. Furthermore, Appointed Members may not be
officers or directors of financial institutions or Farm Credit System
institutions and may not, directly or indirectly, own Voting Common Stock of the
Corporation. There are no ownership restrictions on the Class C Non-Voting
Common Stock. For information about the beneficial owners of 5 percent or more
of the Voting Common Stock of the Corporation, see "Principal Holders of Voting
Common Stock."

Voting Common Stock Non-Voting Common Stock(1)
--------------------- --------------------------
Percentage Percentage
Class A of Class Class C of Class

Dennis L. Brack ------ ------ 9,055 *
Charles Eugene Branstool ------ ------ 17,492 *
Timothy L. Buzby ------ ------ 19,878 *
Nancy E. Corsiglia ------ ------ 290,776 2.9%
Paul A. DeBriyn ------ ------ 8,582 *
Henry D. Edelman ------ ------ 666,007 6.6%
Kenneth E. Graff ------ ------ 28,334 *
W. David Hemingway(2) 322,100 31.3% 1,537,413 15.2%
Mitchell A. Johnson ------ ------ 38,746 *
Lowell L. Junkins ------ ------ 8,333 *
Charles E. Kruse ------ ------ 9,065 *
James A. McCarthy(3) ------ ------ 26,050 *
John G. Nelson III ------ ------ 27,145 *
Jerome G. Oslick ------ ------ 66,056 *
Peter T. Paul ------ ------ 46,792 *
Marilyn Peters ------ ------ 26,807 *
John Dan Raines ------ ------ 25,334 *
Tom D. Stenson ------ ------ 156,795 1.6%
All directors and
executive officers 322,100 31.3% 3,008,660 29.8%
as a group (20 persons)

* Less than 1%.
1 Includes shares of Class C Non-Voting Common Stock that may be acquired
within 60 days through the exercise of stock options as follows: Mr.
Edelman, 612,674 shares; Mr. Buzby, 16,943 shares; Ms. Corsiglia, 264,123
shares; Mr. Oslick, 59,561 shares; and Mr. Stenson, 141,132 shares; each of
Ms. Peters and Messrs. Johnson, McCarthy, Paul, and Raines, 25,334 shares;
Mr. Hemingway, 31,334 shares; Mr. Graff, 28,334 shares; Mr. Nelson, 26,834
shares; Mr. Branstool, 16,334 shares; Mr. DeBriyn, 8,258 shares; each of
Messrs. Brack and Kruse, 8,334 shares; Mr. Junkins, 8,333 shares; and all
directors and executive officers as a group, 1,357,198 shares.
2 As Senior Investment Officer of Zions First National Bank, Mr. Hemingway
may be deemed to be the beneficial owner of the 322,100 shares of Class A
Voting Common Stock owned by Zions First National Bank. As Executive Vice
President of Zions Bancorporation, the holding company for Zions First
National Bank, Mr. Hemingway may be deemed to be the beneficial owner of
the 1,500,300 shares of Class C Non-Voting Common Stock owned by the
holding company. Mr. Hemingway disclaims beneficial ownership of the
322,100 shares of Class A Stock and the 1,500,300 shares of Class C Stock
owned by the Bank and the holding company, respectively. Of the 37,113
shares of Class C Non-Voting Common Stock attributed to Mr. Hemingway, 240
shares are owned by his son.
3 Not a nominee for re-election.

Report of the Audit Committee

The following report of the Audit Committee shall not be deemed to be
"soliciting material," or to be "filed" with the SEC, and will not be deemed to
be incorporated by reference into any filing by the Corporation under the
Securities Act of 1933 or the Securities Exchange Act of 1934, except to the
extent that the Corporation specifically requests that such information be
treated as soliciting material or specifically incorporates this Report by
reference into a document.

During 2002, the Audit Committee of the Board of Directors reaffirmed the
charter for the Audit Committee, which reaffirmation was ratified by the full
Board on June 6, 2002. The complete text of the charter, which reflects
standards set forth in new SEC regulations and New York Stock Exchange rules,
was included in Appendix A to Farmer Mac's proxy statement that was filed with
the SEC April 19, 2002. The Board reviews and approves changes to the Audit
Committee Charter annually.

As set forth in more detail in the charter, the Audit Committee's primary
responsibilities fall into three broad categories:

o first, the committee is charged with monitoring the preparation of
quarterly and annual financial reports by the Corporation's
management, including discussions with management and the
Corporation's outside auditors about draft annual financial statements
and key accounting and reporting matters;

o second, the committee is responsible for matters concerning the
relationship between the Corporation and its outside auditors,
including recommending their appointment or removal, reviewing the
scope of their audit services and related fees, as well as any other
services being provided to the Corporation, and determining whether
the outside auditors are independent (based in part on the annual
letter provided to the Corporation pursuant to Independence Standards
Board Standard No. 1); and

o third, the committee oversees management's implementation of effective
systems of internal controls, including review of policies relating to
legal and regulatory compliance, ethics and conflicts of interests,
and review of the activities and recommendations of the Corporation's
internal auditing program.

The Audit Committee has implemented procedures to ensure that during the
course of each fiscal year it devotes the attention that it deems necessary or
appropriate to each of the matters assigned to it under the Committee's charter.
To carry out its responsibilities, the Audit Committee met thirteen times during
2002.

The Directors who serve on the Audit Committee are all "independent" for
purposes of the New York Stock Exchange listing standards. That is, the Board of
Directors has determined that none of the Audit Committee members has a
relationship with Farmer Mac that may interfere with their independence from
Farmer Mac and its management.

In overseeing the preparation of the Corporation's financial statements,
the Audit Committee met with both management and the Corporation's outside
auditors to review and discuss all financial statements prior to their issuance
and to discuss significant accounting issues. Management advised the Audit
Committee that all financial statements were prepared in accordance with
generally accepted accounting principles, and the Audit Committee discussed the
statements with both management and the outside auditors. The Audit Committee's
review included discussion with the outside auditors of matters required to be
discussed pursuant to Statement on Auditing Standards No. 61 (Communication With
Audit Committees).

With respect to the Corporation's outside auditors, the Audit Committee,
among other things, received from Deloitte & Touche LLP the written disclosures
as required by the Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees) and discussed with them their independence
from the Corporation and its management.

Finally, the Audit Committee continued to monitor the scope and adequacy of
the Corporation's internal auditing program, including proposals for adequate
staffing and to strengthen internal procedures and controls where appropriate.

On the basis of these reviews and discussions, the Audit Committee
recommended to the Board of Directors that the Board approve the inclusion of
the Corporation's audited financial statements in the Corporation's Annual
Report on Form 10-K for the fiscal year ended December 31, 2002 for filing with
the Securities and Exchange Commission, as filed on March 27, 2003.

Audit Committee

Paul A. DeBriyn, Chairman
Dennis L. Brack
Lowell Junkins
John Dan Raines

Executive Officers

The following table sets forth the names and ages of the current executive
officers of Farmer Mac and the principal positions held with the Corporation by
such executive officers.

Name Age Capacity in which Served and Five-Year History

Henry D. Edelman 54 President and Chief Executive Officer of the Corporation
since June 1, 1989. From November 1986 until he joined
Farmer Mac, Mr. Edelman was First Vice President for Federal
Government Finance of PaineWebber Incorporated, New York, New
York. Previously, Mr. Edelman was Vice President for
Government Finance at Citibank N.A., New York, New York and
Director of Financing, Investments and Capital Planning at
General Motors Corporation in New York, New York, where he
served in various capacities on the Legal Staff and Financial
Staff for ten years.

Nancy E. Corsiglia 47 Vice President - Finance since June 1, 2000, Treasurer since
December 8, 1989 and Chief Financial Officer since
May 13, 1993. From December 8, 1989 until June 1, 2000 when
she was appointed Vice President - Finance, Ms. Corsiglia was
Vice President - Business Development. From 1988 until she
joined Farmer Mac, Ms. Corsiglia was Vice President for
Federal Government Finance at PaineWebber Incorporated, New
York, New York. From 1984 to 1988, she served as a Senior
Financial Analyst and a Manager on the Financial Staff of
General Motors Corporation, New York, New York.

Jerome G. Oslick 56 Vice President - General Counsel and Corporate Secretary
since February 1, 2000. From 1987 until he joined Farmer Mac
as Assistant General Counsel in February 1994, Mr. Oslick was
an associate in the Washington, D.C. office of the New
York-based law firm of Brown & Wood. From 1970 to 1987, he
was an attorney and branch chief in the Office of General
Counsel, United States Department of Agriculture.

Tom D. Stenson 52 Vice President - Agricultural Finance of the Corporation
since August 7, 1997. From November 1996 until August 7,
1997, Mr. Stenson was Director - Agricultural Finance of the
Corporation. From 1993 until joining Farmer Mac in 1996, he
was Vice President - Agribusiness for ValliWide Bank, a
"super-community" bank in the San Joaquin Valley of
California.

Compensation of Directors and Executive Officers

The Compensation Committee determines, subject to ratification by the Board
of Directors, the salaries, benefit plans and other compensation of directors
and officers of the Corporation. The current members of the Compensation
Committee are Messrs. Dailey, DeBriyn, Hemingway, Johnson (chairman) and
McCarthy (not a nominee for re-election). No member of Farmer Mac's Compensation
Committee is or has been an officer or employee of the Corporation. During the
fiscal year ended December 31, 2002, the Compensation Committee met seven times.

-- Compensation of Directors

The directors are required to spend a considerable amount of time preparing
for, as well as participating in, Board and Committee meetings. In addition,
they are often called upon for their counsel between meeting dates. For those
services, they receive the following compensation: (a) each member of the Board
of Directors receives an annual retainer of $12,500, except the Chairman who
receives a $17,500 annual retainer; (b) each member receives $500 per day, plus
expenses, for each meeting of the Board and each Committee meeting (if on a day
other than that of the Board meeting) attended; and (c) with the prior approval
of the President, members of the Board are compensated at the same daily rate
for certain other meetings and conferences of borrowers, lenders or other groups
interested in the Farmer Mac program in which they participate. The total cash
compensation received by all members of the Board of Directors in 2002 was
approximately $247,000. Since June 1, 2000, each director has been granted
options annually to purchase 5,000 shares of Class C Non-Voting Common Stock,
with each such grant occurring on the date of each Annual Meeting of
Stockholders and with the option price to be determined as of such date. The
options granted to each member of the Board of Directors in 2002 had a present
value of $67,800(4) at the grant date. The total compensation, cash and options
received by all members of the Board of Directors in 2002 was approximately
$1,264,000.

______________________________________
4 The present value at grant date of options granted during 2002 has been
estimated using the Black-Scholes option pricing model with the following
assumptions: a dividend yield of 0.0%; an expected volatility of 40.0%; a
risk-free interest rate of 5.2%; and an expected life of 5 years.

-- Compensation of Executive Officers

General

This section includes: (a) a report from the Compensation Committee of the
Board of Directors on executive compensation; (b) a discussion of compensation
committee interlocks and insider participation in Farmer Mac transactions; (c) a
summary description in tabular form of executive compensation; (d) a summary of
aggregate option holdings; (e) a description of the executive officers'
employment agreements; (f) a discussion of certain relationships and related
transactions with directors; and (g) comparisons of Farmer Mac's stock
performance to market indices.

Notwithstanding anything to the contrary set forth in any of Farmer Mac's
documents with respect to the offer or sale of securities ("Offering Circular")
or any previous corporate filings under the Securities Act of 1933 or Securities
Exchange Act of 1934, neither the Compensation Committee Report on Executive
Compensation nor the performance graphs shall be deemed to be incorporated by
reference into any Offering Circular or any filing under the Securities Act of
1933 or the Securities Exchange Act of 1934, except to the extent Farmer Mac
specifically incorporates such information by reference, and shall not otherwise
be deemed to have been or to be filed under such Acts.

Compensation Committee Report on Executive Compensation

Farmer Mac's Compensation Policies. Farmer Mac was created by Congress to
establish a secondary market for agricultural and rural housing mortgages that
would increase the availability of credit for agricultural producers, provide
greater liquidity and lending capacity for agricultural lenders and facilitate
intermediate- and long-term agricultural funding. Farmer Mac's charter,
particularly as revised in 1996, casts it in the mold of the Federal National
Mortgage Association ("Fannie Mae") and the Federal Home Loan Mortgage
Corporation ("Freddie Mac"), which, over the past 20 years, have established a
mature secondary market for housing mortgages. From the outset, Farmer Mac's
Board of Directors and its Compensation Committee recognized that the
accomplishment of Farmer Mac's mission would require that it attract, retain and
motivate highly qualified personnel capable of addressing the formidable tasks
necessary to develop and operate a secondary market where none had previously
existed, and to persevere in their efforts through what would likely be a number
of difficult and uncertain years. The Board and the Compensation Committee
believe that approach continues to be sound, inasmuch as the Corporation must
compete in the general market for the services of individuals with the
education, experience and prior achievements necessary to enhance the financial
results and safety and soundness of Farmer Mac's expanding and increasingly
complex operations. Accordingly, the Board and the Compensation Committee have
undertaken to compensate those employees in a reasonable manner consistent with
compensation for executives in other comparable businesses that involve similar
duties and responsibilities, while recognizing that the Corporation would have
to set special objectives as it progressed through developmental stages, whereby
management would focus on long-term structural, pricing and capital objectives,
balanced with near-term operating results.

Method of Determining Management Compensation. Farmer Mac's Board of
Directors and Compensation Committee have adopted an approach to executive
compensation that relies upon both subjective (qualitative) and objective
(quantitative) evaluation criteria in establishing the compensation of the Chief
Executive Officer ("CEO") and other senior members of management. That approach
measures performance primarily on the basis of management's accomplishments in
implementing business strategies designed to achieve the annual and long-term
objectives defined in the Corporation's annual business plan, as approved each
year by the Board of Directors.

As part of its ongoing efforts to evaluate its approach and further refine
the Corporation's compensation practices, the Compensation Committee has
employed the services of a nationally recognized independent compensation
consulting firm. With significant input and assistance from its independent
consultant, the Committee has worked to refine the Corporation's policies
relating to executive compensation. Those policies include: (i) a system for
comparative and competitive evaluation of base salaries; (ii) an approach to
incentive compensation, including annual cash and long-term non-cash components;
and (iii) a management performance evaluation form that has resulted in more
quantitative measurement of management's performance against the achievement of
business plan objectives.

Each year, the Corporation's independent compensation consultant reviews
the Corporation's compensation practices and establishes an estimated range of
competitive compensation opportunities comparable to those received by persons
with similar qualifications and experience (but not necessarily the same
position and title) at other corporations, particularly the other
government-sponsored enterprises, to ensure that the Corporation's compensation
structure is sufficiently competitive to attract and retain highly qualified
executives. The Corporation's established practice is to target the 75th
percentile of compensation for all components of comparable pay, to reflect the
challenges and risks of its developmental and political characteristics.

On the basis of that comparative review and other related analyses, the
Compensation Committee selects the range of, and target amounts for, total
compensation as well as for each of the three components of compensation -
salary, annual cash incentive pay and long-term non-cash incentive pay - and
then makes recommendations to the Board of Directors as to the actual levels of
compensation to be awarded. The incentive portions of the compensation package
vary to reflect corporate performance, which is measured against business plan
objectives and results. In measuring the achievement of those objectives and
results, the Compensation Committee applies criteria established by the Board
and management in the business plan. For the 2001-02 12-month business plan
cycle, or business planning year, from June 1, 2001 to May 31, 2002, four
critical objectives were established, focusing on profitability, volume and
quality control: to continue to improve operating results; to optimize internal
operations with the evolution of the Corporation's business; to optimize use of
the capital markets; and to re-establish and maintain effective government,
public and investor relations.

Method of Determining Management Compensation for the 2001-02 Business
Planning Year. The Corporation's procedures for determining management
compensation have been consistent from year to year. In April and May of each
year, towards the end of the Corporation's business planning year, the
Compensation Committee reviews management's performance against business plan
objectives, taking into account the business conditions that prevailed during
the preceding business planning year.

The CEO provides detailed written performance evaluations of the members of
senior management, other than himself, to the Compensation Committee members in
advance, and these are discussed among the members in executive session. The CEO
participates in the evaluation of each other senior member of management, but
not in his own. As a benchmark for compensation decisions, the Compensation
Committee, assisted by the independent compensation consultant, compares the
salary and annual and long-term incentive compensation of the CEO and other
members of senior management with the corresponding range of competitive
compensation received by persons with similar qualifications and experience
(although not necessarily the same position and title) at other corporations,
particularly the other government-sponsored enterprises. This comparison is made
on both an annual and a multi-year basis, in order to take into account pay
levels and rates of increase at Farmer Mac and similar companies.

The Compensation Committee considers the performance and total compensation
of the CEO in an executive session without the CEO present, prepares a detailed
written performance evaluation of the CEO and then includes the CEO in its
consideration of the performance and total compensation of each of the other
members of senior management. Based on those deliberations and input provided by
the independent compensation consultant, the Compensation Committee makes
recommendations consistent with the Corporation's compensation policies as to
the terms of the contracts under which the CEO and other senior management are
employed, and its ability to attract and retain a management team with the
skills and talent necessary to achieve the Corporation's mission.

The Compensation Committee evaluated the performance of senior management,
including the CEO, for the 2001-02 business planning year by reviewing the
contribution of each individual to the accomplishment of the strategies and
objectives under the 2001-02 business plan. The Compensation Committee also
evaluated the Corporation's non-financial achievements during the business
planning year, recognizing that a significant aspect of the continuing
development of Farmer Mac involved the establishment of programs and products
that facilitate participation by sellers and provide effective access to the
secondary market for stockholders who are originators or purchasers of qualified
loans. In that regard, the Compensation Committee considered the significant
business accomplishments and financial results achieved during the 2001-02
business planning year, including the 56 percent increase in fiscal year net
income for 2001 compared to 2000. The Compensation Committee also recognized
other important business accomplishments during the planning year, including:
expanding the number and diversity of participants in Farmer Mac's cash window
program for the purchase of agricultural mortgages; increasing the profitability
of its programs by holding loans rather than securitizing them when market
conditions were unfavorable; limiting expenses through cost control measures;
and maximizing revenue through sophisticated investment techniques. All of these
factors were weighed carefully, with particular weight accorded to
profitability. On that basis, the Compensation Committee recommended, and the
Board approved, the compensation to senior management disclosed herein.

The proportion of the total compensation package representing incentive
compensation (annual cash and long-term non cash incentive compensation) for the
2001-02 business planning year was 76 percent for the CEO and ranged between 56
percent and 67 percent for other members of senior management. In accordance
with the recommendation of the Compensation Committee and with the concurrence
of the independent compensation consultant for the 2001-02 business planning
year, annual incentive compensation awards otherwise payable in cash to members
of senior management were instead paid in an equal combination of restricted
stock and stock options; accordingly, long-term incentive compensation
represented 100 percent of the total incentive compensation package for the
2001-02 business planning year. The basis for determining incentive compensation
was the Compensation Committee's evaluation of each individual's contribution to
the achievement of the business and financial accomplishments of the 2001-02
planning year, as well as an evaluation of each individual's performance, based
on subjective standards including professional competence, motivation and
effectiveness in implementing the strategies that led to the achievement of
Farmer Mac's business plan objectives.

Basis for Determining the Compensation for the CEO. For the 2001-02
business planning year, Mr. Edelman received a base salary of $434,884 and was
awarded incentive compensation with a total estimated value of approximately
$1,494,978. With respect to the incentive compensation component of Mr.
Edelman's total compensation, he received options to purchase 84,866 shares of
Farmer Mac Class C Non-Voting Common Stock (one-third of the options, valued at
$1,150,783 as of the grant date, vested immediately upon grant; one-third will
vest on May 31, 2003; and the remaining one-third will vest on May 31, 2004) and
11,828 shares of restricted stock, which are not transferable until May 31,
2003. For a discussion of the factors and criteria upon which the CEO's
compensation was based, see the preceding section of this report.

The Compensation Committee members believe that both the design of Farmer
Mac's compensation structure, as maintained with the assistance of its outside
independent compensation consultant, and the actual total compensation levels,
as described herein, reflect careful consideration of what was reasonable and
fair, in light of the Corporation's performance, from both management and
stockholder perspectives.

Compensation Committee

Mitchell A. Johnson, Chairman
Fred L. Dailey Paul A DeBriyn
W. David Hemingway James A. McCarthy

Compensation Committee Interlocks and Insider Participation

Directors Dailey, DeBriyn, Hemingway, Johnson and McCarthy comprise the
Corporation's Compensation Committee. None of these directors is or has been an
officer or employee of the Corporation.

Director Hemingway, a Class A director, is Executive Vice President and
Senior Investment Officer of the Investment Division of Zions First National
Bank ("Zions"), the owner of 322,100 shares (or 31.3 percent) of Farmer Mac's
Class A Voting Common Stock. He also is Executive Vice President of Zions
Bancorporation, the holding company for Zions, which owns 1,500,300 shares (or
14.8 percent) of Farmer Mac's Class C Non-Voting Common Stock. Zions is an
active participant in both the Farmer Mac I and II programs. The following
transactions occurred between Zions or its affiliates and Farmer Mac during
2002:

o Farmer Mac purchased 183 loans having an aggregate principal amount of
approximately $77.2 million from Zions under the Farmer Mac I program,
representing approximately 4.1 percent of that program's volume for
the year;
o Farmer Mac purchased 16 guaranteed portions of USDA-guaranteed loans
having an aggregate principal amount of approximately $3.6 million
from Zions under the Farmer Mac II program, representing approximately
2.1 percent of that program's volume for the year;
o Farmer Mac sold approximately $47.7 million of Farmer Mac Guaranteed
Securities to Zions;
o Farmer Mac and Zions entered into interest rate swap transactions
having an aggregate notional principal amount of approximately $41.6
million (the aggregate outstanding notional principal amount of all
interest rate swap transactions between Farmer Mac and Zions was
$326.8 million as of December 31, 2002);
o Farmer Mac received approximately $1.0 million in guarantee fees on
Farmer Mac Guaranteed Securities whose underlying loans were swapped
or sold to Farmer Mac by Zions;
o Farmer Mac paid Zions approximately $51,000 in underwriting and loan
file review fees;
o Zions received approximately $1.2 million in servicing fees for acting
as a central servicer in the Farmer Mac I program;
o Zions received approximately $43,000 in fees for acting as agent with
respect to approximately $28.3 million of Farmer Mac medium-term
notes; and
o Zions received approximately $89,000 in commissions for acting as
dealer with respect to approximately $738.7 million of Farmer Mac
discount notes;

Accordingly, Director Hemingway participated in the deliberations of the
Compensation Committee but did not vote upon management compensation decisions.

Summary Compensation Table

The following table sets forth certain information for each of the last
three fiscal years with respect to the compensation awarded to, earned by, or
paid to Farmer Mac's CEO and each of Farmer Mac's four other most highly
compensated executive officers or employees for the fiscal year ended December
31, 2002.

Long-Term
Compensation Awards
--------------------
Restricted Securities
Fiscal Annual Compensation($) Stock Underlying All Other
Name and Principal Position Year Salary Bonus(5) Awards($)(6) Options Compensation ($)(7)
------------------------- ------- --------- ----------- --------- ---------- ---------------

Henry D. Edelman 2002 447,480 344,195 -- 84,866 36,211
President and 2001 426,256 335,924 -- 90,387 29,706
Chief Executive Officer 2000 406,903 302,545 -- 148,388 35,980

Timothy L. Buzby(8) 2002 135,029 61,401 -- 13,975 20,885
Controller 2001 126,021 25,592 -- 4,627 19,468
2000 7,962 -- -- 3,000 --

Nancy E. Corsiglia 2002 287,081 143,958 -- 35,769 33,671
Vice President,Finance, 2001 263,820 155,450 -- 40,220 28,539
Treasurer and CFO 2000 229,409 117,718 -- 61,907 31,125

Jerome G. Oslick(9) 2002 232,521 87,387 -- 18,410 35,926
Vice President, 2001 201,875 102,843 -- 22,483 30,614
General Counsel and 2000 160,389 -- 107,744 33,554 31,051
Secretary

Tom D. Stenson 2002 234,992 113,490 -- 25,901 34,226
Vice President, 2001 217,528 109,527 -- 26,951 29,131
Agricultural Finance 2000 213,708 101,973 -- 47,632 31,260

5 All bonuses paid to Mr. Edelman, Mr. Buzby, Ms. Corsiglia, Mr. Oslick and
Mr. Stenson in 2002 were in the form of shares of Farmer Mac Class C
Non-Voting Stock that may not be transferred until May 31, 2003. The shares
were granted on June 6, 2002 and valued at the closing price ($29.10) of
Class C Non-Voting Common Stock on the date of grant. The numbers of shares
granted were: Mr. Edelman, 11,828; Mr. Buzby, 2,110; Ms. Corsiglia, 4,947
Mr. Oslick, 3,003; and Mr. Stenson, 3,900.
6 Mr. Oslick was granted 2,615 shares of restricted stock on February 3, 2000
(valued at the closing price ($19.125) of Class C Non-Voting Common Stock
on the date of grant) and 3,817 shares of restricted stock on June 1, 2000
(valued at the closing price ($15.125) of Class C Non-Voting Common Stock
on the date of grant), all of which vested on May 31, 2001 (on which date
the closing price was $32.25). To date, Farmer Mac has not paid any
dividends on its common stock, which includes restricted stock, nor does it
expect to pay dividends in the foreseeable future.
7 Includes contributions to the Corporation's defined contribution pension
plan in the amount of $32,961 for 2002 on behalf of each of Mr. Edelman,
Ms. Corsiglia, Mr. Oslick and Mr. Stenson and $20,671 on behalf of Mr.
Buzby, as well as disability and life insurance premium payments paid on
behalf of the officers. See "Employment Agreements."
8 Mr. Buzby was appointed Controller on December 4, 2000.
9 Mr. Oslick was appointed Vice President, General Counsel and Secretary on
February 1, 2000.

Option Grants During 2002

The table below sets forth, as to each of the named executive officers, the
following information with respect to option grants during 2002 and the
potential realizable value of those option grants: (1) the number of shares of
Class C Non-Voting Common Stock underlying options granted during 2002; (2) the
percentage that such options represent of all options granted to employees
during that year; (3) the exercise price; (4) the expiration date; and (5) the
present value, as of the grant date, of the options under the Black-Scholes
option pricing model.

% of Total
Options
Number of Granted to Grant Date
Options Employees Exercise Price Expiration Present
Name Granted(10) in Year ($/Share) Date Value(11)
--------------------------------------------------------------------------------------

Henry D. Edelman 84,866 43.4 29.10 6/6/12 $1,150,783
Timothy L. Buzby 13,975 7.2 29.10 6/6/12 189,501
Nancy E. Corsiglia 35,769 18.3 29.10 6/6/12 485,028
Jerome G. Oslick 18,410 9.4 29.10 6/6/12 249,640
Tom D. Stenson 25,901 13.3 29.10 6/6/12 351,218

10 Options granted in 2002 became exercisable in stages, with one-third having
vested on June 6, 2002, and one-third vesting on each of May 31, 2003 and
May 31, 2004.
11 The present value at grant date of options granted during 2002 has been
estimated on the date of the grant using the Black-Scholes option pricing
model with the following assumptions: a dividend yield of 0.0%; an expected
volatility of 40.0%; a risk-free interest rate of 5.2%; and an expected
life of 5 years.

Option Exercises and Year End Value

The following table sets forth certain information relating to stock
options exercised during 2002 by, and the number and value of unexercised stock
options previously granted to, the individuals named in the Summary Compensation
Table.

Number of Securities
Underlying Value of Unexercised
Unexercised Options In-the-Money Options
at Year-End at Year-End(12)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized Unexercisable Unexercisable
-------------------------------------------------------------------------------------

Henry D. Edelman -- -- 610,834 / 86,706 $9,511,068 / $87,128
Timothy L. Buzby -- -- 10,742 / 10,860 60,468 / 14,348
Nancy E. Corsiglia -- -- 238,794 / 37,262 3,793,374 / 36,723
Jerome G. Oslick -- -- 45,929 / 19,768 373,835 / 18,900
Tom D. Stenson -- -- 123,515 / 26,250 1,226,567 / 26,591

12 For purposes of this calculation, the value of the unexercised options is
determined by multiplying the number of options by the difference between
the exercise price and the closing price ($30.64) for the Class C
Non-Voting Common Stock on December 31, 2002.

Equity Compensation Plans

The following table sets forth certain information relating to
compensation plans under which equity securities are authorized issuance as of
December 31, 2002.

Number of securities
Number of securities remaining available
to be issued upon Weighted average for future issuance
exercise of exercise price of under equity
Plan category outstanding options outstanding options compensation plans
----------------------------------------------------------------------------------------

Equity compensation
plans not approved
by shareholders 1,637,111 $19.45 1,939,413

General. The purpose of Farmer Mac's stock option plans is to encourage
stock ownership by directors, officers and other key employees, to provide an
incentive for such individuals to expand and improve the business of Farmer Mac
and to assist Farmer Mac in attracting and retaining key personnel. The use of
stock options is an attempt to align more closely the long-term interests of
employees with those of Farmer Mac's stockholders by providing those individuals
with the opportunity to acquire an equity interest in Farmer Mac. Farmer Mac's
stock option plans are administered by the Compensation Committee of the Board.
Because individuals are prohibited by law from owning shares of Farmer Mac's
Voting Common Stock, the Corporation uses unrestricted Class C Non-Voting Common
Stock for the purpose of granting options under its stock option plans. Under
the plans, the option price is required to be paid in cash, and no participant
has any rights as a stockholder with respect to shares subject to an option
until the option price has been paid and the shares are issued to the
participant.

1992 Plan. In 1992, the Board adopted a Stock Option Plan (the "1992 Plan")
for key management employees. The 1992 Plan provided for the issuance of
nonqualified stock options on Class C Non-Voting Common Stock at an original
option price of $5 per share (split-adjusted), subject to adjustment pursuant to
the plan's anti-dilution provision, with a term of 10 years from the date of
grant. The 1992 Plan was amended in 1993 to increase the maximum number of
shares of Class C Non-Voting Common Stock that may be optioned and sold to
345,000 (split-adjusted). Options covering 315,000 (split-adjusted) shares were
granted under the 1992 Plan, of which 90,000 remain outstanding. These options
are fully vested, have an adjusted option price of $2.1867 per share
(split-adjusted), subject to further adjustment pursuant to the plan's
anti-dilution provision, and will expire June 18, 2003, if not exercised before
that date.

If a participant leaves Farmer Mac for any reason, including by reason of
retirement, all of that participant's rights to exercise any option under the
1992 Plan terminate on the earlier of the option expiration date or 30 days
after termination of employment, unless termination was for "cause," in which
case the options expire immediately.

1996 Plan. In 1996, the Board adopted a second Stock Option Plan (the "1996
Plan") for key management employees. The 1996 Plan provided for the issuance of
nonqualified stock options on Class C Non-Voting Common Stock at an option price
of $2.625 per share (split-adjusted), subject to adjustment pursuant to the
plan's anti-dilution provision, with a term of 10 years from the date of grant.
The 1996 Plan specified that the maximum number of shares of Class C Non-Voting
Common Stock that may be optioned and sold was 338,490 (split-adjusted). Options
covering all 338,490 shares were granted, of which 165,087 remain outstanding,
and are fully vested.

If a participant leaves Farmer Mac for any reason, including by reason of
retirement, all of that participant's rights to exercise any option under the
1996 Plan terminate on the earlier of the option expiration date or 30 days
after termination of employment, unless termination was for "cause," in which
case the options expire immediately.

1997 Plan. In 1997, the Board adopted the 1997 Incentive Plan (the "1997
Plan"), which is a broad-based option plan for directors, officers and
non-officer employees. The 1997 Plan, as amended, provides for the issuance of a
maximum of 3,750,000 nonqualified stock options on Class C Non-Voting Common
Stock at an option price determined as of the grant date, with a term of 10
years from such date. The plan provides for the automatic annual grant to
directors of 10-year options to purchase 6,000 (split-adjusted) shares of Class
C Non-Voting Common Stock, with each grant to occur on the day of the annual
meeting (including the Meeting), with the option price to be determined as of
such day. Options granted under the 1997 Plan vest one-third on the date of
grant, one-third the following year and one-third the second following year. In
1998, the 1997 Plan was amended to reduce the term of director options to five
years while extending the period for exercising options following termination of
board service to a period of up to two years. In each of 2000, 2001, and 2002,
the Board agreed to receive options to purchase 5,000 shares of Class C
Non-Voting Common Stock. Under the 1997 Plan, options also are available for
grant to all employees, not just officers, based on their annual evaluations and
to newly-hired employees; the Board and management determined that granting
options to qualified non-officer employees would promote a sense of corporate
ownership in the best interest of the Corporation. Options covering 1,682,292
shares (net of cancellations) have been granted under the 1997 Plan, of which
1,382,084 remain outstanding. Options granted under the 1997 plan during 2002
have exercise prices ranging from $26.25 to $45.06 per share.

The Board approves the issuance of shares authorized under the 1997 Plan to
employees and officers, on an individual basis, as annual incentive compensation
in connection with their annual evaluations. For officers, the stock vests
immediately upon grant, but may not be transferred for one year; for other
employees the stock vests 50 percent after one year and 50 percent after two
years. Since 1997, the Board has approved the issuance of 124,295 shares of
Class C Non-Voting Common Stock as annual incentive compensation. As of December
31, 2002, there were 1,939,413 shares of Class C Non-Voting Common Stock
remaining available for future issuance under the 1997 Plan, excluding the
shares underlying outstanding options.

If a participant leaves Farmer Mac for any reason, including by reason of
retirement, all of that participant's rights to exercise any option under the
1997 Plan terminate on the earlier of the option expiration date or 90 days
after termination of employment (one year in the case of death or disability),
unless termination was for "cause," in which case the options expire
immediately, except in the case of directors, who have until the earlier of the
option expiration date or two years to exercise vested options. In 1999, the
Board amended the 1997 Plan to provide for accelerated vesting of unvested
options in the event of a participant's death or disability.

Employment Agreements

The Corporation has entered into employment agreements (the "Agreements")
with the members of senior management (for purposes of this section, the
"officers"), including the named executive officers, in order to provide them
with a reasonable level of job security, while limiting the Corporation's
ultimate financial exposure. Significant terms of the Agreements address each
officer's scope of authority and employment, base salary and incentive
compensation (shown as "bonus" in the Summary Compensation Table), benefits,
conditions of employment, termination of employment and the term of employment.
Although the Agreements expire on dates approximately three to four years from
the present,(13) the Corporation's exposure to severance pay and other costs of
termination are capped on the basis of the lesser of two years (eighteen months
in the case of dissolution) or the remaining term of the Agreement.
________________________
13 The Agreements with each of the executive officers expire June 1 of the
following years: H.D. Edelman, 2008; N.E. Corsiglia, J.G. Oslick and T.D.
Stenson, 2007.

Under the Agreements, executive compensation includes base salary and
incentive compensation. Base compensation for all officers is paid bi-weekly
over the course of each year. Possible awards of incentive compensation are
considered annually at the end of the business planning year (June 1 to May 31)
and are determined and payable under the circumstances discussed above in
"Compensation Committee Report on Executive Compensation."

The Agreements provide that each officer is entitled to certain benefits,
such as disability insurance, health, dental and vision insurance and life
insurance which are, in some cases, above the levels provided to employees
generally. See the Summary Compensation Table for information on other benefits
extended to the officers.

The Agreements also provide that an officer's employment may be terminated
"without cause" upon payment of severance pay consisting of all base salary
scheduled to be paid over the lesser of the remaining term of the Agreement or
two years. If the Board of Directors adopts a resolution authorizing a
dissolution of the Corporation, the Agreements also may be terminated upon
payment of severance pay consisting of all base salary scheduled to be paid
until the later of final dissolution or one and one-half years. An officer's
death or disability would permit termination on the same basis as "without
cause," but the Corporation's obligations in such instances are substantially
covered by insurance. The Agreements may be terminated by Farmer Mac for
"cause," as defined in the Agreements, in which event the officer will be paid
only accrued compensation to the date of termination.

Certain Relationships and Related Transactions

From time to time, Farmer Mac purchases or commits to purchase Qualified
Loans under the Farmer Mac I program and Guaranteed Portions under the Farmer
Mac II program from, or enters into other business relationships with,
institutions that own five percent or more of a class of Farmer Mac's Voting
Common Stock or that have an officer or director who is also a member of Farmer
Mac's Board of Directors. These transactions are conducted in the ordinary
course of business, with terms and conditions comparable to those applicable to
entities unaffiliated with Farmer Mac.

John Dan Raines, a Class B director, is a member of the board of directors
of AgFirst Farm Credit Bank ("AgFirst"). In 2002, the following transactions
occurred between AgFirst and Farmer Mac:

o Farmer Mac extended long-term standby commitments, or LTSPCs, on 1,810
loans having an aggregate principal balance of approximately $314.1
million (the aggregate outstanding principal balance of the 2,840
total loans underlying LTSPCs with AgFirst was 431.3 million as of
December 31, 2002);
o Farmer Mac guaranteed approximately $161.0 million of Farmer Mac
Guaranteed Securities backed by rural housing loans under which Farmer
Mac is second-loss guarantor for the last 10 percent of the
securities;
o Farmer Mac received approximately $0.2 million in guarantee fees and
approximately $1.3 million in commitment fees attributable to
transactions with AgFirst; and
o AgFirst received approximately $122,000 in servicing fees to AgFirst
for acting as a central servicer in the Farmer Mac I program;

Kenneth E. Graff, a Class B director, is the President of Farm Credit West,
ACA, which is the successor to Central Coast Farm Credit. During 2002, Farmer
Mac extended LTSPCs on 389 loans having an aggregate principal balance of
approximately $388.6 million to Farm Credit West, ACA or its affiliates (the
aggregate outstanding principal balance of the 777 total loans underlying LTSPCs
with Farm Credit West, ACA or its affiliates was 712.4 million as of December
31, 2002), and Farmer Mac received commitment fees of approximately $2.8
million.

Peter T. Paul, a Class A director, is a director of GreenPoint Financial
Corp., an affiliate of GreenPoint Mortgage, which acts as a central servicer in
the Farmer Mac I program. During 2002, GreenPoint Mortgage received
approximately $25,000 in servicing fees as central servicer.

Paul A. DeBriyn, a Class B director, is President of AgStar Farm Credit
Services, ACA. During 2002, Farmer Mac extended LTSPCs on 56 loans having an
aggregate principal balance of approximately $4.5 million to AgStar Farm Credit
Services, ACA (the aggregate outstanding principal balance of the 1,540 total
loans underlying LTSPCs with AgStar Farm Credit Services, ACA or its affiliates
was 103.3 million as of December 31, 2002), and Farmer Mac received
approximately $0.5 million in commitment fees.

Dennis L. Brack, a Class A director, is the President and Chief Executive
Officer of Bath State Bank. During 2002, Farmer Mac purchased 28 guaranteed
portions of USDA-guaranteed loans having an aggregate principal amount of
approximately $4.6 million from Bath State Bank under the Farmer Mac II program,
and Farmer Mac received approximately $50,000 in guarantee fees on Farmer Mac II
Guaranteed Securities whose underlying USDA-guaranteed portions were sold to
Farmer Mac by Bath State Bank.

W. David Hemingway, a Class A director, is Executive Vice President and
Senior Investment Officer of the Investment Division of Zions First National
Bank ("Zions"), the owner of 322,100 shares (or 31.3 percent) of Farmer Mac's
Class A Voting Common Stock. He also is Executive Vice President of Zions
Bancorporation, the holding company for Zions, which owns 1,500,300 shares (or
14.8 percent) of Farmer Mac's Class C Non-Voting Common Stock. Zions is an
active participant in both the Farmer Mac I and II programs. See "Compensation
Committee Interlocks and Insider Participation" for quantitative information
concerning Zions' transactions with Farmer Mac during 2002.

Performance Graphs

Farmer Mac has three classes of Common Stock: Class A Voting Common Stock,
Class B Voting Common Stock and Class C Non-Voting Common Stock (collectively,
the "Common Stock"). From January 1994 to June 1999, the Class A Voting Common
Stock and the Class C Non-Voting Common Stock traded on The Nasdaq Stock
Market.(14) Since June 1999, the Class A Voting Common Stock and the Class C
Non-Voting Common Stock have traded on the New York Stock Exchange.(15) As a
result of the limited market for Class B Voting Common Stock and the infrequency
of trades therein, the Class B Voting Common Stock does not trade on any market
or exchange nor is Farmer Mac aware of any publicly available quotations or
prices for Class B Voting Common Stock.
______________________________
14 The Class A Voting Common Stock was traded on the Nasdaq SmallCap Market
tier of The Nasdaq Stock Market under the symbol FAMCA, and the Class C
Non-Voting Common Stock was traded on the Nasdaq National Market tier of
The Nasdaq Stock Market under the symbol FAMCK.
15 The Class A Voting Common Stock is traded under the symbol AGM.A, and the
Class C Non-Voting Common Stock is traded under the symbol AGM.

The following graph compares the performance of Farmer Mac's Class A Voting
Common Stock and Class C Non-Voting Common Stock with the performance of the New
York Stock Exchange Composite Index ("NYSE Comp") and the Standard & Poor's 500
Diversified Financials Index ("S&P Div Fin") over the period from December 31,
1997 to December 31, 2002. The graph assumes that $100 was invested on December
31, 1997 in each of: Farmer Mac's Class A Voting Common Stock; Farmer Mac's
Class C Non-Voting Common Stock (as adjusted to reflect the 3-for-1 stock split
that became effective August 2, 1999); the NYSE Comp; and the S&P Div Fin. The
graph also assumes that all dividends were reinvested.

Comparative Total Return
(Class A Voting Common Stock and Class C Non-Voting Common Stock vs. Indices)

AGM AGM.A S&P Div Fin NYSE Comp

1997 100 100 100 100
1998 63 101 123 117
1999 98 94 156 127
2000 119 107 198 128
2001 206 170 170 115
2002 156 118 131 93

In previous years, Farmer Mac compared the performance of its Class A
Voting Common Stock and Class C Non-Voting Common Stock in its performance graph
against the Standard & Poor's Financial Index ("S&P Financial"). As of December
31, 2001, this index is no longer published. As a result, as required by
applicable SEC rules, Farmer Mac has included the transitional graph depicted
below. The transitional graph below shows a comparison of the performance of
Farmer Mac's Class A Voting Common Stock and Class C Non-Voting Common Stock
with the performance of the NYSE Comp, the S&P Div Fin (the new index selected
by Farmer Mac as depicted in the performance graph above) and the S&P Financial
over the period from December 31, 1996 through December 31, 2001. The
transitional graph assumes that $100 was invested on December 31, 1996 in each
of: Farmer Mac's Class A Voting Common Stock; Farmer Mac's Class C Non-Voting
Common Stock (as adjusted to reflect the 3-for-1 stock split that became
effective August 2, 1999); the NYSE Comp; the S&P Div Fin and the S&P Financial.
The graph also assumes that all dividends were reinvested.

Transitional Graph of Comparative Total Return
(Class A Voting Common Stock and Class C Non-Voting Common Stock vs. Indices)

AGM AGM.A S&P Financial NYSE Comp S&P Div Fin

1996 100 100 100 100 100
1997 198 64 145 130 155
1998 125 65 159 152 191
1999 194 60 163 166 243
2000 236 69 202 167 308
2001 408 109 180 152 264

Item No. 2: Selection of Independent Auditors

The By-Laws of the Corporation provide that the Audit Committee shall
select the Corporation's independent auditors "annually in advance of the Annual
Meeting of Stockholders and [that selection] shall be submitted for ratification
or rejection at such meeting." In addition, the Audit Committee reviews the
scope and results of the audits, the accounting principles being applied, and
the effectiveness of internal controls. The Audit Committee also ensures that
management fulfills its responsibilities in the preparation of the Corporation's
financial statements. During the fiscal year ended December 31, 2002, the Audit
Committee, which is composed of Messrs. DeBriyn (Chairman), Brack, Junkins and
Raines, met thirteen times.

In accordance with the By-Laws, the Audit Committee has unanimously
selected and recommended to the stockholders Deloitte & Touche LLP as the
Corporation's independent auditors for the fiscal year ending December 31, 2003.
This proposal is put before the stockholders as provided in the By-Laws and in
conformity with the current practice of seeking stockholder approval of the
selection of independent auditors. The ratification of the appointment of
Deloitte & Touche LLP as the Corporation's independent public accountants
requires the affirmative vote of a majority of the shares represented in person
or by proxy at the Meeting and entitled to be voted.

Deloitte & Touche LLP was selected to replace Arthur Andersen LLP as the
Corporation's independent auditors. Arthur Andersen LLP had acted as the
Corporation's independent auditors in connection with the Corporation's audited
financial statements for the fiscal years ended December 31, 1998 through 2001.
The decision to retain Deloitte & Touche LLP and not to rehire Arthur Andersen
LLP was recommended by the Audit Committee based upon proposals received from
four major accounting firms, including Arthur Andersen LLP, and was not based
upon any disagreements with Arthur Andersen LLP on any matter of accounting
principles or practices, financial statement disclosure or auditing scope of
procedure. Representatives of Deloitte & Touche LLP are expected to attend the
Meeting. They will have the opportunity to make a statement if they desire to do
so and will be available to answer appropriate questions from stockholders
present at the Meeting.

The Board of Directors recommends a vote FOR the proposal to ratify the
selection of Deloitte & Touche LLP as independent auditors for the Federal
Agricultural Mortgage Corporation for 2003. Proxies solicited by the Board of
Directors will be so voted unless holders of the Corporation's Voting Common
Stock specify to the contrary on their proxies, or unless authority to vote is
withheld.

Audit Fees

Deloitte & Touche LLP billed Farmer Mac an aggregate $135,000 for
professional services rendered for the audit of Farmer Mac's annual financial
statements and the reviews of the financial statements included in Farmer Mac's
quarterly reports on Form 10-Q for 2002.

All Other Fees

Deloitte & Touche LLP billed Farmer Mac an aggregate $71,570 for services
in 2002 other than the audit and review fee referred to above. These services
were for tax-related matters, various accounting matters and other technical
issues. The Audit Committee believes that Deloitte & Touche LLP's provision of
these services is compatible with the maintenance of that firm's independence in
the conduct of its auditing functions.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

Section 16(a) of the Securities Exchange Act of 1934 requires Farmer Mac's
officers and directors, and persons who beneficially own more than ten percent
of a registered class of Farmer Mac's equity securities, to file reports of
ownership and changes in ownership on Forms 3, 4 and 5 with the SEC. Officers,
directors and greater than ten percent stockholders are required by SEC
regulation to furnish Farmer Mac with copies of all Forms 3, 4 and 5 filed.

Based solely on Farmer Mac's review of its corporate records, which include
copies of forms it has received, and written representations from certain
reporting persons that they were not required to file a Form 5 for specified
fiscal years, Farmer Mac believes that all of its officers, directors and
greater than ten percent beneficial owners complied with all filing requirements
applicable to them for transactions during 2002.

Principal Holders of Voting Common Stock

To our knowledge, as of the date of this Proxy Statement, the following
institutions are the beneficial owners of either (i) 5 percent or more of the
outstanding shares of Farmer Mac's Class A Voting Common Stock or Class B Voting
Common Stock, or (ii) 5 percent or more of the total number of outstanding
shares of Farmer Mac's Voting Common Stock (both Class A and Class B).

Number Percent of Total Percent of Total
of Shares Voting Shares Shares Held
Name and Address Beneficially Owned Outstanding* By Class**
---------------- ------------------ ---------------- ----------------

AgFirst Farm Credit Bank(16) 84,024 shares of Class 5.49% 16.79%
1401 Hampton Street B Voting Common Stock
Columbia, SC 29202

AgriBank, FCB 201,621 shares of 13.17% 40.30%
375 Jackson Street Class B Voting Common Stock
St. Paul, MN 55101

CoBank 30,136 shares of Class 1.97% 6.02%
5500 South Quebec Street B Voting Common Stock
Greenwood Village, CO 80111

Farm Credit Bank of Texas 38,503 shares of Class 2.51% 7.70%
6210 Highway 290 East B Voting Common Stock
Austin, TX 78761

Farm Credit Bank of Wichita 45,023 shares of Class 2.94% 9.00%
245 North Waco B Voting Common Stock
Wichita, KS 67201

Western Farm Credit Bank 55,250 shares of Class 3.61% 11.04%
245 North Waco B Voting Common Stock
Wichita, KS 67201

Zions First National Bank(17) 322,100 shares of 21.04% 31.25%
One South Main Street Class A Voting Common Stock
Salt Lake City, UT 84111

* The percentage is determined by dividing the number of shares of Class A or
Class B Voting Common Stock owned by the total of the number of shares of
Class A and Class B Voting Common Stock outstanding.
** The percentage is determined by dividing the number of shares of the class
of Voting Common Stock owned by the number of shares of that class of
Voting Common Stock outstanding.
16 John Dan Raines, currently a member of the Board of Directors and a Class B
Nominee, is a member of the Board of Directors of AgFirst Farm Credit Bank.
17 W. David Hemingway, currently a member of the Board of Directors and a
Class A Nominee, is Executive Vice President of Zions First National Bank.

Solicitation of Proxies

The Corporation will pay the cost of the Meeting and the costs of
soliciting proxies, including the cost of mailing the proxy material. The
Corporation has retained Georgeson Shareholders Communications Inc. to act as
the Corporation's proxy solicitation firm for a fee of approximately $5,000. In
addition to solicitation by mail, employees of Georgeson Shareholders
Communications Inc. may solicit proxies by telephone, electronic mail, telegram
or personal interview. Brokerage houses, nominees, fiduciaries and other
custodians will be requested to forward solicitation material to the beneficial
owners for shares held of record by them and will be reimbursed for their
expenses by the Corporation.

Other Matters

In addition to the scheduled items of business set forth in this Proxy
Statement, the enclosed proxy confers on the Proxy Committee discretionary
authority to vote the shares represented thereby in accordance with the members'
best judgment with respect to all matters that may be brought before the Meeting
or any adjournment or postponement thereof and matters incident to the Meeting.
The Board of Directors does not know of any other matter that may properly be
presented for action at the Meeting. If any other matters should properly come
before the Meeting or any adjournment or postponement thereof, the Proxy
Committee named in the accompanying proxy intends to vote such proxy in accord
with its best judgment.

UPON WRITTEN REQUEST, FARMER MAC WILL FURNISH, WITHOUT CHARGE, TO EACH
PERSON WHOSE PROXY IS BEING SOLICITED A COPY OF ITS ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002, AS FILED WITH THE SEC, INCLUDING
FINANCIAL STATEMENTS THERETO. WRITTEN REQUESTS SHOULD BE DIRECTED TO JEROME G.
OSLICK, CORPORATE SECRETARY, FEDERAL AGRICULTURAL MORTGAGE CORPORATION, 1133
TWENTY-FIRST STREET, N.W., SUITE 600, WASHINGTON, D.C. 20036

_____________________________

The giving of your proxy will not affect your right to vote your shares
personally if you do attend the Meeting. In any event, it is important that you
complete, sign and return the enclosed proxy card promptly to ensure that your
shares are voted.

By order of the
Board of Directors,
/s/ Jerome G. Oslick
---------------------
Jerome G. Oslick
Corporate Secretary

April 18, 2003
Washington, D.C.

Appendix A

FEDERAL AGRICULTURAL MORTGAGE CORPORATION
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS, JUNE 5, 2003

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Henry D. Edelman, Jerome G. Oslick, and
Timothy L. Buzby, and any of them, as Proxies for the undersigned and to vote
all of the shares of the Class A Voting Common Stock of the FEDERAL AGRICULTURAL
MORTGAGE CORPORATION (the "Corporation") that the undersigned is entitled to
vote at the Annual Meeting of Stockholders of the Coporation to be held on June
5, 2003, and any and all adjournments thereof.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSALS.

IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE ON SUCH OTHER MATTERS AS
MAY PROPERLY COME BEFORE THE MEETING. THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS AND, WHEN PROPERLY EXECUTED, WILL BE VOTED AS INSTRUCTED
HEREIN. IF NO INSTRUCTIONS ARE GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSALS 1
AND 2.

PLEASE VOTE, DATE AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS
AND "FOR" PROPOSAL 2. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE [ X ]

1. Election of Directors.

NOMINEES
[ ] FOR ALL NOMINEES [ ] Dennis L. Brack
[ ] W. David Hemingway
[ ] WITHHOLD AUTHORITY [ ] Mitchell A. Johnson
FOR ALL NOMINEES [ ] Charles E. Kruse
[ ] Peter T. Paul
[ ] FOR ALL EXCEPT
(See instructions below)

INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark
"FOR ALL EXCEPT" and fill in the circle next to each nominee you
wish to withhold, as shown here [X]

--------------------------------------------------------------------------------

2. Proposal to approve the appointment of Deloitte & Touche LLP as independent
auditors for the Corporation for the fiscal year ending December 31, 2003.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

--------------------------------------------------------------------------------

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To change the address on your account, please check the box at right and
indicate your new address in the address space above. Please note that
changes to the registered name(s) on the account may not be submitted via
this method. [ ]
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Signature of Stockholder___________________________________ Date ____________

Note: This proxy must be signed exactly as the name appears hereon. When
shares are held jointly, each holder should sign. When signing as
executor, administrator, attorney, trustee or guardian, please give
full title as such. If the signer is a corporation, please sign full
corporate name by duly authorized officer, giving full title as
such. If signer is a partnership, please sign in partnership name by
authorized person.

Appendix B

FEDERAL AGRICULTURAL MORTGAGE CORPORATION
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS, JUNE 5, 2003

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Henry D. Edelman, Jerome G. Oslick, and
Timothy L. Buzby, and any of them, as Proxies for the undersigned and to vote
all of the shares of the Class B Voting Common Stock of the FEDERAL AGRICULTURAL
MORTGAGE CORPORATION (the "Corporation") that the undersigned is entitled to
vote at the Annual Meeting of Stockholders of the Coporation to be held on June
5, 2003, and any and all adjournments thereof.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSALS.

PLEASE VOTE, DATE AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE.

1. Election of Directors.

NOMINEES
[ ] FOR ALL NOMINEES [ ] Ralph W. "Buddy" Cortese
[ ] Paul A. DeBriyn
[ ] WITHHOLD AUTHORITY [ ] Kenneth E. Graff
FOR ALL NOMINEES [ ] John G. Nelson III
[ ] John Dan Raines
[ ] FOR ALL EXCEPT
(See instructions below)

INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark
"FOR ALL EXCEPT" and fill in the circle next to each nominee you
wish to withhold, as shown here [X]

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2. Proposal to approve the appointment of Deloitte & Touche LLP as independent
auditors for the Corporation for the fiscal year ending December 31, 2003.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

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Signature of Stockholder___________________________________ Date ____________