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

Filed by the Registrant |X| Filed by a Party other than the Registrant [ ]

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 toss.240.14a-12

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

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

Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
_____________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
_____________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
_____________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
_____________________________________________________________________
(5) Total fee paid:
_____________________________________________________________________
[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 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.
(1) Amount Previously Paid:
_____________________________________________________________
(2) Form, Schedule or Registration Statement No.:
_____________________________________________________________
(3) Filing Party:
_____________________________________________________________
(4) Date Filed:
_____________________________________________________________

FEDERAL AGRICULTURAL MORTGAGE CORPORATION

[FARMER MAC LOGO]

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

TO HOLDERS OF FARMER MAC
VOTING COMMON STOCK

April 21, 2004

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 2004
Annual Meeting of Stockholders of the Corporation to be held on Thursday, June
3, 2004, at 9:00 a.m. local time at the Embassy Suites Hotel, 1250 Twenty-Second
Street, N.W., Washington, D.C. 20037. The Notice of Annual Meeting and Proxy
Statement accompanying this letter describe the business to be transacted at the
meeting.

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 2003 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

[FARMER MAC LOGO]

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

TO HOLDERS OF FARMER MAC
NON-VOTING COMMON STOCK

April 21, 2004

Dear Farmer Mac Stockholder:

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

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

NOTICE OF ANNUAL MEETING
April 21, 2004

Notice is hereby given that the 2004 Annual Meeting of Stockholders of the
Federal Agricultural Mortgage Corporation ("Farmer Mac" or the "Corporation")
will be held on Thursday, June 3, 2004, 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 holders
of Class A Voting Common Stock and five of whom will be elected
by holders of Class B Voting Common Stock, 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 2004;

and to consider and act upon any other business that may properly be brought
before the meeting or any adjournment or postponement of the meeting. 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 9, 2004 are
entitled to notice of and to vote at the meeting and any adjournment(s) of the
meeting.

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 on the card
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...................................4
Item No. 1: Election of Directors...........................................4
Information about Nominees for Director......................................7
Class A Nominees.......................................................7
Class B Nominees.......................................................8
Directors Appointed by the President of the United States..............9
Stock Ownership of Directors and Executive Officers.........................10
Director Independence.......................................................12
Report of the Audit Committee...............................................12
Executive Officers..........................................................14
Compensation of Directors and Executive Officers............................15
--Compensation of Directors.................................................16
--Compensation of Executive Officers........................................16
General...............................................................16
Compensation Committee Report on Executive Compensation...............17
Compensation Committee Interlocks and Insider Participation...........20
Summary Compensation Table............................................21
Option Grants During 2003.............................................22
Option Exercises and Year End Value...................................23
Equity Compensation Plans.............................................23
Employment Agreements.................................................25
Certain Relationships and Related Transactions........................26
Performance Graph.....................................................28
Item No. 2: Selection of Independent Auditors..............................29
Audit Fees............................................................30
Audit-Related Fees....................................................30
Tax Fees..............................................................30
All Other Fees........................................................30
Audit Committee Pre-Approval Policies.................................31
Compliance with Section 16(a) of the Securities Exchange Act of 1934........31
Principal Holders of Voting Common Stock....................................31
Solicitation of Proxies.....................................................32
Other Matters...............................................................33
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 LOGO]

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 3, 2004

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 Corporation is not soliciting proxies from the
holders of its Class C Non-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 3, 2004, 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 of the Meeting. The Notice of Annual Meeting, this Proxy
Statement and the enclosed proxy card are being mailed to stockholders on or
about April 21, 2004.

The Board of Directors of the Corporation (the "Board of Directors" or
"Board") 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 2004. 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. Currently, thirteen of Farmer
Mac's fifteen directors are "independent," as defined in Farmer Mac's Corporate
Governance Guidelines and New York Stock Exchange ("NYSE") listing standards.
After the Meeting, assuming all of the nominees for director are elected,
fourteen of Farmer Mac's fifteen directors will be independent. See "Director
Independence" for more information regarding the Board's independence
determinations.

The Board of Directors has fixed April 9, 2004 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 Voting Common Stock.

Proposals of stockholders to be presented at the 2004 Annual Meeting of
Stockholders were required to be received by the Corporate Secretary before
December 20, 2003 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 2004, 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 2005 Annual Meeting of Stockholders, the Corporate Secretary must
receive the proposal before December 17, 2004 to be eligible for inclusion in
the 2005 Proxy Statement. In addition, if any stockholder notifies the
Corporation after March 3, 2005 of an intent to present a proposal at the
Corporation's 2005 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

In 2003, the Board of Directors held a total of eight meetings and
committees of the Board held a total of fifty-one meetings. Each member of the
Board attended 75 percent or more of the aggregate number of meetings of the
Board of Directors and of the committees on which he or she served during 2003,
except for W. David Hemingway, who is not a nominee for re-election. All members
of the Board of Directors are expected to attend the Annual Meeting of
Stockholders, which is held in conjunction with a regularly scheduled meeting of
the Board of Directors. Fourteen of the fifteen members of the Board of
Directors attended the 2003 Annual Meeting of Stockholders. Stockholders may
send communications directly to members of the Board of Directors by writing to
them at Federal Agricultural Mortgage Corporation, 1133 Twenty-First Street,
N.W., Suite 600, Washington, D.C. 20036.

The Board has established a number of committees to assist it in the
performance of its responsibilities. The committees currently consist of the
following: Audit Committee, Compensation Committee, Corporate Governance
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 was absorbed into the Corporate Governance
Committee in April 2004, set agendas for the meetings of the Board of Directors
and was able to exercise certain powers of the Board of Directors during the
intervals between meetings of the Board, met six times during the fiscal year
ended December 31, 2003. The Finance Committee, which is responsible for
determining the financial policies of the Corporation and managing the
Corporation's financial affairs, met seven times during the fiscal year ended
December 31, 2003. The Program Development Committee, which is responsible for
reviewing and approving all policy matters relating to changes to the
Corporation's Seller/Servicer Guide and making recommendations to the Board of
Directors on both new and existing programs, met seven times during the fiscal
year ended December 31, 2003. 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 five times during the
fiscal year ended December 31, 2003. 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 (formerly the Nominating
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. Three of the Class A nominees and all 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
Corporation's 2005 Annual Meeting of Stockholders, 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 1, 2004 and June 3, 2004 and the ten members who are
elected by the holders of Farmer Mac's Voting Common Stock.

In order to facilitate the selection of director nominees, the Board of
Directors utilizes a Corporate Governance Committee that consists of the
Chairman of the Board, the Vice Chairman of the Board and two additional members
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
current members of the Corporate Governance Committee are: Appointed Members
Messrs. Dailey and Junkins; Class A directors Messrs. Kruse and Paul (not a
nominee for re-election); and Class B directors Messrs. Graff and Raines. As
described in more detail in "Director Independence," the Board has determined
that Mr. Graff is not "independent," as defined in Farmer Mac's Corporate
Governance Guidelines and NYSE listing standards. Accordingly, Mr. Graff has
decided to withdraw as a member of the Corporate Governance Committee if elected
as a director at the Meeting, at which time all of the directors who serve on
the Corporate Governance Committee will be independent. The charter of the
Corporate Governance Committee and Farmer Mac's Corporate Governance Guidelines
are available on Farmer Mac's website, www.farmermac.com, in the "Corporate
Governance" tab in the "Investors" section.

The Board has adopted a policy statement on directors that expresses the
general principles that should govern director selection and conduct, which the
Corporate Governance Committee uses in identifying and evaluating potential
candidates for director. The Corporate Governance Committee reviews, on an
annual basis, the appropriate skills and characteristics required of Board
members in the context of the perceived needs of the Board at that point in
time. The Committee strives to identify and retain as members of the Board
individuals who have the qualities, business background and experience that will
enable them to contribute significantly to the development of Farmer Mac's
business and its future success. The Board has determined that its elected
members should be comprised of individuals with a variety of business
backgrounds and experiences who are deemed to have a broad perspective and good
record of accomplishment either as senior members of agricultural business
management, as agricultural or commercial lenders or as entrepreneurs. The Board
has also determined that it is desirable to have qualified women and minority
representation on the Board. In selecting nominees for director, the Corporate
Governance Committee also considers an individual's character, judgment,
fairness and overall ability to serve Farmer Mac. Thus, in addition to
considering the current needs of the Board and the quality of an individual's
professional background and experience, the Corporate Governance Committee seeks
individuals who:

o have integrity, independence, and an inquiring mind; an ability to
work with others; good judgment; intellectual competence; and
motivation;

o have the willingness and ability to represent all stockholders'
interests, and not just the particular constituency that elected the
director to serve on the Board;

o have an awareness of and a sensitivity to the public purpose of Farmer
Mac and a sense of responsibility to Farmer Mac's intended
beneficiaries;

o are willing to commit the necessary time and energy to prepare for and
attend Board and committee meetings; and

o are willing and have the ability to advance their views and opinions
in a forthright manner, but, upon the conclusion of deliberations, to
act in the best interests of Farmer Mac, and, once a decision is
reached by a majority, to support the decision.

The Corporate Governance Committee met six times during the fiscal year
ended December 31, 2003. The 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. Two of the ten
Nominees, Dennis E. Everson and Timothy F. Kenny, are not current members of the
Board standing for re-election. Mr. Everson was recommended to the Corporate
Governance Committee by a non-management director; at the request of a director,
Mr. Kenny was identified for the Committee by an officer of Farmer Mac other
than the chief executive officer. No fees were paid to any director search firms
or other third parties to assist in identifying and evaluating the Nominees.

In identifying potential candidates for the Board, the Corporate Governance
Committee considers suggestions from Board members, management, stockholders and
others. From time to time, the Committee may retain a search firm to assist in
identifying potential candidates and gathering information about the background
and experience of such candidates. The Committee will consider all proposed
nominees, including stockholder nominees, in light of the qualifications
discussed above and the assessed needs of the Board at the time. For the 2005
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, 51, 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 Investment Committee
since 1999 and a member of the Union County, Indiana Foundation board of
directors since 2003. 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
previously served a three-year term on the Purdue University Dean's Advisory
Council.

Dennis E. Everson, 53, has been President and Manager of the First Dakota
National Bank Agri-business Division since 2002. From 1984 until 2002, he was
Vice President and Manager of the First Dakota National Bank Agri-business
Division. From 2000 until 2002, Mr. Everson was a member of the Federal Home
Loan Bank Committee of the American Bankers Association. During 1998, he served
as Chairman of the Agricultural & Rural Bankers Committee of the American
Bankers Association.

Mitchell A. Johnson, 62, has been a member of the Board of Directors of the
Corporation since June 12, 1997 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.

Timothy F. Kenny, 42, is a Certified Public Accountant and Managing Director
with BearingPoint, Inc. (formerly KPMG Consulting, Inc.) in McLean, Virginia. He
joined KPMG LLP, the predecessor organization to KPMG Consulting, in 1986 and
held that position until the separation of KPMG Consulting from KPMG LLP in
February 2001. While with KPMG LLP, Mr. Kenny served as a technical resource for
the firm's partners and managers nationwide on mortgage banking issues,
including financial accounting and reporting; auditing; and operational,
strategic, and regulatory matters. Currently, Mr. Kenny directs a team of
financial professionals on consulting projects with various federal credit
agencies. Mr. Kenny previously served on the Board of Directors of the Mortgage
Bankers Association of Metropolitan Washington.

Charles E. Kruse, 59, 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.

Class B Nominees

Ralph W. "Buddy" Cortese, 57, has been a member of the Board of Directors of the
Corporation since June 5, 2003, and is a member of the Compensation Committee.
He 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, 49, has been a member of the Board of Directors of the
Corporation since June 1, 2000 and 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, 57, has been a member of the Board of Directors of the
Corporation since June 12, 1997 and is a member of the Corporate Governance
Committee and serves as chairman of the Program Development Committee. Mr. Graff
has been President of Farm Credit West, ACA located in Visalia, California since
January 1, 2002 and was President of Central Coast Farm Credit from late 1987
until Farm Credit West was created through the January 1, 2002 merger of Central
Coast Farm Credit and Central Coast Farm Credit ACA. 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, 54, 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 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, 60, 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
Corporate Governance 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

Julia Bartling, 45, has been a member of the Board of Directors of the
Corporation since June 5, 2003 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 June 3, 2003. Ms. Bartling has been an
elected member of the South Dakota House since January 1, 2001. She served as
the Gregory County, South Dakota, Auditor from 1983 through 2000. Ms. Bartling,
along with her spouse, have owned and operated Bartling Feed, Grain & Trucking
since 1977.

Fred L. Dailey, 58, 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 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 is
the Director of the Ohio Department of Agriculture, in which position he has
served 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, 58, 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
serves as chairman of 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.

Glen O. Klippenstein, 66, has been a member of the Board of Directors of the
Corporation since June 5, 2003 and is a member of the Audit Committee and the
Public Policy Committee. His appointment to the Board was confirmed by the
United States Senate on June 3, 2003. Mr. Klippenstein has served as the Chief
Executive Officer of the American Chianina Association since November 8, 2000.
Prior to 2000, he operated his family farm, engaged in cattle production.

Lowell L. Junkins, 60, 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 Corporate Governance Committee, the Executive
Committee and 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 and was reconfirmed by the Senate on
June 3, 2003. 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.

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 9, 2004, 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

Julia Bartling ------ ------ 4,000 *
Dennis L. Brack ------ ------ 14,946 *
Timothy L. Buzby ------ ------ 38,970 *
Nancy E. Corsiglia ------ ------ 243,310 2.3%
Ralph W. Cortese ------ ------ 4,183 *
Fred L. Dailey ------ ------ 4,000 *
Grace T. Daniel ------ ------ 4,233 *
Paul A. DeBriyn ------ ------ 17,677 *
Henry D. Edelman ------ ------ 615,215 5.8%
Kenneth E. Graff ------ ------ ------ *
W. David Hemingway(2)(3) 322,100 31.3% 1,538,504 14.6%
Mitchell A. Johnson ------ ------ 28,804 *
Lowell L. Junkins ------ ------ 13,999 *
Glen O. Klippenstein ------ ------ 4,059 *
Charles E. Kruse ------ ------ 15,201 *
Michael P. Morris ------ ------ 2,666 *
John G. Nelson III ------ ------ 22,355 *
Jerome G. Oslick ------ ------ 62,309 *
Peter T. Paul(4) ------ ------ 52,928 *
John Dan Raines ------ ------ 25,187 *
Tom D. Stenson ------ ------ 124,793 1.2%
All directors and
executive officers 322,100 31.3% 2,837,339 26.9%
as a group (21 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,
598,274 shares; Mr. Buzby, 35,626 shares; Ms. Corsiglia, 233,869 shares;
Mr. Morris, 2,666 shares; Mr. Oslick, 58,059 shares; and Mr. Stenson, 108,667
shares; each of Ms. Bartling, Ms. Daniel and Messrs. Cortese, Dailey and
Klippenstein, 4,000 shares; Mr. Hemingway, 31,000 shares; Mr. Nelson, 22,000
shares; Mr. DeBriyn, 17,200 shares; each of Messrs. Paul, Raines and Johnson,
25,000 shares; each of Messrs. Brack and Kruse, 14,000 shares; Mr. Junkins,
13,999 shares; and all directors and executive officers as a group, 1,244,360
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 38,204 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.
4 Not a nominee for re-election.

Director Independence

The Board of Directors has adopted a formal set of categorical standards to
form the basis for determinations of director independence required by NYSE
rules. To be considered "independent" for purposes of these standards, the Board
must affirmatively determine that a director does not have a material
relationship with Farmer Mac other than as a director. The standards, which are
included in Farmer Mac's Corporate Governance Guidelines available on the
Corporation's website, www.farmermac.com, under the "Corporate Governance" tab
of the "Investors" section, meet all requirements for director independence
contained in SEC and NYSE rules. In applying the standards, the Board broadly
considers all relevant facts and circumstances.

In April 2004, the Board considered all direct and indirect transactions
and relationships between each director and the Corporation and its management.
As a result of its review, the Board affirmatively determined that each of
Farmer Mac's current directors, other than Mr. Graff and Mr. Hemingway, meets
the director independence standards referred to above and, therefore, is
independent. Mr. Hemingway, who is not a nominee for re-election, was determined
to have a material relationship with Farmer Mac by virtue of his executive
management positions with Zions First National Bank and Zions Bancorporation.
See "Compensation of Directors and Executive Officers--Compensation of Executive
Officers--Compensation Committee Interlocks and Insider Participation." Mr.
Graff, who is a nominee for re-election, was determined to have a material
relationship with Farmer Mac by virtue of Farmer Mac's receipt of approximately
$3.6 million in guarantee and commitment fees in 2003 from Farm Credit West,
ACA, of which Mr. Graff is the President, which amount exceeded 2 percent of
Farm Credit West, ACA's consolidated gross revenues for 2003, approximately
$113.6 million. See "Compensation of Directors and Executive
Officers--Compensation of Executive Officers--Certain Relationships and Related
Transactions." The Board has determined that Mr. Everson and Mr. Kenny, the two
Nominees who are not current members of the Board, meet the criteria for
director independence.

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 the report by
reference into a document.

The Audit Committee adopted a revised committee charter, which adoption was
ratified by the full Board on February 5, 2004. The complete text of the
charter, which reflects standards set forth in new SEC regulations and NYSE
listing standards, is available on the Corporation's website, www.farmermac.com,
under the "Corporate Governance" tab of the "Investors" section. The Board
reviews and approves changes to the Audit Committee Charter annually. The Board
of Directors has determined that: (1) all the directors who serve on the Audit
Committee are "independent," as defined in Farmer Mac's Corporate Governance
Guidelines, SEC rules and NYSE listing standards; and (2) Paul A. DeBriyn,
chairman of the Audit Committee, is an "audit committee financial expert," as
defined in SEC rules.

Audit Committee Report for the Year Ended December 31, 2003

To Our Stockholders:

Management is primarily responsible for the financial reporting process,
including the system of internal accounting controls, and for the preparation of
Farmer Mac's consolidated financial statements in accordance with generally
accepted accounting principles in the U.S. The Audit Committee monitors Farmer
Mac's financial reporting processes and systems of internal accounting control,
the independence and performance of the independent auditors and the performance
of the internal audit function. The Corporation's independent auditors are
responsible for auditing those financial statements and expressing an opinion as
to their conformity with generally accepted accounting principles.

Management has represented to the Audit Committee that Farmer Mac's
consolidated financial statements were prepared in accordance with generally
accepted accounting principles in the U.S. The Audit Committee reviewed and
discussed Farmer Mac's consolidated financial statements with both management
and the Corporation's independent auditors prior to their issuance. The Audit
Committee has discussed with the independent auditors their evaluation of the
accounting principles, practices and judgments applied by management, and the
Audit Committee has discussed any items required to be communicated to it by the
independent auditors pursuant to rules and regulations promulgated by the
Securities and Exchange Commission and the Public Company Oversight Board and
the standards established by the American Institute of Certified Public
Accountants, including 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. The Audit Committee has reviewed the
audit fees of the independent auditors. It also has approved non-audit services
and reviewed fees for such services to assure compliance with applicable
provisions of the Securities Exchange Act of 1934, as amended, and applicable
rules and regulations to assure compliance with the auditor independence
requirements that prohibit independent auditors from performing specified
services that might impair their independence as well as compliance with Farmer
Mac's and the Audit Committee's policies.

The Audit Committee discussed with Farmer Mac's independent auditors the
overall scope of and plans for its audit. 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.

In reliance upon 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, 2003 for filing with
the Securities and Exchange Commission, as filed on March 15, 2004.

Audit Committee

Paul A. DeBriyn, Chairman
Dennis L. Brack
Glen O. Klippenstein
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 55 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.

Timothy L. Buzby 35 Vice President - Controller since June 5, 2003. From
July 1997 until he joined Farmer Mac as Controller in
December 2000, Mr. Buzby was Chief Financial Officer
for George Mason Mortgage Corporation, a regional
residential mortgage lender, from March 2000 to
December 2000 and for Mortgage Edge Corporation, a
national mortgage lender, from July 1997 to February
2000. Prior to July 1997, Mr. Buzby was a Manager on
the Mortgage Consulting Staff of KPMG Peat Marwick,
LLP.

Nancy E. Corsiglia 48 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 57 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.

Michael P. Morris 46 Vice President - Mortgage Servicing since December 4,
2003. From 1997 until he joined Farmer Mac as Director
- Portfolio Management in April 2002, Mr. Morris
managed the Prior Approval Department of the Western
Farm Credit Bank in Sacramento, California. From 1994
to 1997, he served as Vice President and Special Assets
Manager for Farm Credit Services Southwest in Tempe,
Arizona. From 1992 to 1994, he served as Vice President
of Credit Review for Farm Credit Services Southwest.
Mr. Morris also served as an Examiner-in-Charge for the
Farm Credit Administration from 1986 to 1991.

Tom D. Stenson 53 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. Cortese, Dailey, DeBriyn, Hemingway (not a nominee for
re-election), and Johnson (chairman). No member of Farmer Mac's Compensation
Committee is or has been an officer or employee of the Corporation. As described
in more detail in "Director Independence," the Board has determined that Mr.
Hemingway is not "independent," as defined in Farmer Mac's Corporate Governance
Guidelines and NYSE listing standards. Because Mr. Hemingway is not a nominee
for re-election, all of the directors who serve on the Compensation Committee
will be independent after the Meeting. During the fiscal year ended December 31,
2003, the Compensation Committee met five times.

The Committee adopted a charter for the Compensation Committee, which
adoption was ratified by the full Board on February 5, 2004. The complete text
of the charter, which reflects standards set forth in new SEC regulations and
NYSE rules, is available on the Corporation's website, www.farmermac.com, under
the "Corporate Governance" tab in the "Investors" section.

-- 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 that the chairman of
the Audit Committee receives a $15,000 annual retainer and the Chairman of the
Board 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 of the Corporation, members of the Board are
compensated at the same daily rate for certain other meetings and conferences
with 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 2003 was approximately $308,625. Since June 13, 1997,
each director has been granted options annually to purchase 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 6,000 options granted to each member of the Board of Directors in
2003 had a present value of $63,360(5) at the grant date. The total
compensation, cash and options received by all members of the Board of Directors
in 2003 was approximately $1,259,025.
____________________
5 The present value at grant date of options granted during 2003 has been
estimated using the Black-Scholes option pricing model with the following
assumptions: a dividend yield of 0.0%; an expected volatility of 47.8%; a
risk-free interest rate of 2.9%; 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 Circulars")
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 for agricultural mortgage
loans 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, internal controls, 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 cap compensation at
Farmer Mac at 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 maximum 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 2002-03 12-month business plan
cycle, or business planning year, from June 1, 2002 to May 31, 2003, five
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, through effective
risk management, internal controls, resource allocation and corporate
governance; to optimize use of the capital markets; to maintain adequate
capital; and to maintain effective government, public and investor relations.

Method of Determining Management Compensation for the 2002-03 Business
Planning Year. The Corporation's procedures for determining management
compensation have been consistent from year to year. Toward the end of the
Corporation's May 31st 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 twelve
months.

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 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 and the CEO. The Committee
members then meet in executive session (without the CEO present) to discuss the
performance of the CEO. Thus, the CEO participates in the evaluation of each
other senior member of management, but not in his own. The Compensation
Committee includes the CEO in its consideration of the performance and total
compensation of each of the other members of senior management and then
considers the performance and total compensation of the CEO in an executive
session without the CEO present and prepares a detailed written performance
evaluation of the CEO. 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 2002-03 business planning year by reviewing the
contribution of each individual to the accomplishment of the strategies and
objectives under the 2002-03 business plan. The Compensation Committee also
evaluated the Corporation's non-financial achievements during the business
planning year, recognizing that the accomplishment of the Corporation's
Congressional mission is a significant aspect of the continuing development of
Farmer Mac. That mission involves the establishment of programs and products
that provide greater liquidity and lending capacity to agricultural lenders,
increase the availability of long-term credit to farmers and ranchers and
facilitate capital market investments that result in long-term fixed-rate
agricultural mortgages. In that regard, the Compensation Committee considered
the significant business accomplishments and financial results achieved during
the 2002-03 business planning year, including advancement of the Corporation's
Congressional mission and the 31 percent increase in fiscal year net income for
2002 compared to 2001 while reducing loan delinquency rates. 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;
improvements in internal controls; maximizing revenue through sophisticated
investment techniques; and increasing the profitability of its programs by
holding loans rather than securitizing them when market conditions were
unfavorable. 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 below.

The proportion of the total compensation package representing incentive
compensation (annual cash and long-term non cash incentive compensation) for the
2002-03 business planning year was 78 percent for the CEO and ranged between 61
percent and 70 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 2002-03 business planning
year, annual incentive compensation awards otherwise payable in cash to members
of senior management were instead paid in an approximately equal combination of
restricted stock and stock options; accordingly, long-term incentive
compensation represented 100 percent of the total incentive compensation package
for the 2002-03 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 2002-03 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 2002-03
business planning year, Mr. Edelman received a base salary of $456,629 and was
awarded incentive compensation with a total estimated value of approximately
$1,647,851. With respect to the incentive compensation component of Mr.
Edelman's total compensation, he received options to purchase 120,111 shares of
Farmer Mac Class C Non-Voting Common Stock (the options, valued at $1,268,372 as
of the grant date, vest as follows: one-third vested immediately upon grant;
one-third will vest on May 31, 2004; and the remaining one-third will vest on
May 31, 2005) and 16,941 shares of restricted stock, which are not transferable
until May 31, 2004. 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
Ralph W. Cortese W. David Hemingway

Compensation Committee Interlocks and Insider Participation

Director 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 14.2 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
2003:

o Farmer Mac purchased 148 loans having an aggregate principal
amount of approximately $74.5 million from Zions under the Farmer
Mac I program, representing approximately 38.7 percent of that
program's volume for the year;

o Farmer Mac purchased six USDA-guaranteed portions having an
aggregate principal amount of approximately $1.7 million from
Zions under the Farmer Mac II program, representing approximately
0.6 percent of that program's volume for the year;

o Farmer Mac sold approximately $75.8 million of Farmer Mac
Guaranteed Securities to Zions at no gain or loss;

o Farmer Mac and Zions entered into interest rate swap transactions
having an aggregate notional principal amount of approximately
$28.6 million (the aggregate outstanding notional principal
amount all interest rate swap transactions between Farmer Mac and
Zions was $307.6 million as of December 31, 2003);

o Farmer Mac received approximately $1.4 million in guarantee fees
on Farmer Mac Guaranteed Securities backed by loans swapped with
or sold to Farmer Mac by Zions;

o Farmer Mac paid Zions approximately $48,000 in underwriting and
loan file review fees;

o Zions received approximately $1.3 million in servicing fees for
acting as a central servicer in the Farmer Mac I program;

o Zions received approximately $225,500 in fees for acting as agent
with respect to approximately $154.7 million of Farmer Mac
medium-term notes; and

o Zions received approximately $18,400 in commissions for acting as
dealer with respect to approximately $189.0 million par value of
Farmer Mac discount notes.

Accordingly, Director W. David 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, 2003.

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

Henry D. Edelman 2003 469,801 379,478 -- 120,111 38,001
President and 2002 447,480 344,195 -- 84,866 36,211
Chief Executive Officer 2001 426,256 335,924 -- 90,387 29,706

Timothy L. Buzby(8) 2003 161,348 74,906 -- 21,035 25,728
Vice President - Controller 2002 135,029 61,401 -- 13,975 20,885
2001 126,021 25,592 -- 4,627 19,468

Nancy E. Corsiglia 2003 301,381 157,853 -- 50,356 33,291
Vice President - Finance, 2002 287,081 143,958 -- 35,769 33,671
Treasurer and CFO 2001 263,820 155,450 -- 40,220 28,539

Jerome G. Oslick 2003 244,093 95,200 -- 25,750 34,131
Vice President - 2002 232,521 87,387 -- 18,410 35,926
General Counsel and 2001 201,875 102,843 -- 22,483 30,614
Corporate Secretary

Tom D. Stenson 2003 246,743 122,371 -- 35,852 33,531
Vice President - 2002 234,992 113,490 -- 25,901 34,226
Agricultural Finance 2001 217,528 109,527 -- 26,951 29,131

6 All bonuses paid to Mr. Edelman, Mr. Buzby, Ms. Corsiglia, Mr. Oslick and
Mr. Stenson in 2003 were in the form of shares of Farmer Mac Class C Non-Voting
Stock that may not be transferred until May 31, 2004. The shares were granted on
June 5, 2003 and valued at the closing price ($22.40) of Class C Non-Voting
Common Stock on the date of grant. The numbers of shares granted were: Mr.
Edelman, 16,941; Mr. Buzby, 3,344; Ms. Corsiglia, 7,047; Mr. Oslick, 4,250; and
Mr. Stenson, 5,463.
7 Includes contributions to the Corporation's defined contribution pension
plan in the amount of $32,841 for 2003 on behalf of each of Mr. Edelman, Ms.
Corsiglia, Mr. Oslick and Mr. Stenson and $25,536 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 and Vice President
- Controller on June 5, 2003.

Option Grants During 2003

The table below sets forth, as to each of the named executive officers, the
following information with respect to option grants during 2003 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 2003; (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(9) in Year ($/Share) Date Value(10)
------------------------------------------------------------------------------------------

Henry D. Edelman 120,111 43.8% $22.40 June 5, 2013 $1,268,372
Timothy L. Buzby 21,035 7.7 22.40 June 5, 2013 222,130
Nancy E. Corsiglia 50,356 18.4 22.40 June 5, 2013 531,759
Jerome G. Oslick 25,750 9.4 22.40 June 5, 2013 271,920
Tom D. Stenson 35,852 13.1 22.40 June 5, 2013 378,597

9 Options granted in 2003 are exercisable in stages: one-third vested on
June 5, 2003, and one-third vest on each of May 31, 2004 and May 31, 2005.
10 The present value at grant date of options granted during 2003 has been
estimated using the Black-Scholes option pricing model with the following
assumptions: a dividend yield of 0.0%; an expected volatility of 47.8%; a
risk-free interest rate of 2.9%; 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 2003 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(11)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized Unexercisable Unexercisable
---------------------------------------------------------------------------------------------

Henry D. Edelman 175,416 $4,493,299 533,873 / 108,362 $5,529,362 / $765,507
Timothy L. Buzby -- -- 23,955 / 18,682 83,89 / 134,060
Nancy E. Corsiglia 74,181 1,864,179 206,727 / 45,494 1,198,039 / 320,939
Jerome G. Oslick 24,049 356,176 44,095 / 23,303 47,814 / 164,117
Tom D. Stenson 62,054 694,334 79,078 / 32,534 586,851 / 253,184

11 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 ($31.96) for the Class C Non-Voting Common
Stock on December 31, 2003.

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,
2003.

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

Equity compensation
plans not approved by
stockholders 1,569,479 $22.32 1,489,739

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.

1996 Plan. In 1996, the Board adopted a 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 5,690 remained outstanding as
of December 31, 2003, 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"), 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. Through 2003,
options granted under the 1997 Plan vested one-third on the date of grant,
one-third the following year and one-third the second following year. Beginning
in 2004, options granted under the 1997 Plan vest one-third in each of the first
three years following the date of option grant. 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. As of December 31, 2003 Options covering 2,044,896 shares (net
of cancellations) have been granted under the 1997 Plan, of which 1,563,189
remain outstanding. Options granted under the 1997 Plan during 2003 have
exercise prices ranging from $22.40 to $26.68 per share.

The Board approved 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 220,855 shares of
Class C Non-Voting Common Stock as annual incentive compensation. Farmer Mac
does not expect to issue shares of stock as incentive compensation after June
2003. As of December 31, 2003, there were 1,489,739 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 generally expire on dates approximately three to four
years from the present(12), 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.
_____________________
12 The Agreements with each of the executive officers expire June 1 of the
following years: H.D. Edelman, 2008; T.L. Buzby, N.E. Corsiglia, J.G. Oslick and
T.D. Stenson, 2007; and M.P. Morris, October 31, 2005.

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 2003, the following transactions
occurred between AgFirst and Farmer Mac:

o Farmer Mac purchased four loans having an aggregate principal
amount of approximately $0.9 million from AgFirst under the
Farmer Mac I program, representing approximately 0.5 percent of
that program's volume for the year;
o Farmer Mac extended LTSPCs on 1,016 loans having an aggregate
principal balance of approximately $172.5 million to AgFirst (the
aggregate outstanding principal balance of the 3,843 total loans
underlying LTSPCs with AgFirst was $545.9 million as of December
31, 2003);
o For the year ended December 31, 2003, Farmer Mac guaranteed
approximately $393.0 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;
the total guaranteed amount outstanding as of December 31, 2003
was $741.5 million;
o Farmer Mac received approximately $0.4 million in guarantee fees
and approximately $2.1 million in commitment fees attributable to
transactions with AgFirst;
o AgFirst received approximately $107,000 in servicing fees for
acting as a central servicer in the Farmer Mac I program; and
o As of December 31, 2003, Farmer Mac owned approximately $88.0
million of fixed rate preferred stock issued by AgFirst, which
Farmer Mac purchased on the open market prior to 2003.

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 2003, Farmer
Mac extended LTSPCs on 287 loans having an aggregate principal balance of
approximately $174.3 million to Farm Credit West, ACA or its affiliates ("FCW"),
and Farmer Mac received commitment fees of approximately $1.9 million. During
third quarter 2003, FCW exercised the conversion feature incorporated in all
existing LTSPCs, and Farmer Mac converted $722.3 million of FCW's LTSPCs into a
Farmer Mac I Guaranteed Security in a swap transaction. Farmer Mac received
guarantee fees of approximately $1.7 million on FCW's Farmer Mac I Guaranteed
Security during 2003. As of December 31, 2003, the aggregate outstanding
principal balance of the 157 loans underlying LTSPCs with FCW was $106.2
million, and the aggregate outstanding balance of the 885 loans underlying FCW's
Farmer Mac I Guaranteed Security was $680.2 million.

Paul A. DeBriyn, a Class B director, is President of AgStar Financial
Services, ACA ("AgStar"). During 2003, Farmer Mac extended LTSPCs on 2,347 loans
having an aggregate principal balance of approximately $194.2 million to AgStar
(the aggregate outstanding principal balance of the 3,570 loans underlying
LTSPCs with AgStar Financial Services, ACA was $265.6 million as of December 31,
2003), and Farmer Mac received commitment fees of approximately $0.9 million.
During first quarter 2004, AgStar became a Farmer Mac-approved certified
facility. As such, AgStar is purchasing qualified loans and Farmer
Mac-guaranteed securities. AgStar's activities as a certified facility in 2004
have the potential to include transactions in which the amount involved exceeds
$60,000.

Ralph W. Cortese, a Class B director, is a member of the board of directors
of Farm Credit Bank of Texas. During 2003, Farmer Mac extended LTSPCs on 295
loans having an aggregate principal balance of approximately $47.4 million to
Farm Credit Bank of Texas (the aggregate outstanding principal balance of the
275 loans underlying LTSPCs with AgStar Financial Services, ACA was $40.8
million as of December 31, 2003), and Farmer Mac received commitment fees of
approximately $89,000.

Dennis L. Brack, a Class A director, is the President and Chief Executive
Officer of Bath State Bank. During 2003, Farmer Mac purchased 37 USDA-guaranteed
portions having an aggregate principal amount of approximately $8.7 million from
Bath State Bank under the Farmer Mac II program, and Farmer Mac received
approximately $45,000 in guarantee fees on Farmer Mac II Guaranteed Securities
backed by USDA-guaranteed portions sold to Farmer Mac by Bath State Bank.

Dennis E. Everson, a nominee for election by Class A Holders, is the
President and Manager of the Agri-business Division of First Dakota National
Bank ("First Dakota"). During 2003, Farmer Mac purchased 48 loans having an
aggregate principal amount of approximately $14.8 million from First Dakota
under the Farmer Mac I program, representing approximately 7.8 percent of Farmer
Mac I cash window volume for the year. Farmer Mac received in 2003 approximately
$255,000 in guarantee fees on Farmer Mac Guaranteed Securities backed by loans
sold to Farmer Mac by First Dakota. Farmer Mac also purchased 31 USDA-guaranteed
portions having an aggregate principal amount of approximately $9.0 million from
First Dakota under the Farmer Mac II program during 2003, representing
approximately 3.3 percent of that program's volume for the year. Farmer Mac
received in 2003 approximately $32,000 in guarantee fees on Farmer Mac II
Guaranteed Securities backed by USDA-guaranteed portions sold to Farmer Mac by
First Dakota.

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. Mr. Hemingway is
not a nominee for re-election. See "Compensation Committee Interlocks and
Insider Participation" for quantitative information concerning Zions'
transactions with Farmer Mac during 2003.

Performance Graph

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(13). Since June 1999, the Class A Voting Common Stock and the Class C
Non-Voting Common Stock have traded on the NYSE(14). 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.

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,
1998 to December 31, 2003. The graph assumes that $100 was invested on December
31, 1998 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.

__________________________
13 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.
14 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.

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

1998 100 100 100 100
1999 156 93 127 109
2000 189 106 161 110
2001 327 167 138 99
2002 248 116 106 79
2003 258 129 149 102

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, 2003, the Audit
Committee, which is composed of Messrs. DeBriyn (Chairman), Brack, Klippenstein
and Raines, met fifteen 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, 2004.
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 for 2002 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 2004. 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 $260,700 and $135,000
for professional services rendered for the audit of Farmer Mac's annual
financial statements, the reviews of the financial statements included in Farmer
Mac's quarterly reports on Form 10-Q and the issuance of comfort letters in
connection with certain debt issuances for 2003 and 2002, respectively.

Audit-Related Fees

Deloitte & Touche LLP billed Farmer Mac an aggregate $257,090 and $262,000
for assurance and related services that were reasonably related to the
performance of 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 2003 and 2002, respectively, and are not reported in "Audit
Fees". These services were for various accounting consultations and other
technical issues.

Tax Fees

Deloitte & Touche LLP billed Farmer Mac an aggregate $20,900 and $20,900
for professional services rendered for tax compliance, tax advice and tax
planning for 2003 and 2002, respectively. These services were for the
preparation of Farmer Mac's federal tax return.

All Other Fees

Deloitte & Touche LLP did not bill Farmer Mac for any other fees in 2002 or
2003 other than the audit and review fees, audit-related fees and tax fees
referred to above.

Audit Committee Pre-Approval Policies

Pursuant to the committee charter adopted in February 2004, the Audit
Committee considers and pre-approves, as appropriate, all auditing and
permissible non-auditing services provided Farmer Mac's independent auditor. All
of the services provided by Deloitte & Touche LLP in 2003 were pre-approved by
the Audit Committee. None of the services provided by Deloitte & Touche LLP in
2002 other than the audit and review fees were pre-approved by the Audit
Committee. Such fees were not subject to the pre-approval provisions of 17
C.F.R. 210.2-01(c)(7)(i).

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 2003. A Form 4 was not filed by W.
David Hemingway, a director elected by Class A Holders who is not a nominee for
re-election, with respect to one transaction that occurred in June 2003. Mr.
Hemingway reported that transaction, which involved the sale of 5,000 shares of
Farmer Mac Class C Non-Voting Common Stock, on a Form 5 in February 2004.

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(15) 84,024 shares of Class B 5.49% 16.79%
1401 Hampton Street Voting Common Stock
Columbia, SC 29202

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

CoBank, ACB 62,980 shares of Class B 4.11% 12.59%
5500 South Quebec Street Voting Common Stock
Greenwood Village, CO 80111

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

U.S. AgBank, FCB 100,273 shares of Class B 6.55% 20.04%
245 North Waco Voting Common Stock
Wichita, KS 67201

Zions First National Bank(16) 322,100 shares of Class A 21.04% 31.25%
One South Main Street 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.
15 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.
16 W. David Hemingway, currently a member of the Board of Directors and not
a nominee for re-election, 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 Shareholder 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 Shareholder
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, 2003, 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 21, 2004
Washington, D.C.

Appendix A

FEDERAL AGRICULTURAL MORTGAGE CORPORATION
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS, JUNE 3, 2004

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 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 3, 2004, 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
[ ] Dennis E. Everson
[ ] WITHHOLD AUTHORITY [ ] Mitchell A. Johnson
FOR ALL NOMINEES [ ] Timothy F. Kenny
[ ] Charles E. Kruse

[ ] 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, 2004.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

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

--------------------------------------------------------------------------------
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. [ ]
--------------------------------------------------------------------------------

Signature of Stockholder___________________________________ Date ____________

Note: Please sign exactly as the name or names appear on this Proxy. 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 3, 2004

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 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 3, 2004, 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]

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

2. Proposal to approve the appointment of Deloitte & Touche LLP as independent
auditors for the Corporation for the fiscal year ending December 31, 2004.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

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

Signature of Stockholder___________________________________ Date ____________