pending regulations cannot make this claim in conjunction with financing an industrial term loan. Our understanding of the purpose for which the FmHA Business and Industry Program was established is to encourage the development of economic activity in rural areas. We strongly urge that the regulation and administration of the Program be structured and conducted to allow the best qualified lenders to lead and service individual loans, regardless of the means by which that lender is chartered to conduct its business. Similarly, we believe that individual loans should be reviewed with the thought of maximizing the effectiveness of each loan dollar in generating economic and social benefit, rather than by the size of the requested guarantee. We appreciate your consideration of these comments, and hope that they may be of some aid in your deliberations. Subcommittee on Conservation, U.S. House of Representatives STATEMENT CHARLES L. FRAZIER NATIONAL FARMERS ORGANIZATION February 14, 1983 EMERGENCY AGRICULTURAL CREDIT ACT OF 1983 Mr. Chairman, we appreciate this opportunity to express our strong support for the Emergency Agricultural Credit Act of 1983. We commend you for taking the initiative in proposing an emergency response to the current farm credit crisis and in pushing for early Congressional action. We also want to commend Congressman Tom Coleman for joining as original cosponsor and making this a bipartisan effort. We want to emphasize, first of all, that the farm credit situation is urgent. This bill must be enacted within a few weeks if it is to be of help to hard-pressed farmers unable to arrange the credit they need to operate another year. It is difficult for most farmers, and impossible for many, to get financing to put in another crop. The Department of Agriculture estimated last October that only five percent of the nation's farmers were financially vulnerable and that only two percent had quit farming during the current recession. It said that every effort was being made by the Farmers Home Administration and other agricultural lenders to provide debt assistance and loan supervision. Responsible Department personnel have acknowledged, however, that there is an additional block of FmHA borrowers who are going out of farming through voluntary close-outs because they are financially strapped and without available credit. It is commonly agreed by a number of authorities that nearly one third of all farmers are in financial difficulty today. The reports from our members at a series of regional meetings this winter provide plenty of evidence that the income situation in agriculture remains critical. Three years of declining farm income have eroded land and equipment values and pushed farm debt above $200 billion. Emergency credit assistance is needed, and needed now, to help financially-strapped farmers hold out until the farm economy can be turned around. We are familiar with the guidelines issued last October 8 for handling delinquent and problem farmer program loans in FY 1983. These guidelines, issued to FmHA personnel at all levels, stated that the Administration is committed to make every effort feasible to help financially-pressed borrowers overcome their difficulties. The guidelines set criteria for continued assistance to delinquent and problem borrowers and provide for rescheduling, reamortizing, and deferring borrower loans when such actions would improve their chance for success. These guidlines state the Administration's intention to protect borrowers who are reliable and who are trying to pay their bills. The implementation of these guidelines in farm areas is producing a different result, however. The way they are being applied at the county level too often is inconsistent with their stated intent. The reports we receive indicate that county supervisors seem to be under some pressure to treat borrowers the way a regular banker would and to give them as little information as possible about their right to appeal local decisions. This approach makes it particularly difficult for young farmers, who often have trouble lining up enough operating credit even when times are good. What we are experiencing is a lot of slippage between the good intentions expressed at the federal level and the way the federal guidelines are applied at the county level. The obvious solution is to write the Administration policy outlined in the guidelines into the law. This would require local FmHA supervisors to grant deferrals, forego foreclosures, and cease the informal pressure for voluntary liquidation for farmers who exercise good management practices. This would provide relief for those who are temporarily unable to make principal and interest payments due to circumstances beyond their control, and have a reasonable chance of repayment after the deferral period ends. This legislation guarantees that this approach will be carried out locally on an individual, case-by-case basis. It sets out specific criteria without imposing a blanket moratorium on foreclosures. We feel this is a fair and reasonable approach and urge you to recommend it for passage. We also urge you to recommend the provision that would reactivate the Emergency Agricultural Credit Adjustment Act of 1978 by extending the economic emergency loan program through FY 1984 and making it mandatory. The Administration's refusal to implement this emergency program at a time when farmers face their worst credit crisis in many years is deplorable. We endorse the provision providing $600 million in direct loans and $600 million in guaranteed loans. Providing this lending authority is not enough, however. It is essential to make this program mandatory to guarantee that the credit authorized will actually be made available. It is time for Congress to take whatever action is necessary to require the Farmers Home Administration to carry out the credit role it was designed to fill. We support the entire package of credit provisions included in H.R. 1190. We are convinced that it will enable the Farmers Home Administration to respond much more fully to the credit crisis facing farmers. We urge you to do everything you can to push this emergency bill through as past as possible. Renewable FUCK Renewable Fuels Association David E. Hallberg The Honorable Ed Jones Chairman, Subcommittee on Conservation, Committee on Agriculture House of Representatives 1301 Longworth House Office Building Dear Mr. Chairman: This is to advise you of the renewable fuels industry's support for statu- In large part due to the farsighted support and stimulative programs from As a fledgling industry, however, there is need of cost-effective federal Once again, Mr. Chairman, we thank you for your past support of the fuel ethanol industry, and urge your Committee's adoption of the aforementioned changes. |