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June 1, 2001

Farm loan delinquency rates decline

While Farm Service Agency loan volume has increased more than 65 percent in recent years, delinquency rates have fallen sharply, according to Carolyn Cooksie, FSA deputy administrator for Farm Loan Programs. Cooksie testified recently before the Senate Agriculture, Nutrition, and Forestry Committee.

"I am pleased to report that the FSA farm loan portfolio is showing its best performance in many years," Cooksie said. "One of the best indicators of program performance comes not from internal statistics, but from the General Accounting Office. In January of this year, the GAO announced that the FSA farm loan programs were removed from that agency's list of designated high-risk federal programs. The FSA farm loan programs, and predecessor agency Farmers Home Administration farmer programs, had been designated as high-risk by the GAO for over 10 years."

According to Cooksie, of the almost 96,000 borrowers owing $9.5 billion in the direct loan portfolio, direct loan delinquency is the lowest in 20 years at 12.3 percent. In addition, the direct loan loss rate is the lowest since 1987, and progress has been made in reducing the number of delinquent million dollar-plus direct loan accounts.

Cooksie said the guaranteed loan portfolio, consisting of more than 40,000 borrowers owing $8.3 billion, delinquency is at an all-time low of 1.83 percent, and dollar losses have remained low despite continuing growth of the portfolio.

Cooksie attributed the turn-around to several factors including changes in the 1996 farm bill that created strong incentives for producers to repay loans.

"The 1996 farm bill included provisions which instituted prohibitions on further FSA loan assistance to borrowers who are delinquent or who have received debt forgiveness, and a one-time, $300,000 limit on debt forgiveness," Cooksie said. "These limitations have caused FSA borrowers to more carefully consider the consequences of failure to repay their FSA loans."

Cooksie outlined several new issues for consideration, especially highlighting the need to find better ways to assist beginning farmers and ranchers.

ITC: investigate lumber imports

The U.S. International Trade Commission (ITC), in a recent preliminary ruling, confirmed that imports of softwood lumber from Canada are causing injury to U.S. producers.

This ruling paves the way for the Department of Commerce to officially launch antidumping and count-ervailing duty investigations on Canadian softwood lumber exports to the United States. These investigations are in a response to a petition filed April 2 by the U.S. timber producing industry following the expiration of the U.S.-Canada Softwood Lumber Agreement on March 31, 2001.

Commerce is expected to issue a preliminary subsidy ruling on the countervailing duty case on June 26 and a preliminary ruling on the antidumping case on Sept. 10, 2001.

The American Farm Bureau Federation supports both the antidumping and countervailing duty investigations now underway.

Conrad urges Senate action on farm bill

In a recent letter to Senate Agriculture Committee Chairman Richard Lugar (R-Ind.), Sen. Kent Conrad (D-S.D.) encouraged timely action on the 2001 crop year emergency farm relief as well as reauthorization of the farm bill. Conrad said he was afraid the $79 billion in additional resources for agriculture adopted in the budget resolution for fiscal year 2002 might "evaporate" if the committee did not act.

"The increase for agriculture included in the Budget Resolution properly recognizes that continued widespread hardship in the farming sector demands both policy changes and additional resources," Conrad stated. "Yet, the committee on Agriculture, Nutrition and Forestry must act in order to secure the additional money. I am therefore writing to urge that you announce a schedule for the committee to proceed with the prompt approval of emergency agricultural legislation for crop year 2001, followed by consideration of a comprehensive new farm bill. We have a real chance to bring needed changes to farm policy, but that opportunity may prove fleeting."

AFBF moves up on 'Power 25'

The American Farm Bureau Federation, ranked 21st in 1999, is considered by Fortune magazine to be the 15th most powerful association in Washington, D.C. The May 28 issue of the magazine includes Fortune's "Power 25."

The Power 25 has a new No.1. For the first time in four years, the National Rifle Association has replaced the American Association of Retired Persons at the top of the list.

Completing the list of the top five groups in the nation's capital is the National Federation of Independent Business (No. 3), the American Israel Public Affairs Committee (No. 4), and the Association of Trial Lawyers (No. 5).

Notable Quotables

"Extinction of species is not an acceptable outcome, but neither are policies that cause economic hardship or burden private landowners unfairly. The fact that we have recovered and delisted just nine U.S. species since the ESA was passed is not a testament to its success. When you take into account the hundreds of millions of dollars the U.S. spends each year in threatened and endangered species protections, something is clearly wrong with this picture."

—Rep. Mike Crapo (R-Idaho), chairman of the Senate Environment and Public Works Subcommittee on Fisheries, Wildlife and Water, said at a recent hearing that while a strong endangered species act is important, it is in need of reform. The hearing examined the listing and delisting processes under the Endangered Species Act.