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46–169 PDF 2009

S. HRG. 110–747 

NOMINATION HEARING TO 

THE FARM CREDIT ADMINISTRATION 

HEARING 

BEFORE THE

COMMITTEE ON AGRICULTURE, 

NUTRITION, AND FORESTRY 

UNITED STATES SENATE 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

SEPTEMBER 24, 2008 

Printed for the use of the 

Committee on Agriculture, Nutrition, and Forestry 

( 

Available via the World Wide Web: http://www.agriculture.senate.gov 

COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY 

TOM HARKIN, Iowa, Chairman 

PATRICK J. LEAHY, Vermont 

KENT CONRAD, North Dakota 

MAX BAUCUS, Montana 

BLANCHE L. LINCOLN, Arkansas 

DEBBIE A. STABENOW, Michigan 

E. BENJAMIN NELSON, Nebraska 

KEN SALAZAR, Colorado 

SHERROD BROWN, Ohio 

ROBERT P. CASEY, Jr., Pennsylvania 

AMY KLOBUCHAR, Minnesota 

SAXBY CHAMBLISS, Georgia 

RICHARD G. LUGAR, Indiana 

THAD COCHRAN, Mississippi 

MITCH MCCONNELL, Kentucky 

PAT ROBERTS, Kansas 

LINDSEY GRAHAM, South Carolina 

NORM COLEMAN, Minnesota 

MICHEAL D. CRAPO, Idaho 

JOHN THUNE, South Dakota 

CHARLES E. GRASSLEY, Iowa 

MARK HALVERSON, Majority Staff Director 

JESSICA L. WILLIAMS, Chief Clerk 

MARTHA SCOTT POINDEXTER, Minority Staff Director 

VERNIE HUBERT, Minority General Counsel 

(II) 

(III) 

C O N T E N T S 

Page 

HEARING(S): 

Nomination Hearing to the Farm Credit Administration .................................... 1 

Wednesday, September 24, 2008 

STATEMENTS PRESENTED BY SENATORS 

Harkin, Hon. Tom, a U.S. Senator from the State of Iowa, Chairman, Committee on Agriculture, Nutrition, and Forestry ................................................. 1 

Cochran, Hon. Thad, a U.S. Senator from the State of Mississippi .................... 2 

Panel I 

Keenum, Mark Everett, of Mississippi, to a be Member of the Farm Credit 

Administration Board, Farm Credit Administration ........................................ 4 

APPENDIX 

PREPARED STATEMENTS: 

Grassley, Hon. Charles E. ................................................................................ 12 

Keenum, Mark Everett .................................................................................... 13 

DOCUMENT(S) SUBMITTED FOR THE RECORD: 

Committee questionnaire and Office of Government Ethics Executive 

Branch Personnel Public Financial Disclosure Report filed by Mark 

Everett Keenum ............................................................................................ 16 

Various organizations, letters of endorsement for Mark Everett Keenum .. 35 

QUESTION AND ANSWER: 

Grassley, Hon. Charles E. 

Written questions to Mark Everett Keenum .................................................. 41 

Keenum, Mark Everett 

Written response to questions from Hon. Charles E. Grassley .................... 42 

(1) 

NOMINATION HEARING TO 

THE FARM CREDIT ADMINISTRATION 

Wednesday, September 24, 2008 

U.S. SENATE, 

COMMITTEE ON AGRICULTURE, 

NUTRITION, AND FORESTRY, 

Washington, DC 

The Committee met, pursuant to notice, at 9:34 a.m., in room 

SR–328A, Russell Senate Office Building, Hon. Tom Harkin, Chairman of the Committee, presiding. 

Present: Senators Harkin, Chambliss, and Cochran. 

STATEMENT OF HON. TOM HARKIN, U.S. SENATOR FROM THE 

STATE OF IOWA, CHAIRMAN, COMMITTEE ON AGRICULTURE, 

NUTRITION, AND FORESTRY 

Chairman HARKIN. The Senate Committee on Agriculture, Nutrition, and Forestry will come to order. 

Today we are here to conduct a hearing on the nomination of Mr. 

Mark Keenum to the Board of Directors of the Farm Credit Administration. Mr. Keenum is a native of Mississippi and has a long history of service to agriculture and Government, and, of course, we 

all know him as legislative assistant and later chief of staff to Senator Cochran. 

The Farm Credit Administration is responsible for regulating 

and examining the banks, associations, and related entities of the 

Farm Credit System and the Federal Agricultural Mortgage Corporation, Farmer Mac. In 2007, the Farm Credit System held about 

34 percent of the farm sector’s total debt. Farmer Mac serves as a 

secondary market for agricultural loans. FCA must ensure that the 

Farm Credit System fulfills its mission to provide a dependable 

source of credit for agriculture in rural America. 

The Farm Credit System and Farmer Mac were chartered by 

Congress as Government-sponsored enterprises, GSEs. With the 

news on September 7th that the Federal Housing Finance Agency 

established a conservatorship for Fannie Mae and Freddie Mac, 

two other GSEs, the regulation of these enterprises assumes 

heightened interest. Despite the problems associated with residential real estate loans, agricultural mortgages and agricultural loans 

remain strong. Recently Standard and Poor’s applied the best possible credit rating on the consolidated debt obligations issued by 

the Farm Credit System. We can all be grateful that at this point 

the agricultural sector seems to be thriving despite the turmoil in 

the rest of the U.S. financial sector. 

2 

The availability of stable, sufficient, and long-term affordable 

credit remains an important issue to the members of this Committee and to American agriculture. This Committee has the responsibility to consider the qualifications of individuals nominated 

to oversee the financial status of the Farm Credit System and 

Farmer Mac. And we do not take this responsibility lightly. 

I have several letters of support from various agricultural organizations in support of Mr. Keenum’s nomination which I will submit 

now for the record. And as Chairman, I welcome Mr. Keenum to 

the Committee. 

At this point I would yield to the distinguished Senator from 

Mississippi—former Chairman of this Committee, I might add for 

purposes of a statement and introduction. 

STATEMENT OF HON. THAD COCHRAN, U.S. SENATOR FROM 

THE STATE OF MISSISSIPPI 

Senator COCHRAN. Thank you very much, Mr. Chairman, and 

thank you for convening this hearing as you have this morning to 

review the nomination of Dr. Mark Keenum. He has been nominated by the President to serve as a member of the Farm Credit 

Administration Board. He is Under Secretary of Agriculture at the 

present time, and we have known him for a long time. He first 

came to Washington from Mississippi State University to serve as 

a legislative assistant for me, with special responsibilities for agriculture issues and related legislative responsibilities. He immediately establish himself as someone who was competent, dependable, well liked by others, members of the staff of other Senators 

and Senator themselves. 

He at some point became more involved in my office in terms of 

administration and standing in for me when I could not be at 

events. And he became my chief of staff, and he served with great 

distinction in that capacity. 

The President nominated him and he was confirmed as Under 

Secretary of Agriculture in 2006. He began his service in December 

of that year. His responsibilities include the Risk Management 

Agency, administration of the Foreign Agricultural Service. He has 

shown great ability in all of these jobs to work with people and to 

do the right thing, to be honest and trustworthy. I do not know of 

anybody who dislikes him, and everybody respects him. 

So I think we will be very fortunate to have him in this position, 

and I wholeheartedly recommend him to the Committee and congratulate him on this nomination. 

Chairman HARKIN. Thank you, Senator Cochran. 

And now we will hear from the distinguished Ranking Member, 

Senator Chambliss. 

Senator CHAMBLISS. Thank you, Mr. Chairman, and likewise, 

thank you for holding this hearing or Dr. Keenum’s nomination to 

be a member of the Board of Directors for the Farm Credit Administration. 

As the independent regulator of the Farm Credit System, the 

Farm Credit Administration plays an important role in ensuring 

the delivery of safe, sound, and dependable credit and related services to farmers and ranchers in rural America. The credit crisis 

that is affecting many financial institutions and national and interVerDate Aug 31 2005 13:07 Mar 23, 2009 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 C:\DOCS\46169.TXT SAG2 PsN: SAG2
3 

national markets may challenge the Farm Credit Administration. 

I believe the agency is up to any challenge the markets may throw 

its way today or in the future. 

Dr. Keenum, I appreciate very much that you are willing to step 

into this potentially challenging situation and continue your service 

to America’s farmers and ranchers. If you are confirmed to the 

Board of the Farm Credit Administration—and I hope you will be 

soon—I encourage you to continue to focus the agency and the 

Farm Credit System on fulfilling its mission in a safe and sound 

manner. You have lived your life in agriculture, and that has 

served you well in your positions on the farm, the Land Grant University System, the U.S. Senate and at the U.S. Department of Agriculture. 

As you will recall, this Committee reviewed your nomination to 

be Under Secretary of Agriculture for Farm and Foreign Agricultural Services in December 2006. The Senate made the right decision in confirming your nomination. As Under Secretary, you have 

served the President well. I also appreciate your understanding of 

and work with this Committee. 

And let me just say from a very personal perspective, I have 

known Mark Keenum since before I came to the U.S. House of Representatives. He was on Senator Cochran’s staff, and I can remember him coming to Georgia with Senator Coverdell and Senator 

Cochran. And having a chance to visit with Mark back then, I had 

the utmost respect for him. His knowledge of agriculture is unsurpassed by anybody. But most significantly—and this is a little bit 

parochial—his understanding of Southern agriculture is very 

unique and truly is unsurpassed by anybody else. They do not grow 

a lot of peanuts over in Mississippi, but he was always understanding, knowledgeable, and a great friend to the peanut industry. 

Otherwise, we share an awful lot of crops in common, and having 

somebody that you could go to on the Senate side when I was in 

the House and now at USDA from a parochial perspective, as the 

Chairman knows and Senator Cochran knows, is just so valuable. 

Mark, you made a commitment to public service, and I admire 

you for it. I know your family well, and I just commend you and 

your family for the sacrifice that you have made in serving the 

United States of America and in serving agriculture. And I could 

not be happier about commending for the nomination to the Farm 

Credit Board. You are going to do a great job there, just like you 

have done serving Senator Cochran and just like you have done 

serving this Committee and just like you have done serving USDA. 

So thank you for your commitment, thank you for your service, 

and I look forward to hearing from you this morning. 

Mr. KEENUM. Thank you. 

Chairman HARKIN. Mr. Keenum, we require all nominees to testify under oath. Would you please stand and raise your right hand? 

Do you swear or affirm that the testimony you are about to provide 

is the truth, the whole truth, and nothing but the truth, so help 

you God? 

Mr. KEENUM. I do. 

Chairman HARKIN. Thank you very much. 

4 

Now I have one other question that I have to ask. Do you agree 

that, if confirmed, you will appear before any duly constituted 

Committee of Congress if asked to appear? 

Mr. KEENUM. Yes, Mr. Chairman. 

Chairman HARKIN. Thank you very much, Mr. Keenum, and, 

again, welcome to you. And I am told that your wife, Rhonda, is 

here with you also. 

Mr. KEENUM. Yes, sir, she is. 

Chairman HARKIN. We welcome her also to the Committee, and 

my notes tell me you have four children, but they are not here. 

Mr. KEENUM. We left them at home to go to school today. We are 

blessed. We have 4–year-old triplets: Kathryn, Everett, Mary Phillips. And we have a 2–year-old daughter, Victoria. 

Chairman HARKIN. Wow. 

Mr. KEENUM. So we are very blessed. 

Chairman HARKIN. That is a blessing. My goodness. Well, again, 

welcome to the Committee. We have your statement. It will be 

made a part of the record in its entirety and please proceed as you 

so desire. 

STATEMENT OF MARK EVERETT KEENUM, OF MISSISSIPPI, TO 

BE MEMBER, FARM CREDIT ADMINISTRATION BOARD, FARM 

CREDIT ADMINISTRATION 

Mr. KEENUM. Well, thank you, Mr. Chairman, Senator 

Chambliss, Senator Cochran, distinguished members of the Committee. I am both honored and humbled to appear before you today 

for consideration for the position of Board Member for the Farm 

Credit Administration. I especially want to thank Senator Thad 

Cochran for his gracious introduction. 

As mentioned, I had the privilege of serving Senator Cochran on 

his staff for over 17 years. In fact, I spent many hours in this very 

room participating in staff deliberations, Committee hearings, and 

mark-ups addressing numerous issues important to American agriculture. 

For over a decade, I had the honor of serving as chief of staff to 

Senator Thad Cochran, and I am proud to call him my mentor and 

my friend. 

I am currently serving, as mentioned, as the Under Secretary for 

Farm and Foreign Agricultural Services of the Department of Agriculture—a role in which I oversee three agencies: the Farm Service 

Agency, the Risk Management Agency, and the Foreign Agricultural Service. This mission area has a total operating budget of approximately $1.7 billion and employs over 16,000 people with more 

than 2,300 offices nationwide and 98 locations around the globe. 

The Farm and Foreign Agricultural Services helps to ensure the 

well-being of American agriculture and the American public 

through efficient and equitable administration of agricultural commodity, conservation, risk management, emergency assistance, food 

assistance, and farm credit programs. 

Mr. Chairman, I was born in Starkville, Mississippi, while my father was a student studying agriculture at Mississippi State University. Early in his professional life, my father went to work for 

the U.S. Department of Agriculture. He has since retired, after 

over 30 years with the Natural Resources Conservation Service. 

5 

But he remains committed to his small family farm in Humphreys 

County, Mississippi, where my mother serves as the county’s head 

librarian. My paternal grandfather also worked for USDA with the 

Soil and Water Conservation Service, and he, too, owned a small 

farm in the Mississippi Delta. 

So I have grown up in and around agriculture all my life. My experiences span from working as a farm laborer, a crop scout, an agricultural extension specialist, an agricultural research associate, 

an agricultural economics professor, and a Senate staff member, to 

serving as an Under Secretary of Agriculture. 

During my career, I have learned a great deal about the complex 

nature of agricultural production that farmers face today. U.S. 

farmers and ranchers are the most efficient and resilient producers 

in the world. Our Nation’s Farm Credit System has a mandate to 

be a dependable lender to agriculture and rural America. It has a 

key role to play in ensuring that U.S. farmers are able to meet the 

challenges of producing a bountiful supply of safe and affordable 

food and fiber products. 

Mr. Chairman, net farm income in 2008 is projected to be up $9 

billion from last year to an all-time record $96 billion. Net cash 

farm income is projected to reach a record $101 billion in 2008, and 

that is up $14 billion from 2007. Overall, the balance sheet of the 

U.S. agriculture sector remains historically strong with the value 

of assets increasing at a faster pace than farm debt. In fact, the 

debt-to-asset ratio is forecast to decline to a historic low of only 9 

percent this year. 

While today our farm economy is strong, I am mindful of ongoing 

concerns within the overall agricultural sector. Total production expenses are projected to increase by a record $40 billion, or a 16– 

percent increase, this year to $295 billion. And that is following an 

increase of over $20 billion in farm expenses last year, and that 

was a 9–percent increase from that previous year. So higher production expenses over the past 2 years have increased the cost 

structure of crop and livestock producers. 

According to USDA analysts, for livestock producers prices must 

increase to offset the increases in feed costs. For most row crops, 

prices can retreat somewhat from the current levels, but must hold 

at historically high levels to offset the increase in production expenses. So going forward, agricultural producers face increasing 

risk of a squeeze in their cash-flows due to the volatility of commodity prices and the rising costs for land rent, land ownership, 

and production inputs. If commodity prices were to decline to anywhere near historic levels, debt repayment capacity would be seriously affected and the System’s credit risks would increase. 

Recent surveys indicate that farm land values have been increasing in most parts of the country at double-digit rates. The risk of 

a bust in farmland prices, a possibility if commodity prices were to 

decline sharply, is a continuing concern for agricultural lenders. 

Mr. Chairman, I would be remiss if I did not acknowledge the 

current crisis in our Nation’s financial markets and the urgency in 

which you—and all of our Nation’s leaders—are working to address 

the current financial environment. You have my word that, if confirmed, I will do everything in my power to work with you to enVerDate Aug 31 2005 13:07 Mar 23, 2009 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 C:\DOCS\46169.TXT SAG2 PsN: SAG2
6 

sure the efficacy and transparency of the Farm Credit Administration. 

Mr. Chairman and distinguished members, I have spent the 

greater part of my career working within the Senate family and, 

therefore, I have a keen appreciation for the unique nature of the 

legislative process. During my tenure, I have especially recognized 

the importance and the benefits of pursuing solutions in a bipartisan manner. With the turmoil our Nation is currently facing in 

the financial markets coupled with the historic uncertainties of the 

agricultural economy, it is more imperative today than ever to ensure that the Farm Credit Administration continues its diligence of 

a strong surveillance system in its regulatory and examination activities to monitor and address these challenges, while ensuring the 

overall safety and soundness of the Farm Credit System. If confirmed, I can pledge to this Committee that I will fully dedicate 

myself to the broad mission of this important office and that I will 

commit to be accessible to all members and staff. 

Again, Mr. Chairman, Senator Chambliss, Senator Cochran, and 

distinguished members of the Committee, I want to thank you for 

allowing me to appear before you today, and I would welcome any 

questions or comments. 

Thank you. 

[The prepared statement of Mr. Keenum can be found on page 

13 in the appendix.] 

Chairman HARKIN. Thank you very much, Dr. Keenum. I join my 

colleagues in thanking for your long service, first to the Senate and 

then in the Department of Agriculture. We have all had the pleasure of working with you many times over the past. We are not 

strangers at all. 

Mr. KEENUM. No, sir. 

Chairman HARKIN. And, again, I just want to thank you very 

much on a bipartisan note for all of your great work here, both 

here and at the Department. Thank you for your work down there, 

too. 

I really only have one question, Mark, and it has to do with the 

future. Over the next two decades, it is estimated that 400 million 

acres of agricultural land will be transferred to new owners. The 

future health of agriculture depends on policies to encourage a new 

generation of farmers and ranchers to work in agriculture. With 

rising costs of land, which you pointed out in your testimony, 

equipment, and energy inputs, young and beginning farmers need 

access to adequate credit. 

So my question is: How do you foresee the Farm Credit Administration—how can they facilitate lending to serve the future needs 

of the next generation, the young farmers, the beginning farmers 

and ranchers who need access to that credit to get established? 

Mr. KEENUM. I think you are exactly right, Mr. Chairman. The 

future of agriculture as we know it today is going to through and 

will go through some very significant transitions. I think when you 

look at the average age of the American farmer today, it is in the 

upper 50’s, and as I mentioned, our farmers are the most resilient, 

efficient producers in the world. But they are getting older, and 

there has to be a transition to a new generation of farmers. Who 

is going to take up the plow and go out and work the fields to proVerDate Aug 31 2005 13:07 Mar 23, 2009 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 C:\DOCS\46169.TXT SAG2 PsN: SAG2
7 

vide this bountiful supply of food and fiber that we so readily take 

for granted? 

I think it is important, it is incumbent upon all lenders to look 

to the future and, where we can, help this next generation be able 

to be competitive. With high land prices and high rents, it is somewhat daunting for someone, some young person today to be able to 

get into farming because of the overwhelming expenses that they 

will have to incur just in equipment and all these challenges. 

And I was pleased, I was very pleased that in the farm bill there 

were more incentives provided for USDA, for us to provide incentives for beginning farmers, socially disadvantaged farmers as well. 

And I know that in looking at materials that I have reviewed preparing for this hearing, the Farm Credit Administration, also has 

incentives and directives to all systems, all the Farm Credit System lenders to focus on loans for beginning farmers. And I think 

that if we are going to have a future in agriculture, we have got 

to do that. 

So I would commit to do everything in my power to make sure 

that we have mechanisms, that we have programs to promote readily available credit for our young and beginning farmers. 

Chairman HARKIN. Of course, since I was a kid, it has always 

been a problem for young people to get involved in agriculture. 

Mr. KEENUM. It is. 

Chairman HARKIN. But all the time in the past that I was growing up in rural Iowa, for a young person to get into farming, there 

were certain stairsteps they could take. You could rent a little bit 

of land. You could get into hogs, and that was always sort of our 

entree point because it provided for a good cash-flow, maybe some 

other livestock, calves maybe in the grassier parts of our State. But 

there were those opportunities that allowed a young person to get 

started, then be able to buy a little bit of land and buildup equity. 

That is no longer possible. The hogs are now concentrated in big 

feed lots, and this is no longer very efficient for young farmers to 

do that. So it is becoming—it is harder now, at least I perceive 

that. And you are the economist, not me. It is just harder for a 

young person unless they have a family that owns land. 

Mr. KEENUM. Right. 

Chairman HARKIN. They get into it to begin farming. 

There is, however, in some parts of the country, and beginning 

more in mine, some niche things that younger farmers are doing 

that maybe are taking the place of what we used to do with hogs 

before, enable them to buildup some equity, and that is in the area 

of organics. We are finding more and more in Iowa some smaller 

farmers that are doing some organics, and they are getting, obviously, you know, a high price for it. 

Mr. KEENUM. A premium. 

Chairman HARKIN. A premium price for it, and that is allowing 

them then to get into more kinds of agriculture as we know it, row 

crop agriculture, things like that. And they are setting aside a little 

bit, doing a little bit of that. They are doing some organic chickens 

and some pork. Actually, some small producers there are doing 

that and other things. And I perceive that is happening in some 

other areas of the country, too. And I am just wondering if the 

Farm Credit Administration has a role to play in that area. 

8 

Mr. KEENUM. I would absolutely hope so. And I think, as I mentioned, that providing opportunities to credit is key. If you do not 

have the resources to be able to invest in either the land or the 

equipment, you are not going to be able to begin a farming operation. So there may be somewhat of a function of risk that the 

Farm Credit System may have to take with certain borrowers. 

And there are provisions that you could look at for maybe having 

even lower interest rates for individual farmers who are beginning 

or who are a certain age or who fit into certain categories to try 

to help provide some assets so they can begin their operation. I 

think you are right. Niche farming, organic farming, is becoming 

more and more popular. The demand is there. 

Chairman HARKIN. The demand is there, yes. 

Mr. KEENUM. And it is going to continue to be over the next, as 

you mentioned, couple of decades. I think American consumers are 

going to be demanding even more of these type products. And so 

there are opportunities, I think, for beginning farmers. 

It is a challenge. Again, I will do everything in my power to see 

what opportunities, to ask these kind of questions of the staff and 

colleagues on the Board. What can we do? What can we do working 

with the Department of Agriculture through their guaranteed loan 

programs, both farm ownership, guaranteed loan programs, and operating loans that we provide at USDA. What opportunities are 

there in teaming up with the Department of Agriculture through 

our Farm Credit System. 

Chairman HARKIN. Very good. Thank you very much, Dr. 

Keenum. 

Senator Chambliss. 

Senator CHAMBLISS. Thank you, Mr. Chairman. 

Let me apologize to Rhonda back there. Rhonda, you were sitting 

right behind him, and I could not see you earlier. But, needless to 

say, we are pleased to see you here this morning. 

She has got this big smile. I do not know whether it has anything to do with not having those young four with her or not this 

morning. But she is a great partner for Mark in his public service. 

Mr. KEENUM. She is that. 

Senator CHAMBLISS. Mark, I just have one thought with respect 

to where we are today. Obviously, this financial crisis we are in has 

not necessarily touched or involved the Farm Credit Service at this 

point in time, but really it has in respect to the fact that all of the 

financial markets are going to be under close scrutiny. 

Mr. KEENUM. Absolutely. 

Senator CHAMBLISS. We have been through some difficulties with 

the Farm Credit Administration in years past. I hope the fact that 

we are not seeing subprime loans in the farming industry that we 

learned our lesson. And I think perhaps we did. 

But as we move ahead, there is a critical portion of the current 

crisis or critical aspect of the current crisis that I think is being 

questioned. It is something that I have a lot of questions about, 

and that is regulation. We conservatives seek to want to lessen regulation as much as we can and let the market work and be flexible 

and whatnot. But there are times, particularly in the financial 

market, when we need to have strong regulation. 

9 

There are times, also, when regulators can be too close to the 

folks that they are regulating, and there have been some accusations that the Farm Credit Administration is too close to the Farm 

Credit Service or to Farmer Mac. And I would just like your 

thoughts on regulation as we move forward and your idea about 

how much oversight there needs to be with respect to the retail 

side of the Farm Credit Administration. 

Mr. KEENUM. Well, obviously, the key role of the Farm Credit 

Administration is to provide that regulatory oversight, that surveillance and monitoring. I think over three-quarters of all their resources go just to that activity alone of surveillance and monitoring 

and regulatory oversight. 

Right now the Farm Credit System is very healthy. Their loan 

portfolios are very large. Farmers are making money. They are 

paying their loans. And as a result, the Farm Credit System is 

making a record level of profits for the system to the tune of $1.5 

billion just through the first half of this year alone. It is a record 

pace. 

So things are going well right now, but you never know when 

commodity prices may come back down, land values may come back 

down. Are we too far extended in some loans that are out there 

that may go under? The Farm Credit System is tied to the overall 

health and well-being of this economy. Eighty percent of all the 

farm families in this country rely on off-farm income for their family income. And so if someone in a family loses a job because of the 

downturn in our national economy, that can severely affect their 

ability to honor and pay off their farm bills. 

So it is all interconnected. I think it is more important probably 

now than ever, as I mentioned, for the Farm Credit Administration 

to be as diligent and resilient in its responsibilities and duties and 

making sure that we maintain a healthy farm credit lending system, that we do not see situations occur in farm credit that we 

have seen in other parts of our economy. 

That is the role of this agency, to provide that regulatory oversight. I will commit that, if I am confirmed, I will do everything 

in my power to make sure that we maintain a very healthy Farm 

Credit System. I will ask the tough questions of our senior staff, 

of the examiners: Are they doing the job to make sure that capital 

requirements as stipulated in the statute are being made, that our 

farm lending institutions are not getting too heavily invested in 

certain areas of the economy, that there is more diversity in what 

they are doing in their business practices? 

It is important that we do this to preserve and protect the integrity of this Farm Credit System. And as I mentioned, I will base 

all decisions that ever come before me as a Board member on the 

facts, the facts as we can best ascertain, and understand what the 

consequences and the implications are based on those decisions. 

That is what I learned early on working here in this body, serving as a staff member, and that process has served me well 

throughout my career. 

That is a very good question, and that is how I think we would 

approach it. 

Senator CHAMBLISS. Just in closing, nobody can put their finger 

on the silver bullet that caused the current situation that we are 

10 

in on the other side of the financial markets, but it is pretty obvious that subprime loans are a major contributing factor. One thing 

we have seen in agriculture is the rising price of land all across 

America. In my part of the world, land that used to cost $1,000 an 

acre now is selling for as high as $4,000 or $5,000 an acre. And 

we have got to be very careful that we do not get caught in that 

same trap of making loans based upon the highest market value 

that has ever been seen in agriculture in parts of the country. 

Mr. KEENUM. Right. 

Senator CHAMBLISS. So I would just encourage you—our job from 

an oversight standpoint is obviously to look over your shoulder, and 

we have confidence in you and other members of that Board. But 

I would just caution you to make sure that we do not allow ourselves to get in that same trap that the subprime folks obviously 

have gotten this market into. 

Again, to you and Rhonda, thanks very much for your commitment. Thanks for your service. And we look forward to your service 

in this capacity. 

Mr. KEENUM. Thank you, Senator. 

Senator CHAMBLISS. Thank you, Mr. Chairman. 

Chairman HARKIN. Do you want to say anything, Senator Cochran. 

Senator COCHRAN. Mr. Chairman, I do not have any questions. 

I just want to congratulate Mark again on his selection to serve on 

this Board and wish him well as he undertakes his new responsibilities. 

Thank you. 

Mr. KEENUM. Thank you, Senator. 

Chairman HARKIN. Thank you very much. 

Any written questions for the record are due by 4 p.m. this afternoon so the nominee is able to provide answers quickly. 

And, with that, again, Mark, thanks for being here, and we will 

move this as rapidly as possible, as soon as we get a quorum. Now, 

we are having another hearing here at 10 o’clock with the Homeland Security and Governmental Affairs Committee, so it is a joint 

hearing between the two Committees. Hopefully we will get a 

quorum then. If we do not get a quorum, it would be my thought, 

in consultation with Senator Chambliss, that maybe we can pull 

the Committee together on a vote on the floor, or we can go in the 

President’s Room and report the nominee out, or something like 

that, hopefully get it today if there are votes today. I assume we 

will do something today on the floor. Would that be OK? 

Senator CHAMBLISS. Sure. 

Chairman HARKIN. All right. Thank you very much. With that, 

the hearing will be adjourned, and then we will be back in business 

here in a couple of minutes. 

Mr. KEENUM. Thank you, Mr. Chairman. 

Chairman HARKIN. Thank you, Mr. Keenum. 

[Whereupon, at 10:05 a.m., the Committee was adjourned.] 

(11) 

A P P E N D I X 

SEPTEMBER 24, 2008 

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