Date: 1987-09-21
Speaker: DE LA GARZA (democrat)
Chamber: H

Mr. Chairman. I yield myself 1 minute. Mr. Chairman. this is a very difficult situation we find ourselves in. We find ourselves in a very difficult situation. let me repeat. because the legislation is of such significance that we need it for. rural America. The plight of rural America is basically beyond their ability to control or even we in the Congress to control. We have been set to a standard of perfection that is- beyond mortals as we to reach. We do the best we can with the tools we have under the rules as best we- can and it has brought us to this point. I ask the Members to bear with us. to understand that. we do it witlL the best of intention. We try not to slight anyone. We try and do it. for that which all of us are insisting is- the ultimate aim that we have a strong viable rural America that will provide the food and fiber not only for us. but for many of our brothers around the world. Mr Chairman. today the- Committee- on Agriculture brings before the House. H.R: 3030. probably the most important legislation the committee has considered since the 1985 farm bill. H.R. 3030 is not only important to the Farm Credit. Systems. many. farmerborrowers across the Nation. but it is also needed for the health and stability of. our fl nancial. markets. Mr.. Chairman.. in sum. H.R. 3030. will:. Protect the stock and allocated. equities. of farmers. ranchers. and cooperatives. Expand the procedures for working with. financially distressed borrowers. Provide for the opportunity to achieve great. er efficiencies in System. operations. Provide a means for financial assistance as: necessary. Provide for more flexibility in System capitalization.. Place System loss sharing. on a more equitable basis. and Conform more closely the- Farm Credit Administratlns role to that of other Federal reg. ulators of financial institutions.. The bill was reported by the. committee on August. 28. 1987. after extensive hearings and! detailed consideration by- the full Committee during. 5 days of- markup sessions in July and August. While the evidence is. increasingly clear. that the 1985 farm bill is beginning to work to reverse the depression in- the U.S. agricultural production system. we also find that there still are residual problems in. the U.S. agricultural finance system left over fromearlier years. Agriculture was on- a rollercoaster ride in the 1970s and early 1980s. In the 1970s. farmers were encouraged to produce more and expand their operations. and farmland prices skyrocketed. Inthe 1980s. farmers suffered from a depression in commodity. prices. a withering of markets.. and a. crash in the value of their land. The end result of this. rollercoaster ride is that many farms are being foreclosed or being squeezed out of business by. heavy debt burdens. and farm lending has been brought to the point of crisis. To cite just a few statistics: Aggregate out standing farm loans grew from about. $80 billion in 1960 to $220 billion in the early 1980s. In the past 5 years. that aggregate loan amount has dropped to approximately $175 billion. Much of that disappearance of credit has been borne by farmers and their lenders in the form of foreclosures and writing off bad debt. For several years. the Committee on AgriP culture has been wrestling with. this growing credit crisis created by the pre1985 situation. In an attempt to stemthe tide. we secured enactment of remedial farm credit legislation both in 1985at the same time that we passed the 1985 farm billand again in 1986. Unfortunately. the continuing and worsening residual effects of the farm recession of the past several years have overwhelmed our stopgap efforts. Today there is some hope the situation is bottoming out: U.S. agriculture is beginning. to turn around. some of the. bad debt. from the 1970s and early 1980s has been painfully wrung out of the farm. economy. and farmland prices are stazbilizing. While we currently are facing the worst crisis in the history of the cooperative Farm Credit System. there is some reason to believe that we have the opportunity. with this bill. to put our Nations agricultural credit system back on its feet - That is why we urgently seek expeditious consideration and pasage of this legislation. The committee has done its level. best to provide solutions to the current problems and provide the framework for a future credit delivery system that. will be more competitive. more efficient. and more responsive to economic realities. This legislation has new safeguards that should help U.S. agriculture to avoid future situations similar to current circumstances. At the same time. the bill. to the greatest extent possible. is designed to keep good farmers on their land. The. worst part of- the current crisis in. agricultural. credit has been the human lossforeclosures. the devastation of rural communities. and even suicides. What our bill does. is provide a way for farmers and lenders to work together to get. them. selves out of the credit crisis. Mr. Chairman. I have: used: the word"crisis" several times in referring to the agricultural credit situation.. I do not use it lightly: Everyone who has followed. the situation is in agreement that the cooperatively owned Farm Credit System. which provides about onethird of. all! credit: to farmers. is on. the verge of insolvency. Foreclbsures and. failbres of smalltown agricultural banks- continue with little abatement. The "bad! farm operators who. through poor management. overextended themselves are long gone. The foreclosures now are devastating- good. solid farm operators whom we cannot affordito lose: Mr. Chairman. much has- been said about title III of the bill in the past few weeks. Title III will create a secondary. mortgage market for certain agricultural loans made. through Farm Credit System and nonFarm Credit System banks. The committee worked long and hard to this title to create a secondary market. mechanism that would be viable and yet not harm the system or expose the Federal Government to large potential losses. I believe we met our goal. notwithstanding the charges that have been made. by some.. It is important to note that when- the committee considered this issue. a special. ad hoc subcommittee on secondary markets was. appointed to make recommendations.. This. ad hoc subcommittee. composed of! Mr. JONES of Tennessee. Mr. STENHOLM. Mr. STALLNGS.