Needed Improvements Early in my statement I noted the Administration': commitment to address a particular provision of the 1996 Farm Bill which we believe needs fine-tuning. The lifetime prohibition on loans to those who have received debt forgiveness without exception is excessively harsh. We agree there should not be a "revolving-door" for people to continually have debts forgiven and immediately receive additional loans. However, eliminating any future possibility of a loan is excessive for those individuals who received debt forgiveness. Every lender we know of has a policy that allows people to re-establish creditworthiness by building a history of meeting their obligations and conducting their credit affairs in an acceptable manner. We look forward to working with you to develop a fair and responsible alternative to the current provision. Other Issues Mr. Chairman, there are three other issues I would like to briefly address related to the delivery of farm credit. FEDERAL/NON-FEDERAL EMPLOYEE INTERCHANGE ABILITY The USDA Reorganization Act of 1994 authorized the transfer of Federal employees to FSA to be used interchangeably with non-federal county office employees in USDA Service Centers. In an effort to maintain service nearly every State adopted an Ag Credit Team strategy for the delivery of farm loan programs. This Team approach pooled available personnel and automation resources in several locations within a State. Teams usually provide service to several counties, ranging from serving only 1 county to as many as 15 counties. Using this method of delivery, personnel in the field have had to adapt to different operational methods. This approach worked well for Fiscal Year 1996. In fact, nationally, the delinquency rate was reduced in the direct lending program and more loans were actually made in Fiscal Year 1996 than in Fiscal Year 1995. TRAINING To ensure that the training provided FSA employees develops effective Ag Credit Officers who will enhance program integrity, a revitalized, exhaustive national training program has been developed and a manual is currently being written. The target date for availability of the training manual is April 1. This program will ensure that trainees are given consistent direction in every State. It is anticipated that the program will provide over 300 new Ag Credit Officers from within FSA ranks over the next two years and provide County Executive Directors with sufficient knowledge to manage and support farm loan program delivery in every USDA service center in the country. FSA is also continuing to train employees with credit background on commodity and conservation programs. This training of all personnel will enable us to fully utilize all our staff for essential workload regardless of what area of responsibility the workload encompasses. Our goal is to create a participatory work environment that allows all employees to realize their full potential, and that increases in our overall productivity, without any waste of human resources. FSA has worked diligently to effectively address current circumstances in the farm loan program and has developed effective strategies for the future. An example of these strategies is our national delinquency training. We are confident that these efforts will be fruitful and our clients will reap the benefits of enhanced service at the local office. Foreclosure on Civil Rights Finally, last December the Secretary temporarily halted foreclosure sales on delinquent farm loans until a determination can be made on each case as to whether there is any evidence of discrimination or inconsistency in program delivery. These foreclosure sales will be delayed until the files have been reviewed for compliance with all program requirements as well as compliance with the Equal Credit Opportunity Act and USDA civil rights procedures and regulations. The sales will resume upon completion of the review on individual cases where the review plainly demonstrates that there are no issues regarding discrimination or inequitable treatment. The review is proceeding smoothly. Concluding Remarks Mr. Chairman, in closing, I want to re-emphasize the progress made since October 1, 1996. This has been an extremely difficult time for FSA employees. They have had all of their regular duties, plus reorganization, 1996 Farm Bill implementation, and Production Flexibility Contract sign-up to contend with. As I mentioned earlier, FSA processed a high volume of loans and helped many, many farmers this past year. I know that the members of the next panel have some concerns with our programs, and we want to hear those concerns, and address them. Our goal is constant improvement. I just don't want all of the tremendous accomplishments and hard work of FSA employees to be forgotten. These dedicated employees have worked hard for rural America's farmers and ranchers. We look forward to working with you to achieve the objectives of the loan programs and provide the assistance and service that family farmers so richly deserve. I appreciate the opportunity to testify today and I will be happy to respond to your questions. STATEMENT BY HAROLD BOB BENNETT HOUSE COMMITTEE ON AGRICULTURE SUBCOMMITTEE ON FORESTRY, RESOURCE CONSERVATION, FEBRUARY 21, 1997 - LUBBOCK, TEXAS First, I want to thank you, Chairman Combest, for bringing the Subcommittee on Forestry, Resource Conservation and Research to Lubbock, Texas, for this field hearing. As you know, Lubbock is in the center of some of the most productive farmland in the country. Agriculture is one of the top three industries in Texas. Our agricultural industry is very diverse and intense, thus requiring large amounts of capital. This capital and credit comes from many sources -- both public and private. Hopefully, from today's comments and with the support of all of us involved in agricultural finance, we will be able to improve and enhance all of our roles in agricultural financing. I would like to begin by stating unequivocally that we, in the Farm Service Agency (FSA) of Texas, are working to improve our current record in delivering our part of agricultural credit to our producers. We are satisfied that we are in the process of making some very necessary and long-awaited changes and improvements that will alleviate many of the past problems. We feel these changes will enable us to be more efficient, more effective, and more expeditious in loan making and loan servicing. We made a conscious decision early-on that extensive training would be necessary to accomplish many of our long-term goals. We knew this would cause some short-term problems |