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curriculum and coordination of the program is conducted by the staff from the Department of Agricultural Sciences at Texas A&M University - Commerce.

Training Locations:

The training for FSA borrowers is conducted at selected public schools where the designated instructor is employed. These teaching centers are located in central sites located within a reasonable distance from borrower's farms.

Fees:

Enrollees in the farm financial management training program that are a single proprietorship FSA borrowers will be subject to a base fee of $795 for the complete program, payable upon enrollment. Partnerships will be subject to the base fee plus an additional $100 per partner. Corporations will be subject to the base fee plus an additional $100 per each corporate member attending that is not in the immediate family. In addition, enrollees must pay for the approved account book and any other enrollee requested materials.

Enrollees in the production management course pay an additional $200 for the complete program. The farmer must be concurrently enrolled in the financial management program. The production course cannot be taken separately because the analysis information derived from the financial course is an integral component of the enterprise analysis required for the production guidelines.

Enrollment:

Farmers will be enrolled during the Fall before the classroom instruction begins in October so that the sequence of record keeping and analysis will flow and be uninterrupted. Enrollment is limited to a maximum of 15 farm units per approved instructor. Programs are located in public school facilities which make provision for compliance with laws related to persons with disabilities and persons with English as a second language. A portion of the instruction takes place in the farmers own place of business or home, where compliance with her/his own disability needs can be assumed to be met.

Record Keeping and Analysis:

All enrollees must keep complete farm and family financial records with the approved account book or computerized farm record system. The records must be submitted to the instructor for summary and analysis at the end of the farm record year.

Class and Group Meeting Attendance:

Enrollees are expected to attend class and group meetings and activities organized for their cohort group. The enrollment in the management education program is intended to include all members of the family - husbands, wives, mature children - who have an active role in the farm business or who can benefit from counsel related to management instruction. All are welcome and encouraged to attend with special emphasis on those who share in the farm and family decision making.

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Personalized Instruction:

Enrollees will be provided personalized instruction both on the farm and in the program office. Farm families are expected to make time in their schedule for personalized instruction. Members of the TxFRFPMP will receive two on-campus consultations and one on-farm instructional visit for each year. Production students will receive one additional farm visit and be able to attend an enterprise specific field day or farm tour. Their instructional activities will generally, (but not always) be scheduled in advance at a time mutually agreed upon by the enrollee and the instructor. On-farm instruction will normally be scheduled for a 1 1/2 - 2 hour duration.

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4.

Comprehensive, quality program developed to meet the needs of the Texas farmer and rancher.

5.

Training and certification of instructors, administration and coordination of the FBM program will be conducted by the FBM staff of Texas A&M University - Commerce.

6.

Endorsed by the Texas Workforce Commission (TWC), Texas Education Agency (TEA) and the Vocational Agriculture Teachers Association of Texas (VATAT).

7.

The Agriculture Science Instructors are trained to work with people; have at least a Bachelor's degree and are certified teachers; have had a minimum of three years teaching experience in farm management and agribusiness; and know the local conditions and can speak and work with the farmers in their area.

8.

The FSA borrowers are working with Agriculture Science instructors that they already
know and trust. They are also familiar with the school facilities that will be used for
teaching the FBM education program.
All members of the FSA borrower's immediate family are eligible and are encouraged
to attend the training program.

9.

10.

Knowledgeable and experienced staff that will train, administer and coordinate the FBM program through Texas A&M University - Commerce. Director of the program was the major author for the FBM curriculum used in the state of Minnesota. He has also had practical experience in working with and developing a local and state FBM education program for adults.

11.

Is the ONLY Farm & Ranch Financial/Production Management Program for the entire state of Texas offering on-farm, group and individualized personal instruction and guidance.

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CHALLENGES OF PROGRAM IMPLEMENTATION:

There have been six barriers that have hampered an effective program implementation process in Texas.

1.

The Privacy Act has caused considerable consternation for the state's FSA offices and vendors. The farmers are to complete a release form when they sign for the loan. These release forms are turned in several months later, if at all, and then forwarded to the vendor. The vendors do not know who to contact until the release form is received. There is a large percentage of the farmers that are required to take this training and the vendors do not know who they are or how to reach them. The Privacy Act is needed to be revoked, in this instance, so that the vendor can more effectively contact, serve and train the farmers.

2.

The farmers are to have enrolled within 90 days following the signing of the loan papers. There is little follow-up from the FSA offices to see if the farmer has enrolled and is meeting the training requirements of their loan.

3.

The farmers and ranchers are pushing off enrolling and taking the classes hoping that the training criteria for the program will go away or they will be waived from the requirements.

4.

Receiving tuition money from their loan and spending it on other things. The farmers need to commit when they sign for their loan and send in the tuition fees so a vendor can plan for class locations to meet the demand.

5.

Holding classes in areas where there are sufficient numbers of borrowers and unable to fill them. We have about 40 different locations that have trained and certified teachers to conduct this program. See attached list. We have about nine programs up and running.

6.

Other approved financial and production programs in the state are survey courses and do not go into the depth that this program does. The other programs do not have the students keep a full years records or provide the farmer an extensive computerized business analysis like we do. Some farmers are looking to just get the check mark for completion more than what they can learn and apply to improve their financial and managerial aspects of their operations. Many farmers and ranchers are looking for an easy way out, not what they can learn to improve the profitability and efficiency of their business operation.

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Subcommittee on Forestry, Resources Conservation and Research Field Hearing on Agricultural Credit at Lubbock, Texas

My name is Bobby L. Lemons, Executive Vice President of The City National Bank of Colorado City, Texas. We are a 63 million dollar financial institution located in Colorado City, Mitchell County, Texas trying to serve the credit needs of the farmers and ranchers of Mitchell County, Texas. We need all the tools available to help those viable farmers and ranchers weather the agricultural crisis of the 1990's.

During the past eighteen months, City National Bank submitted sixteen loans for 6 separate customers to F.S.A. for guaranteed loans. Ten of the loans submitted have been approved and funded and six were declined. These six have been appealed with hearing scheduled February 25, 1997. Four out of five customers approved had loans which paid off F.S.A. while the loans declined did not have funding to pay off F.S.A.

There is an increased risk for community banks making agricultural operating loans caused by the ending or downsizing of government payments, payment limitations and emergency loan downsizing. Now is the time for all of us to work together. Community banks such as The City National Bank need to make loans but we also need to hedge our risk with F.S.A. guaranteed loans. With less funding, F.S.A. needs to make better of these funds by using the guaranteed loan program. F.S.A. needs to look at requests with the intent to make the loan not reject the loan.

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F.S.A. county officers need to uniformly apply the rules that Congress has implemented. Different interpretations of the rules have caused many community banks to pull out of agricultural lending. This hurts the community, Banks, and eventually the tax payer.

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Page Two
February 21, 1997

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The packaging of F.S.A. guaranteed loans by outside vendors has come under fire by some county F.S.A. offices. The City National Bank does not recommend packages but does provide a list of area packagers. The packagers sign a contract with the farmer wishing to obtain F.S.A. guaranteed loan. The loans that The City National Bank has on appeal have as one of their reasons for being declined as packaging fees are not allowed. Unless U.S.D.A. and Congress have changed the rules, this ruling is in error. I have visited with Bankers in our area and these fees are being paid out of guaranteed fees.

Equal treatment across the State and Nation is a must if we are to work together to serve the credit need of the American Farmer during this transition period from government payments to world markets.

Your attention and cooperation in these matters is greatly appreciated. Thank you for your dedicated public service.

Sincerely,

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Bobby Lemons
Executive Vice President

BL/kf

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