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because we were taking comployees out of their woricplace. However, we felt the long-term benefits of a highly trained work force would ultimately prove to be invaluable and offset the short-teran, negative effects. Our goal is to deliver a high quality and timely service to our

customers.

Before I get into the report on ou cureat status md our plans for the future, I would like

to point out the progress we have made to date.

As you know, Mr. Chairman, change is always hard, and we have bad our share of troubles as we have implemented USDA's reorganization, bowever, by June 1996 we had made more loans to more producers for more dollars then at the same time the year before. We accomplished this in addition to reducing our delinquencies. At the same time we also were implementing disaster assistance in more than 200 coumties affected by the drought, plus implementing the provisions of the Federal Agriculture Improvement and Reform Act of 1996 (1996 Fum Bill) in record time.

On the following pages we will provide exhibits and information on the current status of

agricultural credit as it relates to those programs administered by the FSA in Texas. We bove

included all information as of December 31, 19%, that reflects the number of borrowers, the

mount owed, delinquencies, and timelines required to complete the lon making process. We

have provided pertinent information regarding the direct and guaranteed loan program, possible

effects of the 1996 Farm Bill, and hopefully, some discussion points that will enable us to deliver

Our programs in a more efficient manner.

We have some very specific goals for 1997 and plans to achieve those goals. Our first goal is to complete all loans in the mandated time by April 1, 1997. To accomplish this will

require cooperation by all interested parties, including producers, bankers, and the FSA. We will continue training all FSA employees.to increase our pool of well-trained employees. We have already increased the number of employees with loma-approval authority which will expedite

approval.

We have taken and will continue to seek many steps to provide assistance to our loan officers to expedite approval and the loan application process. We plan to use our contracting authority, possible reassignments of temporary details, and the use of overtime to provide the manpower to expedite loan processing.

Our second goal is to settle all guaranteed loan loss claims in a timely and current

manner. We will continue training our employces and customers to prepare and analyze applications and loss claims in a proper and consistent manner. We have already begun the

process of streamlining the review process and will continue to use District Directors and State

Office personnel to expedite settlement of loss claims.

Our third goal is to continue the reduction of our delinquent direct loan accounts. These delinquent accounts have accumulated for several years. We hope to reduce the delinquent dollar

amount by S100 million in 1999. We have several employees who spend a considerable amount Our fourth, and possibly most important, goal is to provide more courteous, more

of time in the resolution md settlement of these accounts.

professional, and more timely service to all of our customers in an efficient manner. The

institutional challenges and changes required of us by the merger of the former ASCS and FmHA

were probably greater than my of us had anticipated. We certainly struggled with the laws

pertaining to supervision of federal and non-federal employees in the same workplace. All of our

employees have remained willing and dedicated to providing service to producers.

In closing, let me again thank you for coming to Lubbock, Texas, and for allowing us this opportunity to testify before this Committee. We remain committed with you to provide better

service to our customers -- for our Government.

NUMBER OF BORROWERS AND AMOUNTS OF LOAN

Exhibit 1..............Direct Loans and Direct Borrowers Exhibit 2...................Guaranteed Loans and Borrowers

Exhibit 3...............Certified Lender Program
Exhibit 4..............Comparison of Obligations Table
Exhibit 5...............Loss Claims Paid Table

Exhibit 6.................Delinquency Reduction

Exhibit 7................Delinquency Reduction Continued Exhibit 8, 9.. .......Guaranteed Loan Tracking

Exhibit 10.................Direct Loan Tracking

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