Mr. BENNETT. It better be.

Mr. COMBEST. I agree. I'll go along with that.

So, you could tell me with confidence that there is no favoritism in processing applications?

Mr. BENNETT. There better not be. And I really don't think there I hope there isn't, but I don't blame them necessarily for having that fear. But it better not be happening.

Mr. COMBEST. What are your thoughts as to the future delivery of the farm credit programs? Do you feel that these programs are well to be considered continued under the county elected committee system as we currently have? Or is there thoughts of making a change in the county elected committee system within the Department?

Ms. COOKSIE. I think your first question was, does FSA, the Farm Loan Program need to stay in FSA? Is that what you're saying?

Mr. COMBEST. Right. Well, does it need to stay in FSA as it is under the county committee system, as we operate it today?

Ms. COOKSIE. I think, frankly, under the present county committee system, no. But I think that with some revisions to the county committee system, it could work fine.

Mr. COMBEST. And then I'd like to get your response to that, too. How would you change it? What concerns do you have now, Ms. Cooksie, about the way that the county committee system operates? Ms. COOKSIE. Well, keep in mind, for the record, this is my personal opinion. It is not the opinion of the Department.

Mr. COMBEST. Well, I understand that. I appreciate your opinion. Ms. COOKSIE. My personal opinion is that there's a perception problem more than a reality problem with the county committees out there. One of the perception problems that I've run into-and there is some reality to this-is that there are people who think because now we're moving county executive directors that have loan approval authority, that with the county committee hiring and firing the CED, the county executive director, that they're going to have some direct impact on whether these people are approved for loans or not. Because if they tell the CED to hire or fire somebody, if they don't approve a loan or if they approve a loan and they didn't want them to, that there would be some impact on whether they get their loan or not.

I think there is a lot of perception out there about that. I think in order to take care of that, it would be as simple maybe to think about taking the county committee out of the personnel system and put them in an advisory role for loan eligibility, where they're most needed I think. That's my own personal opinion as one of the places it could go.

Mr. COMBEST. Mr. Bennett, do you have any comments on that? Mr. BENNETT. I think it depends on where we see the county committee system now. They are not necessarily that involved with loan approval and what-have-you now because it's a line of authority from the State director to the district director to those folks that are dealing with agriculture credit. I can assure you in my visits with county committeemen, if they thought they had loan approval authority, half of them would quit today. After they thought about it tonight, the other half would quit tomorrow because

Ms. COOKSIE. That's right. That's right. I agree with that.

Mr. BENNETT [continuing]. These are farmers elected by farmers and they, themselves can not stand anymore liability. I think that's a real concern to them.

Now, I would agree with Carolyn as far as the personnel. We realize we're struggling with some things there on how do we get the approval authority in the total working knowledge of the agriculture credit, in the county office employees, the Federal and nonFederal? And by the way, before I came into this job, my farm had been into an ASCS office like yourself for 20 or 25 years, but I didn't know there was difference, Mr. Stenholm, between Federal and non-Federal until I got in this job. So, I appreciate what you said a while ago.

The Dairy Queen manager, the housewife, and the dentist don't know it, but it's-I think if you keep the county committee away from the loan approval authority, which would certainly take care of some of the conflict of interest and if I was on the county committee myself, I would not want loan approval authority, or to be involved with it. I think that gets into the personnel part because it's a real fear. They're borrowing money themselves and I don't think their banker would want them being liable for a bunch more loans also.

Mr. COMBEST. I have personally struggled with the county committee issue for a lot of years. Having been there, I'm a strong believer in the county committee system because I think it brings a local flavor of people who are out there in the same business. They're going to know the quality of the farmer, how good a job they do. And I like the idea-I have, through, actually, three different farm bills now, looked at, you know, considering the potential expansion of that authority.

And yet, then the other concerns that you were talking about, you know, the county committee mass resignations concerns me as well. You don't want to create a situation among fellow farmers out there that it makes their home a bad place to live and they're constantly getting beat up about the idea. I wish I had had the wisdom to know exactly where that line should be drawn, and I don't. I recognize that county committees have still got to, even though they have some authority to make different decisions-all those decisions are appealable, but they still have to follow the regulations. Mr. BENNETT. That's right.

Mr. COMBEST. You've got books that come down from Washington, and so they can't go beyond that. They don't have the power or the authority to go beyond that scope. But their input, I think, is invaluable. Their knowledge is invaluable. I have never seen a county committee that does not take that job extremely serious. What they want to know is what do they have to do to make certain they're complying with the law? They recognize their responsibility as decisions they make affecting USDA, affecting taxpayer dollars, and they take it very seriously. I have tremendous regard for county committees.

But I do think that, you know, there are some very valid points that you raise. I would hate to see us do away with the county committee system. Maybe this ought to be looked at as to what role do we want them to play. But I think we would lose a real value

that is currently being provided to USDA and to the farmer, which is the most important.

Do you feel that local county supervisors today have the authority that they need, or do they need additional authority in the loan making process?

Mr. BENNETT. Are you asking me?

Mr. COMBEST. Yes, both of you.

Mr. BENNETT. I personally think we spend a little too much time re-reviewing the review of the review.

Mr. COMBEST. There's a lot of heads shaking out there behind you, I'll say.

Mr. BENNETT. I hope that we in Texas are working to address that. It was impossible last year during the transfer of functions for seven district directors to run a $2 billion loan portfolio and for they only to have the review authority they had. Right now we have 24 district directors.

Again, I'm going to go back to training and education. The quicker we get those county office employees, Federal, non-Federal, all up to speed and the quicker we can transfer that out to them, the better off we're going to be at the State office, the better off they're going to be at the local level, and the better off the bankers and the producers will be at the local level.

In defense of them though-and I don't want to sound offensive, but I will defend them. I appreciate your taking the responsibility for some of the laws. I've told people before, we don't cook it, but we do have to serve it. Sometimes our employees in the regulations or what-have-you, there's a real fear with our employees that if we don't have that particular i dotted or t crossed, that we could or may lose a job. There have been some that have.

I would like to see, and I know Jimmy Clark and I have talked about it, and have said many times, it's a real radical thought to think about putting common sense in the Federal Government or the regulations or this, that, and the other, but we need to move towards that. I have confidence with the training of our local folks and our district directors and allowing them a little use of some common sense, that they'll make this work. Our employees can.

I think our county committees-I'm like yourself I'm very committed to the county committee system in an advisory role, especially, and in the interpretation of policy and procedure. I think they play an invaluable role there. I think we have to tap into that. I just hope that we continue to look forward and don't look back and say, "We shouldn't have done this." When you just give a method a year's experience, or a year's trial, or 2 years and you're going to judge it totally on that, I think we make a mistake. I hope we keep moving forward and never move backward. Because I could promise you and I can take you to counties, to districts real close to here where these are very conscientious people. Our employees are brothers and sisters, mothers and fathers, friends and relatives of those producers out there and of those bankers.

So, we are committed. They're working at it and we're focused on it. Wish us luck, but I hope we don't ever look backwards.

Mr. COMBEST. Ms. Cooksie?

Ms. COOKSIE. I agree with Harold Bob, but on, of course, a bigger basis, a nationwide basis. I believe that if nobody understands that,

we're not going to get more resources out in our offices. We're going to have less as time goes forward. So, we've got to take a real look at what we've done, how we do business now and streamline the entire process. Not only the guaranteed program, but everything we do, every day.

One of the things that has been a fallacy of downsizing is that we have downsized the staff. We have not downsized the paper. We have not downsized the requirements and that has to be a part of the downsizing. You can't get rid of people and not get rid of some of the paperwork involved. So, I think we're going to have to look at the entire gambit of our programs and do that, sooner than later.

I think we need to start now. We don't have the luxury to wait. We don't have the employees to do it. We don't have the luxury of having two employees do the same thing. We don't have the luxury of having a checker check the checker anymore. So, we're looking at that in farm loan programs. We've started the process to do that with all of our programs. Not only guaranteed program but the direct program, all of our programs.

We're fast coming to a point, or we are to the point when I talk to county office employees, they can't get their work done anymore. It's very stressful for them. We're asking them to do things. We're putting requirements on them that they do not have time to do. So, we're going to have to look at the whole process. We're going to have to change the way we do business in farm loan programs.

Mr. COMBEST. Well, in the concept of Farm Loan agencies, the idea was to have a number of people who can perform various duties. Let's say you take an office where you've had an FHA director for several years and we've been combined now into, again, an FSA. As you're talking about your training, training the other people in the office, whose decision is it to begin to allow other people to actually get into the day-to-day activity involvement then of a loan? Is it the county supervisors? Is it district directors? Does it come from the State level? Who makes the decision when a person should be able to start helping to spread that workload in the county?

Mr. BENNETT. The district director should direct all agriculture credit and have the supervision, and overall supervision of an agriculture credit office. But the CED and that supervisor within a county and as you know, in Texas, we have several districts that are multi-county which sets two different kinds of problems.

Mr. COMBEST. Right.

Mr. BENNETT. But I think the key to it is that CED and the supervisor working in conjunction with each other through the direction of the district director.

Mr. COMBEST. Well, in an instance where a CED is ready to start doing that or making suggestions but seems to be getting no cooperation, how would one suggest that one goes about curing that? Mr. BENNETT. We fully intend for the CEDs to be involved in the loan making process and we have some less than 70 miles from here that are. We have some that aren't. We have some that have been more aggressive than others. Our biggest problem have probably been walls. And I don't mean just the walls in a building or

down the street. We have some buildings where we've taken down the walls but there's an invisible wall there.

We visited about 15 or 20 offices in the last 2 days and we found one county office where there was an actual, what we call, full merging of employees where they're interspersed, intertwined and there's this activity of all employees being involved in different parts of it. That's what we want to move towards. I think that's where we have to get to. I think when we get to that point, where they're trained, where they're working together, they're not worried about who's called boss, or who's dictating or this, that, and the other. They're worried about getting that service to the producer. But the district director is ultimately responsible for the overall direction of credit within his or her district.

Mr. COMBEST. Mr. Stenholm.

Mr. STENHOLM. I'm going to pose this same question to the banking panel in just a moment. It struck me as rather unusual, Ms. Cooksie, of you suggesting, and Mr. Bennett, your response, that somehow placing a county elected committee in the position of a bank board or a loan committee of a bank board is something that we shouldn't even consider because if we did that, there would be all kinds of resignations. I say that in the light of I understand that there are many bank board directors that are becoming more and more concerned about even serving as a bank board director because of the possible liability of the decisions that they make regarding some of the same law.

But I'm going to pose this as a rhetorical question, not for an answer today, but more of expressing my opinion that if we were starting from scratch, we would have a loan committee. You know, most banks have loan committees but they also invest in their president or CEO or lending authorities, certain freedoms that they can make subject to them losing their job if they make bad decisions. But you give a certain amount of freedom to make those decisions and it works pretty well in private banking and PCA lending, et cetera. Boards of PCAs extend to their chief executive officers, presidents, that lending authority.

It seemed to me that what we've got to look for is a marriage, a perfect marriage between the two. If we try to separate one from the other, it creates the problem. You know, that's one of the areas that's going to have to be worked out. But I understand the liability concern. But by the same token, as Mr. Combest just pointed out, the value of an advisory committee advising whoever it is making those loans, I don't know how we can do better. Part of the problem we've had in the past is that this decision has been made by the FHA personnel. That wasn't perfect either, as we looked at it, because therein is some of the problem. You invested in a quote and I say this affectionately since a bureaucrat. You know, that is it.

I guess we don't want to spend all the time on this panel, but I want to use the remainder of my time here to set the proper tone for the FSA, at least from this Member of Congress' eyes and perspective.

There has been a lot of opposition to the FSA concept. That's the understatement of the day. The foot-dragging, the downright opposition, and perhaps some it has merit. In fact, I would say some

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