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THE WHITE HOUSE

Office of the Press Secretary

For Immediate Release March 26, 1999

STATEMENT BY THE PRESS SECRETARY

Farm Loan Assistance

The Clinton Administration announced today that it will take action to ensure that farmers preparing for spring planting will not lose access to the Department of Agriculture's loan programs, which are running short of funds. The FY99 supplemental appropriations bill proposed by President Clinton on February 26th would make $152 million available for credit and other programs needed by farmers. Congress did not enact the supplemental before leaving Washington for a two-week recess. To avoid running out of funds for loans until Congress can return and act on the legislation, USDA Secretary Dan Glickman will be transferring $30 million - which will provide for more than $300 million in additional loans --- within the Farm Services Agency to provide for uninterrupted service to farm families' loans.

In addition, USDA is allocating $1 million in funds to make sure that FSA temporary employees are kept on board to help staff the offices that process emergency assistance applications from farmers.

The Secretary's transfer of $30 million today will make $333 million worth of additional funds available to three loan programs:

     $19.6 million to finance $83 million worth of emergency loans;
     These loans can be used for many purposes, including repair or
     replacement of farm structures damaged by natural disasters, as
     well as for farm operating expenses when disaster has reduced
     farmers' incomes.  Direct loans are provided at 3.75 percent 
     interest.

     $7.9 million to finance $90 million worth of subsidized guaranteed
     farm operating loans; These loans are used to finance purchases of
     seed, fertilizer, tractors, and other inputs farmers need to
     operate their farms.  USDA guarantees loans made by private lenders
     and subsidizes the interest rate on the loan by four percentage
     points; and

     $2.5 million to finance $160 million worth of guaranteed farm
     ownership loans.  These loans are guaranteed by USDA to finance
     land purchases. This year any farmers are using them to refinance
     their high-interest mortgages to lower their operating costs.

     The transfer of funds is a stopgap measure that will replenish loan

accounts only through the middle of April. To avoid layoffs and service cuts, Congress will need to pass the supplemental appropriations bill promptly upon its return from the recess.

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