THE WHITE HOUSE
Office of the Press Secretary
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.