COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY

PATRICK J. LEAHY, Vermont, Chairman

JOHN MELCHER, Montana
DAVID H. PRYOR, Arkansas
DAVID L. BOREN, Oklahoma
HOWELL HEFLIN, Alabama
TOM HARKIN, Iowa

KENT CONRAD, North Dakota
WYCHE FOWLER, JR., Georgia

THOMAS A. DASCHLE, South Dakota
JOHN B. BREAUX, Louisiana

RICHARD G. LUGAR, Indiana
ROBERT DOLE, Kansas

JESSE HELMS, North Carolina
THAD COCHRAN, Mississippi

RUDY BOSCHWITZ, Minnesota
MITCH MCCONNELL, Kentucky

CHRISTOPHER S. "KIT" BOND, Missouri
PETE WILSON, California

DAVID K. KARNES, Nebraska

CHARLES RIEMENSCHNEIDER, Staff Director

JOHN PODESTA, Chief Counsel
CHRISTINE SARCONE, Chief Clerk

CHARLES CONNER, Staff Director for the Minority

(II)

CONTENTS

Hearing held on June 9, 1987......

REFORM AND MODERNIZATION OF THE FARMERS HOME

ADMINISTRATION, S. 1179

TUESDAY, JUNE 9, 1987

Conrad, Hon. Kent, a U.S. Senator from North Dakota, opening statement.......

Prepared statement

Section-by-section summary

Harkin, Hon. Tom, a U.S. Senator from Iowa..........

Daschle, Hon. Thomas A., a U.S. Senator from South Dakota

Page

1

1

3

9

176

18

CHRONOLOGICAL LIST OF WITNESSES

Clark, Hon. Vance L., Administrator, Farmers Home Administration, U.S.

Department of Agriculture......

12

Supplied answer concerning:

Appeals...........

23

The exact number of interest buydowns on guaranteed loans..............

Surplus and eligible property........

26

31

2222

Senator Daschle's complaint that FmHA was requiring borrowers

who are renters to obtain signature of their landlord on the note

for operating loans..........

Supplied table-Aging of Farmer Program Delinquent Amounts.................

Massey, James T., executive director, Farmers' Legal Action Group, Inc., St.

Paul, MN.....

Prepared statement with attachments.........

Memorandum-Recent decisions in the Coleman v. Lyng national class

action lawsuit.

Court order halts farm foreclosures by FmHA, June 5, 1987

Court order, press release, June 3, 1987 ..........

Excerpt of opinion issued May 7, 1987, and memorandum and order, A1-
83-47, dated May 7, 1987....

Memorandum and order, dated May 7, 1987

Memorandum and order, dated June 2, 1987.....

Severens, Eugene, Center for Rural Affairs, Walthill, NE.

"Strange doings at Farmers Home," article from the Atlanta Constitution

Vogel, Sarah M., assistant attorney general, State of North Dakota..........

Prepared statement of attorneys general Nicholas Spaeth of North

Dakota, Hubert H. Humphrey III of Minnesota, and Tom M. Miller of

Iowa, Neil F. Hartigan of Illinois, submitted by Sarah M. Vogel...............

Attachment A-Worksheet for accepting inventory property

Attachment B-AN from FmHA, dated February 13, 1987..

Paige, Ralph, executive director, Federation of Southern Cooperatives/Land

Assistance Fund, Atlanta, GA

Letter, dated May 21, 1987, from Gerald B. Murphy, president, Equity Control

Corp., Clear Lake, IA, to Senator Tom Harkin

Bergstrom, Gary, president, the National Bank of Harvey, Harvey, ND............

Page

Bergstrom, Gary, president, the National Bank of Harvey, Harvey, ND-

Continued

Prepared statement.....

185

National Bank Buydown Program....

188

Parsons, Lonnie D., Western State Bank, Devils Lake, ND

189

Huff, Cecil, dairy farmer, cochair of the Credit Committee of the National

Save the Family Farm Coalition, Ava, MO............

193

Prepared statement..........

197

Position on FmHA reform legislation

200

Glenn, Dr. Max E., executive director of the Oklahoma Conference of Church-

es and coordinator of the Oklahoma Ag-Link Coalition....

Prepared statement..........

201

204

Prepared testimony, April 5, 1986, to Senator Nickles, U.S. Senate Over-

sight hearing....

213

Letter, dated March 4, 1986, to Mike C. Turpen, attorney general, State

capitol, Oklahoma City, OK, from Geary Danielsen, manager-legislative

services....

216

Forbearance Policy for PCA's and FLBA's.............

Mediation in Oklahoma, a Grass-Roots Resource

218

219

Dockter, Dennis, farmer and mayor, Cogswell, ND, representing the Dakota

Resource Council, prepared statement...

222

Schultz, Dorthea J., rancher, Hardin, MT, chairperson, Big Horn Rural Alli-

ance and board member, Northern Plains Resource Council, prepared state-

ment..........

224

ADDITIONAL MATERIAL SUPPLIED FOR THE RECORD

Prepared statements:

North Dakota Farmers Union, Alan Bergman, president, with attached

map of distribution of chapter 12 filings by county......

Pay, Donald, Technical Information Project, Pierre, SD.

Attachments:

Environmental assessment and finding of no significant impact by

FmHA.............

Comments submitted by Technical Information Project on the above..

Reprint of S. 1179, a bill to amend the Consolidated Farm and Rural Develop-

ment Act to improve the administration of Farmers Home Administration

loans, and for other purposes......

Transcript of a fact finding forum on Indian Agriculture, before Hon. Kent

Conrad, U.S. Senator, taken at the Civic Center, New Town, ND, Tuesday,

September 1, 1987......

4. Written statement of Kenneth J. Fredericks, Sr., with attachments......

5. Letter, dated August 11, 1987, case history, with attached addendum,

dated September 8, 1987.

375

403

6. Questions submitted to FmHA, with attached answers

406

7. Questions submitted to BIA, letter dated August 21, 1987, to Al Spang,

Superintendent, Bureau of Indian Affairs, from Hon. Kent Conrad,

U.S. Senator......

411

8. Written statement of Ralph H. Leet, State Director, FmHA

414

9. Letter, dated August 31, 1987, to Hon. Kent Conrad, from Melvin J.

Rousseau, Acting Area Director, BIA, with attachment..........

417

10. Proposed legislation by the Three Affiliated Tribes

423

Letter, dated September 25, 1987, to Hon. Kent Conrad, from Ross O.

Swimmer, Assistant Secretary, U.S. Department of the Interior, Office