Fainting, Saturday, July 14,1979 Farm Credit gets expanded loan proposal WASHINGTON, D.C. - Senator Herman E. Talmadge (D-Ga.), chair man of the Senate Com mittee on Agriculture, Nutrition, and Forestry, introduced legislation Monday to broaden the lending authority and give greater flexibility to the Farm Credit System - the major lender to American agriculture. Talmadge said the bill is needed to “revise and up date” the Farm Credit Act of 1971, which was intended as a new charter for the Farm Credit System to make it more “responsive to the changing needs of rural America.” Talmadge said the bill would better equip the System to fulfill that charter. Gene Swackhamer, president of the Farm Credit System, Baltimore, com mented on Monday that he believed Talmadge’s proposals would be good news to agriculture. He also said that interest rates may be starting to come down. He made the remarks at a conference of agricultural communicators in Newark, Del The Farm Credit System provides about a third of the credit needs of the Nation’s agriculture, including in dividual farmers and rural cooperatives, with an annual loan volume of more than $5O billion. Cooperatively organized with no tax funding, the System includes the Federal Land Banks, which make long-term farm mortgage loans; the Federal In termediate Credit Banks, which make intermediate term farm loans through Production Credit Associations; and Banks for Cooperatives, which lend to farmer cooperatives. The System is supervised by the Farm Credit Administration (FCA), an independent Federal agency funded by the member institutions. Talmadge said seven major provisions comprise the heart of the bill, which was approved by the Federal Farm credit Board the overall policy-maker for the Credit System The first would lower to 60 per cent membership of a cooperative who must be farmers to be eligible to borrow from Banks for A & D LOGGING HIGHEST PRICES PAID FOR STANDING TIMBER 50 TREES OR MORE PH: 215-437-4198 Gene Swackhamer Cooperatives. The current farmer-member minimum is 80 per cent, except for rural electric and telephone co-ops where the requirement is 70 per cent. Talmadge said the change would allow Banks for Cooperatives to finance more co-ops, but would still require that the co-op be controlled by farmers. A second major provision of the bill would permit Federal Land Banks to make loans for more than 85 per cent of the appraised value of farm real estate when these loans are guaranteed by a Federal agency, such as Farmers Home Ad ministration, or by a State government. This would make it possible for Federal Land Banks to expand financing to limited-equity farmers especially young farmers, Talmadge said. A tmrd major item would broaden the authority of Federal Land Banks and Production Credit Associations to finance processing and marketing activities and facilities directly related to an agricultural producer’s operations and those of other bona fide producers. This proposal is intended to assist farmers, ranchers and fishermen, who are now eligible to borrow from the System, to acquire or im prove a processing or marketing capability for their own agricultural production. Under this proposal, district Farm Credit boards would have authority to set limits for such loans, subject to Farm Credit Administration ap proval. A fourth provision would authorize Banks for Cooperatives to finance agricultural export tran sactions that benefit U. S. Anytime cooperatives. Banks for Cooperatives would be permitted to make deposits in foreign banks, receive and hold credit balances from banks and borrowers, buy and sell bankers ac ceptances, buy time drafts payable by foreign buyers of farm products, take part in currency exchange and make loans to facilitate transactions of borrowing cooperatives. In addition, the proposal would authorize Banks for Cooperatives financing of trading facilities which are jointly owned by a U. S. cooperative and a foreign cooperative, and authorize Banks for Cooperatives investments in foreign financial institutions or servicing operations related to export trade. Banks for Cooperatives also would be authorized to finance directly equity mvestors who build facilities or provide equipment for lease to a U.S. farmer cooperative. 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It also would clarify that cooperatives solely engaged in furnishing aquatic business services are eligible to borrow from Banks for Cooperatives. It would permit Federal In termediate Credit Banks to discount aquatic loans of other financial institutions not part of the Farm Credit System. The sixth major provision would encourage cooperation between Farm Credit System institutions and commercial banks by authorizing Federal Land Banks to participate in loans with lenders outside the System and by authorizing Production Credit Associations to issue par ticipation certificates to commercial bankers and other lenders. This would streamline a program under which PCAs participate in farm loans originated by commercial banks. OMASS ALTERNATE HEAT SYSTEM Soon Stormor will have the Biomass System an alternate heat source for the EZEE-DRY.. produce even more energy savings The Biomass stem saves fuel and supplements fuel in short ipply by burning corn stalks or other crop residue the heat source This recent development from -ormor demonstrates their leadership in energy vmg gram drying le model shown ma .odified or re-designi t specific uses I GRAIN BINS The seventh major provision covers several proposals designed to help the FCA recruit, hire and retain qualified people to supervise the Farm Credit System. Talmadge raised a question about another provision of the bill that would authorize the FCA to charter corporations that perform service and finance functions for the Farm Credit institutions. He said he did not want this provision to be used as a means of authorizing an expansion of the scope of the System’s insurance ser vices Talmadge said he had been assured by FCA Governor Donald E Wilkinson that the provision in question would not authorize any expansion of the System’s insurance activities but was needed to promote internal efficiency
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