Report on the Implementation of the Farm Credit Act Amendments of 1980
GGD-85-32: Published: Apr 8, 1985. Publicly Released: Apr 8, 1985.
- Full Report:
GAO reviewed the legislative objectives of the Farm Credit Act Amendments of 1980, including: (1) increasing agricultural cooperatives exports financed by the Farm Credit System; (2) increasing non-System financial institutions' availability of funds; (3) helping young, beginning, and small farmers; and (4) maintaining utility cooperatives' eligibility to borrow from the System.
The System has provided over $2 billion in agricultural export financing since lending began in April 1982, and cooperatives have been able to sell in new markets. While agricultural exports of U.S. products declined between 1982 and 1983, the market share of agricultural cooperatives was maintained. However, GAO could not obtain any data on increased profitability for farmers of exporting cooperatives. In addition, the changed eligibility requirements did not result in greater utilization of discounting services offered by the System, and the amount of loans discounted annually has remained constant. Many banks did not need additional funds for agricultural loans because of increased bank liquidity and weak farm loan demand. Furthermore, some banks were not aware of the program, and others viewed the System as a competitor. GAO found that the System has not increased credit to young, beginning, or small farmers or ranchers since the passage of the amendments. Neither the amendments nor the legislative history provide direction on specific forms of financial assistance Congress intended the System to provide this group of borrowers. The full impact of the change in eligibility requirements remains unclear, but GAO found that some rural electric utility cooperatives are now eligible to borrow from the System due to the change.