Farmers Home Administration:
An Overview of Farmer Program Debt, Delinquencies, and Loan Losses
RCED-86-57BR: Published: Jan 2, 1986. Publicly Released: Jan 30, 1986.
- Full Report:
In response to a congressional request, GAO provided information on: (1) the total farm debt and the Farmers Home Administration's (FmHA) portion of that debt; (2) the total number of loans, borrowers, and loan amounts for each major FmHA farmer program; and (3) delinquencies and loan losses occurring in these programs.
GAO found that: (1) total farm debt from all lenders more than doubled between 1975 and 1984, growing from about $91 billion to over $212 billion; (2) over this same period, FmHA farm debt increased over 400 percent, growing from about $5 billion to almost $26 billion; and (3) as of June 30, 1985, the FmHA major farmer program direct loan portfolio was almost $28 billion and consisted of 270,058 borrowers with 757,219 loans. GAO also found that: (1) delinquent payments on FmHA major farmer program direct loans increased from $164 million in 1976 to $6 billion in 1985; (2) almost $4 billion of the 1985 delinquencies are in the emergency disaster loan program; (3) the $6.4-billion direct loan delinquency represents nonpayment of principal and interest due on almost half of the total direct loan portfolio; (4) delinquent amounts would be much higher if FmHA had not made about 45,000 borrowers current during 1985 through rescheduling, reamortization, and debt waivers; (5) about 75 percent of the 1985 direct loan delinquent amount is owed by borrowers who have not made a payment in over 3 years and probably will not be able to do so; (6) for the past 10 fiscal years, annual loan losses in the major farmer programs have grown from $24 million to over $335 million for direct loans and from $963,000 to over $19 million for guaranteed loans; and (7) total annual loan losses increased over 400 percent between 1982 and 1985, with the greatest loan losses in the emergency disaster and economic emergency programs.