Economic Development:

Conservation Demonstration Program

RCED-94-215R, Jun 1, 1994

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Pursuant to a congressional request, GAO reviewed the Agricultural Resource Conservation Demonstration Program, focusing on: (1) state participation; (2) the amount of loans guaranteed and interest paid by the Farmers Home Administration (FmHA); (3) loan use; and (4) the status of implementing regulations. GAO noted that: (1) as of May 15, 1994, Vermont was the only state that applied for participation in the program; (2) FmHA has guaranteed 3 loans totalling $23,548,456 to Vermont and has paid over $2 million in interest; (3) Vermont has invested the loans in U.S. government securities and obligations on which it has received over $2.2 million in interest earnings; (4) Vermont has used about $1.2 million of its earnings, primarily to purchase development rights on 5,377 acres of agricultural land and to pay associated costs, administrative costs, and loan guarantee and legal fees; (5) Vermont provided matching funds which it used with the interest earnings to purchase development rights; and (6) FmHA issued interim program regulations on February 4, 1992, and plans to issue final regulations by September 30, 1994.