Consolidated Farm Service Agency:
Update on the Farm Loan Portfolio
RCED-95-223FS: Published: Jul 14, 1995. Publicly Released: Jul 14, 1995.
Pursuant to a congressional request, GAO provided information on the Department of Agriculture's direct and guaranteed farm loan programs, focusing on: (1) the levels of outstanding debt on active loans and amounts owed by delinquent borrowers as of March 31, 1995; (2) losses on farm loans from fiscal year (FY) 1989 through March 31, 1995; and (3) new loans to borrowers who were delinquent or whose past defaults resulted in losses.
GAO found that: (1) as of March 31, 1995, the Consolidated Farm Service Agency's (CFSA) outstanding principal for active farm loans totalled $11.9 billion in the direct loan program and $5.9 billion in the guaranteed loan program; (2) 47 percent of the outstanding principal in the direct loan program and 4 percent of the outstanding principal in the guaranteed program was held by delinquent borrowers; (3) farm ownership loans accounted for $4.7 billion in outstanding principal owed and emergency disaster assistance loans accounted for $3.2 billion in outstanding principal; (4) 34 percent of borrowers who owed less than $200,000 were delinquent, while 93 percent of borrowers who owed over $1 million were delinquent; (5) CFSA incurred $12.4 billion in losses on direct loans and $300 million in losses on guaranteed loans from FY 1989 through March 31, 1995; (6) the highest losses within the direct loan program occurred with emergency disaster assistance loans; (7) CFSA made about $234 million in new direct loans and $214 million in new guaranteed loans to borrowers after it had incurred losses on their previous farm loans; and (8) CFSA made an additional $130 million in loans from FY 1989 to March 31, 1995 under a policy allowing delinquent borrowers to obtain new loans for operating expenses.