Farm Service Agency:
Update on the Farm Loan Portfolio
RCED-97-35: Published: Jan 3, 1997. Publicly Released: Jan 3, 1997.
Pursuant to a congressional request, GAO provided selected information on the direct and guaranteed farm loan programs administered by the Department of Agriculture's Farm Service Agency (FSA), focusing on the: (1) levels of outstanding principal on active loans and amounts owed by delinquent borrowers as of September 30, 1996, compared with similar data as of September 30, 1995; and (2) losses on farm loans during fiscal year (FY) 1996.
GAO found that: (1) as of September 30, 1996, the outstanding principal for FSA's active direct and guaranteed farm loans totalled $16.9 billion, $10.5 billion in the direct loan program and $6.4 billion in the guaranteed loan program; (2) of the $10.5 billion in outstanding principal in the direct loan program, $3.6 billion, about 34 percent, was held by delinquent borrowers; (3) this compares with 40 percent of the $11.4 billion in outstanding principal for FY 1995; (4) for borrowers who owed more than $1 million in outstanding principal, the delinquency rate was considerably higher than for those who owed less than $1 million; (5) in FY 1996, large borrowers held $357 million in outstanding principal, of which $314 million, about 88 percent, was held by delinquent borrowers; (6) by comparison, borrowers who owed less than $1 million held $10.1 billion in outstanding principal, of which 33 percent was held by delinquent borrowers; (7) of the $6.4 billion in outstanding principal in the guaranteed loan program, $280 million, or about 4 percent, was held by delinquent borrowers; (8) by comparison, $218 million, or about 4 percent of the $5.9 billion in outstanding principal, was held by delinquent borrowers in FY 1995; (9) during FY 1996, $1.1 billion in principal and interest was lost by reducing or forgiving the debt of delinquent direct loan borrowers, and about $42 million in losses was incurred on guaranteed loans.