Farmers Home Administration and Small Business Administration Natural Disaster Loan Programs: Budget Implications and Beneficiaries

The Small Business Administration (SBA) disaster assistance loan volume increased from $200 million in 1977 to $2.5 billion during fiscal 1978, while Farmers Home Administration (FmHA) disaster assistance loans increased from $1.2 billion to $3.4 billion for the same period. The increase caused a severe impact on the SBA budget, but had little impact on the FmHA budget. Because a uniform factor for measuring disaster could not be found, GAO was unable to determine the correlation existing between disaster severity and the amount of loans made. Since FmHA has developed an expertise for dealing with farmers' unique needs, the need for SBA to make natural disaster assistance loans to farmers seems questionable.