Farm Service Agency:

Status of the Farm Loan Portfolio and the Use of Three Contracting Provisions for Loan Servicing

RCED-98-141: Published: May 5, 1998. Publicly Released: May 19, 1998.

Additional Materials:


Lawrence J. Dyckman
(202) 512-9692


Office of Public Affairs
(202) 512-4800

Pursuant to a congressional request, GAO provided information on: (1) the levels of outstanding principal on active direct farm loans at the end of fiscal years (FY) 1995 through 1997, including the amounts owed by delinquent borrowers and the amount of debt written off by the Farm Service Agency (FSA) through the debt settlement process in each of these fiscal years; and (2) FSA's use of three statutory provisions enacted in the mid-1990s that authorize FSA to contract with the private sector to resolve delinquent loans.

GAO noted that: (1) the size of the Farm Service Agency's direct farm loan portfolio has decreased in recent years; (2) the outstanding principal on active farm loans totalled about $11.4 billion in September 1995, $10.5 billion in September 1996, and $9.7 billion in September 1997; (3) the percentage of the portfolio held by delinquent borrowers--those who were at least 30 days past due on loan repayment--also decreased; (4) in September 1995, delinquent borrowers held 40.7 percent of the outstanding principal on direct farm loans; the delinquency rates for 1996 and 1997 were 34.2 percent and 28.2 percent, respectively; (5) FSA wrote off about $380 million for almost 2,000 borrowers in fiscal year (FY) 1997 through its debt settlement process, which essentially represents the agency's final resolution of unpaid loans and generally occurs after loan-security property has been liquidated; (6) previously, the agency has written off about $860 million and $780 million in (FY) 1996 and 1995, respectively; (7) of the more than $2 billion that was written off during the 1995-1997 period, most--81.5 percent--was written off with no payments to the agency by the borrowers at the time of debt settlement; (8) the extent of these write-offs underscores the high risks associated with the agency's farm loans; (9) to date, FSA has made only limited use of one of the three new loan-servicing authorities it was given in the mid-1990s; (10) specifically, it has contracted with private attorneys to obtain legal assistance in resolving delinquent farm loan accounts in two states and has no plans to expand its use in other states; (11) in regard to the other two authorities, FSA has not contracted with private lenders or with private collection agencies and is not actively considering such contracting; and (12) agency officials said they have not used these new contracting authorities more extensively because, among other things, they can obtain assistance from the Department of Justice and the Department of the Treasury or they can perform the servicing functions with their own personnel.

May 7, 2020

Apr 13, 2020

Dec 23, 2019

Dec 6, 2019

Nov 12, 2019

Oct 28, 2019

Sep 9, 2019

Jul 25, 2019

Jul 11, 2019

Jun 21, 2019

Looking for more? Browse all our products here