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AGRICULTURE DEPARTMENT - FARMERS HOME ADMINISTRATION - LOANS - NATURAL DISASTER EMERGENCY LOANS - ELIGIBILITY - CONSOLIDATED FARM AND RURAL DEVELOPMENT ACT IT IS CONCLUDED THAT FARMERS HOME ADMINISTRATION (FMHA) PRACTICE OF DETERMINING ELIGIBILITY FOR NATURAL DISASTER EMERGENCY LOANS. IS UNLAWFUL. IN WHICH AREA DESIGNATION REQUIREMENT WAS ABOLISHED. IN COUNTIES IN WHICH MORE THAN 25 FARMERS ARE AFFECTED BY DISASTER. FMHA'S CONDUCT OF PROGRAM IS CONTRARY TO LAW. WE AGREE THAT THE ADMINISTRATION IS CONDUCTING THE PROGRAM IN A MANNER WHICH IS INCONSISTENT WITH CONGRESSIONAL INTENT AND IN VIOLATION OF THE ACT. YOU ARE CONCERNED THAT THE ADMINISTRATION MAY BE ADMINISTERING THE LOAN PROGRAM CONTRARY TO THE LETTER AND INTENT OF THE PROVISIONS OF ITS AUTHORIZING LEGISLATION.

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B-197765, JANUARY 10, 1983, 62 COMP.GEN. 116

AGRICULTURE DEPARTMENT - FARMERS HOME ADMINISTRATION - LOANS - NATURAL DISASTER EMERGENCY LOANS - ELIGIBILITY - CONSOLIDATED FARM AND RURAL DEVELOPMENT ACT IT IS CONCLUDED THAT FARMERS HOME ADMINISTRATION (FMHA) PRACTICE OF DETERMINING ELIGIBILITY FOR NATURAL DISASTER EMERGENCY LOANS, AUTHORIZED UNDER 7 U.S.C. 1961 ET SEQ., ON COUNTY-WIDE RATHER THAN INDIVIDUAL CROP LOSSES, IS UNLAWFUL. LEGISLATIVE HISTORY OF AMENDMENT TO 7 U.S.C. 1961, IN WHICH AREA DESIGNATION REQUIREMENT WAS ABOLISHED, PUB. L. 95-334, SEC. 118, 92 STAT. 426 (AUG. 4, 1978), CLEARLY INDICATES THAT CONGRESS INTENDED THAT PROGRAMS BE MADE AVAILABLE TO FARMERS ON A CASE-BY-CASE BASIS. FURTHERMORE, THE SECRETARY OF AGRICULTURE HAS AN AFFIRMATIVE DUTY TO MAKE THE PROGRAMS AVAILABLE TO POTENTIAL FARM BORROWERS, AND SINCE UNDER CURRENT GUIDELINES, FARM BORROWERS, IN COUNTIES IN WHICH MORE THAN 25 FARMERS ARE AFFECTED BY DISASTER, CANNOT APPLY FOR LOANS UNLESS COUNTY- WIDE CROP LOSSES EXCEED 30 PERCENT, FMHA'S CONDUCT OF PROGRAM IS CONTRARY TO LAW.

TO THE HONORABLE THOMAS F. EAGLETON, COMMITTEE ON APPROPRIATIONS, UNITED STATES SENATE, JANUARY 10, 1983:

THIS RESPONDS TO YOUR LETTER DATED MAY 25, 1982, REQUESTING OUR OPINION ON WHETHER THE FARMERS HOME ADMINISTRATION (ADMINISTRATION) HAS BEEN UNLAWFULLY LIMITING THE AVAILABILITY OF NATURAL DISASTER EMERGENCY LOANS AUTHORIZED UNDER THE CONSOLIDATED FARM AND RURAL DEVELOPMENT ACT (7 U.S.C. 1013A, 1921 ET SEQ. (1976) (ACT)). IN YOUR VIEW, THE ADMINISTRATION'S PRACTICE OF BASING LOAN ELIGIBILITY ON COUNTY-WIDE, RATHER THAN INDIVIDUAL, CROP LOSSES THE ACT. YOU ASKED US TO REVIEW THE LOAN PROGRAM'S AUTHORIZING LEGISLATION AND ADVISE YOU AS TO THE LEGALITY OF THE ADMINISTRATION'S PRACTICE. AS EXPLAINED BELOW, WE AGREE THAT THE ADMINISTRATION IS CONDUCTING THE PROGRAM IN A MANNER WHICH IS INCONSISTENT WITH CONGRESSIONAL INTENT AND IN VIOLATION OF THE ACT.

YOU ARE CONCERNED THAT THE ADMINISTRATION MAY BE ADMINISTERING THE LOAN PROGRAM CONTRARY TO THE LETTER AND INTENT OF THE PROVISIONS OF ITS AUTHORIZING LEGISLATION, 7 U.S.C. 1961 ET SEQ. (1976). GENERALLY, UNDER THE PROGRAM, THE SECRETARY OF AGRICULTURE MAKES AND INSURES LOANS TO ESTABLISH FARMERS, RANCHERS, OR PERSONS ENGAGED IN AQUACULTURE (OR UNITED STATES BUSINESSES ENGAGED PRIMARILY IN FARMING, RANCHING OR AQUACULTURE) WHO HAVE SUFFERED PRODUCTION LOSSES AS A RESULT OF HAVING BEEN AFFECTED BY A NATURAL DISASTER OR BY A MAJOR DISASTER OR EMERGENCY DESIGNATED BY THE PRESIDENT. 7 U.S.C. 1961(A).

7 U.S.C. 1970, PROVIDES THAT:

(THE SECRETARY SHALL MAKE FINANCIAL ASSISTANCE UNDER THIS SUBCHAPTER AVAILABLE TO ANY APPLICANT SEEKING ASSISTANCE BASED ON PRODUCTION LOSSES IF THE APPLICANT SHOWS THAT A SINGLE ENTERPRISE WHICH CONSTITUTES A BASIC PART OF THE APPLICANTS' FARMING, RANCHING, OR AQUACULTURE OPERATION HAS SUSTAINED AT LEAST A 30 PER CENTUM LOSS OF NORMAL PER ACRE OR PER ANIMAL PRODUCTION OR SUCH LESSER PER CENTUM OF LOSS AS THE SECRETARY MAY DETERMINE AS AMENDED BY PUB. L. 97-35 SEC. 163, APPROVED AUGUST 13, 1981, 95 STAT. 378, AS A RESULT OF A DISASTER * * * .

YOUR UNDERSTANDING IS THAT THE ADMINISTRATION DENIES INDIVIDUAL FARMERS EMERGENCY LOANS UNLESS COUNTY-WIDE LOSSES EXCEED 30 PERCENT OF NORMAL PRODUCTION IN CASES WHERE MORE THAN 25 FARMERS HAVE BEEN AFFECTED BY A DISASTER. (IF FEWER THAN 25 FARMERS SUSTAIN LOSSES, APPLICATIONS FOR ASSISTANCE ARE CONSIDERED BY AGRICULTURE ON AN INDIVIDUAL BASIS.)

IN YOUR VIEW, 7 U.S.C. 1970 DIRECTS THE SECRETARY TO CONSIDER EACH FARMER'S CROP REDUCTION INDIVIDUALLY WHEN DETERMINING IF THE 30 PERCENT PRODUCTION LOSS ELIGIBILITY REQUIREMENT HAS BEEN MET IN CASES WHERE MORE THAN 25 FARMERS ARE AFFECTED. ANY APPLICANT MEETING THE 30 PERCENT TEST SHOULD BE CONSIDERED FOR A LOAN REGARDLESS OF THE PERCENTAGE OF CROP LOSS OF OTHERS IN HIS COUNTY, UNDER YOUR READING OF SECTION 1970. THE ADMINISTRATION'S PRACTICE, HOWEVER, PREVENTS INDIVIDUAL FARMERS FROM APPLYING FOR LOANS WHERE MORE THAN 25 FARMERS IN A COUNTY ARE AFFECTED EVEN THOUGH THEY HAVE SUFFERED A 30 PERCENT CROP REDUCTION IF COUNTY-WIDE LOSSES DO NOT AVERAGE 30 PERCENT.

UPON RECEIVING YOUR INQUIRY, WE ASKED THE SECRETARY OF AGRICULTURE FOR HIS COMMENTS ON THE ISSUES YOU RAISE. HIS RESPONSE INDICATES THAT YOUR UNDERSTANDING OF THE ADMINISTRATION'S PRACTICE IS ESSENTIALLY CORRECT, ALTHOUGH THE DEPARTMENT DESCRIBES IT IN A SLIGHTLY DIFFERENT WAY. THE ADMINISTRATION'S PROCEDURE WHEN A NATURAL DISASTER OCCURS IS TO DETERMINE WHETHER A COUNTY HAS SUFFERED A 30 PERCENT LOSS, AND IF SO THE SECRETARY DESIGNATES IT AS A DISASTER RELIEF AREA. UPON SUCH DESIGNATION, THE FARMERS WITHIN THE COUNTY MAY APPLY FOR LOANS INDIVIDUALLY. HOWEVER, FARMERS NOT IN A DESIGNATED COUNTY MAY NOT RECEIVE ASSISTANCE, UNLESS THERE ARE FEWER THAN 25 FARMS IN THE COUNTY WHICH HAVE SUFFERED A 30 PERCENT LOSS. THE AREA DESIGNATION PROCEDURE IS PRESCRIBED BY REGULATION. 7 CFR 1945.20 (1982). A GUIDELINE ESTABLISHED BY THE SECRETARY SETS FORTH THE REQUIREMENTS THAT A DESIGNATION BE MADE ON THE BASIS OF COUNTY-WIDE LOSSES.

THE SECRETARY'S POSITION IS THAT DETERMINATION OF LOAN ELIGIBILITY ON A COUNTY-WIDE BASIS IS NOT CONTRARY TO THE CONSOLIDATED FARM AND RURAL DEVELOPMENT ACT. IN HIS VIEW, THE ACT GIVES THE SECRETARY SUFFICIENT DISCRETION IN ADMINISTERING THE EMERGENCY LOAN PROGRAM TO ALLOW THE DEPARTMENT TO USE THE COUNTY DESIGNATION PROCEDURE. 7 U.S.C. 1961, WHICH PROVIDES THE SECRETARY THE GENERAL AUTHORITY TO CONDUCT THE PROGRAM, STATES IN PERTINENT PART:

THE SECRETARY SHALL MAKE AND INSURE LOANS UNDER THIS SUBCHAPTER * * * TO (1) ESTABLISH FARMERS, RANCHERS, OR PERSONS ENGAGED IN AQUACULTURE * * * WHERE THE SECRETARY FINDS THAT THE APPLICANTS' FARMING, RANCHING, OR AQUACULTURE OPERATIONS HAVE BEEN SUBSTANTIALLY AFFECTED BY A NATURAL DISASTER IN THE UNITED STATES * * * .

WE RECOGNIZE THAT UNDER THE STATUTE THE SECRETARY IS AFFORDED A DEGREE OF LATITUDE IN ADMINISTERING THE EMERGENCY LOAN PROGRAM. HOWEVER, THE SECRETARY DOES NOT HAVE THE DISCRETION TO ESTABLISH A PROCEDURE, SUCH AS MAKING AN AREA DESIGNATION BASED ON COUNTY-WIDE LOSSES, WHICH, SYSTEMATICALLY EXCLUDES THOSE FARMERS WHICH THE CONGRESS INTENDED THE PROGRAM TO BENEFIT.

THE LEGISLATIVE HISTORY OF SECTION 1961 INDICATES THAT CONGRESS DOES NOT INTEND THAT THE ADMINISTRATION FOLLOW AN AREA DESIGNATION PROCEDURE IN CONDUCTING THE NATURAL DISASTER EMERGENCY LOAN PROGRAM. BEFORE AMENDMENT IN 1978, SECTION 1961 SPECIFIED THAT THE SECRETARY WAS REQUIRED TO DESIGNATE EMERGENCY AREAS AND MAKE LOANS IN SUCH AREAS IF HE FOUND THAT A NATURAL DISASTER HAD OCCURRED IN THAT AREA WHICH HAD SUBSTANTIALLY AFFECTED FARMING. HOWEVER, IN 1978, CONGRESS AMENDED SECTION 1961 BY DELETING THE AREA DESIGNATION REQUIREMENT. (PUBLIC LAW NO. 95-334, SEC. 118, 92 STAT. 426 APPROVED AUGUST 4, 1978). CONGRESS ALTERED SECTION 1961'S LANGUAGE TO ITS CURRENT FORM, QUOTED ABOVE. THE PROVISION DELETING THE REQUIREMENT WAS A SENATE FLOOR AMENDMENT TO THE SENATE'S VERSION OF THE BILL WHICH WAS LATER ENACTED AS THE AGRICULTURE CREDIT ASSISTANCE ACT OF 1978. SENATOR ALLEN, CHAIRMAN OF THE SUBCOMMITTEE ON AGRICULTURE CREDIT AND RURAL ELECTRIFICATION, OFFERED THE AMENDMENT, APPARENTLY ON THE RECOMMENDATION OF THE FARMERS HOME ADMINISTRATION. 124 CONG.REC.S 12139 (DAILY ED. MAY 2, 1978) (REMARKS OF SEN. ALLEN). HE EXPLAINED THE AMENDMENT'S PURPOSE AS FOLLOWS:

THE PURPOSE OF THIS AMENDMENT, WHICH CONTAINS ALL THE PRESENT PROVISIONS IN SECTION 114, IS TO GIVE THE SECRETARY OF AGRICULTURE GREATER DISCRETION IN MAKING AVAILABLE EMERGENCY LOANS. IT WILL PERMIT THE SECRETARY TO ADOPT REVISED PROCEDURES THAT WOULD MAKE EMERGENCY LOANS MORE READILY AVAILABLE TO FARMERS, RANCHERS, AND AQUACULTURE OPERATORS AFTER THE OCCURRENCE OF A NATURAL DISASTER, THEREFORE MAKING ASSISTANCE AVAILABLE TO DISASTER VICTIMS ON A MORE TIMELY BASIS. ID. AT S 12139 THE EXPLANATION OF THE CONFERENCE COMMITTEE CHAIRMAN, SENATOR TALMADGE, DURING THE SENATE'S CONSIDERATION OF THE CONFERENCE REPORT ALSO INDICATES THAT CONGRESS INTENDED THAT THE ADMINISTRATION DETERMINE DISASTER LOAN ELIGIBILITY ON AN INDIVIDUAL BASIS. SENATOR TALMADGE SAID:

IN THE PAST, THE EMERGENCY LOAN PROGRAM COULD NOT BE PUT INTO EFFECT WITHOUT GOING THROUGH THE PROCESS OF HAVING AN ENTIRE COUNTY DECLARED A DISASTER, UNDER THIS BILL, THE EMERGENCY PROGRAM ADMINISTERED BY THE FARMERS HOME ADMINISTRATION CAN BE MADE AVAILABLE TO INDIVIDUAL FARMERS ON A CASE-BY-CASE BASIS. THIS IS A SIGNIFICANT IMPROVEMENT OVER THE EXISTING LAW. 124 CONG.REC.S 21996 (DAILY ED. JULY 20, 1978) (REMARKS OF SENATOR TALMADGE). FURTHER, REPRESENTATIVE JONES, CHAIRMAN OF THE HOUSE OF REPRESENTATIVES AGRICULTURE COMMITTEE'S SUBCOMMITTEE ON CONSERVATION AND CREDIT, DURING THE HOUSE OF REPRESENTATIVE'S CONSIDERATION OF THE CONFERENCE REPORT STATED:

ANOTHER CHANGE WHICH SHOULD GO A LONG WAY TO REDUCING FRUSTRATIONS OF FARMERS AND THEIR CONGRESSMEN IS NATURAL DISASTER SITUATIONS. ONE OF THE FIRST ACTIONS I TOOK AS CHAIRMAN OF THE SUBCOMMITTEE ON CONSERVATION AND CREDIT WAS TO HOLD HEARINGS ON OUR EMERGENCY PROGRAMS ESPECIALLY AS THEY WERE OPERATING UNDER THE DROUGHT CONDITIONS. THIS BILL MAKES SOME CHANGES IN THE FMHA DISASTER LOAN PROGRAM WHICH WILL MAKE IT OPERATE MUCH MORE EFFECTIVELY.

THE SECRETARIAL EMERGENCY DESIGNATION WOULD NO LONGER BE REQUIRED IN ORDER TO MAKE DISASTER LOANS TO FARMERS. INSTEAD EMERGENCY LOANS WOULD BE MADE WHEN THE APPLICANT'S FARMING, RANCHING, OR AQUACULTURE OPERATIONS HAVE BEEN SUBSTANTIALLY AFFECTED BY A NATURAL DISASTER IN THE UNITED STATES OR BY A MAJOR DISASTER. I FEEL THIS SIMPLIFIED PROCEDURES WILL END A LOT OF THE PROBLEMS WITH THIS PROGRAM. 124 CONG.REC.H 21752 (DAILY ED. JULY 20, 1978) (REMARKS OF REP. JONES). FOR OTHER PORTIONS OF THE LEGISLATIVE HISTORY OF SECTION 1961 WHICH INDICATE THAT CONGRESS INTENDED THAT THE SECRETARY ADMINISTER THE PROGRAM ON AN INDIVIDUAL BASIS, SEE 124 CONG.REC.H 21749 (DAILY ED. JULY 19, 1978) (REMARKS OF REP. FOLEY), 124 CONG.REC.S 21998 (DAILY ED. JULY 20, 1978) (STAFF SUMMARY OF CONFERENCE SUBSTITUTE); AND THE JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE, REPRINTED IN THE U.S.C. CONG. AND ADMIN. NEWS AT 1185, 1186 (1978).

THE CITED LEGISLATIVE HISTORY SHOWS THAT CONGRESS BELIEVED THAT THE DISASTER LOAN PROGRAM WOULD OPERATE MORE EFFECTIVELY IF THE AREA DESIGNATION REQUIREMENT WAS ABOLISHED. ACCORDINGLY, IN LIGHT OF THE LEGISLATIVE HISTORY DISCUSSED ABOVE, IT IS CLEAR THAT CONGRESS INTENDED THAT THE ADMINISTRATION STOP FOLLOWING THE AREA DESIGNATION PROCEDURE AND BEGIN DETERMINING DISASTER LOAN ELIGIBILITY ON A CASE-BY-CASE BASIS AFTER THE 1978 AMENDMENT TO 7 U.S.C. 1961.

THE SECRETARY CONTENDS THAT NOTWITHSTANDING THIS LEGISLATIVE HISTORY, THE ACT GIVES HIM SUFFICIENT DISCRETION TO CONTINUE TO USE THE COUNTY DESIGNATION PROCEDURE. HE READS 7 U.S.C. 1961 AS SETTING FORTH THE BASIC ELIGIBILITY CRITERIA FOR EMERGENCY LOANS. HE CONTENDS THAT 7 U.S.C. 1989, WHICH AUTHORIZES HIM TO MAKE REGULATIONS AND TO PRESCRIBE CONDITIONS FOR MAKING LOANS, PERMITS HIM TO "ISSUE REGULATIONS NECESSARY TO DEFINE A NATURAL DISASTER ALONG WITH ESTABLISHING GUIDELINES AS TO THE MANNER OF DETERMINING WHETHER OR NOT AN AREA IS SUBSTANTIALLY AFFECTED BY SUCH A NATURAL DISASTER." THE SECRETARY ALSO ACKNOWLEDGES THAT UNDER HIS INTERPRETATION OF 7 U.S.C. 1989 HE HAS THE DISCRETION TO MAKE LOANS AVAILABLE TO INDIVIDUAL FARMERS. HE INFORMS US, HOWEVER, THAT THE DEPARTMENT HAS CONCLUDED THAT THE CONTINUED USE OF THE COUNTY DESIGNATION PROCESS IS NECESSARY FOR "ADMINISTRATIVE CONVENIENCE."

THE PROVISIONS OF 7 U.S.C. 1961 ARE MANDATORY, NOT PERMISSIVE; THE SECRETARY MAY NOT IGNORE THE SECTION'S DIRECTIVES. IN BERENDS V. BUTZ, 357 F.SUPP. 143, 150 (1973), THE SECRETARY OF AGRICULTURE MADE A SIMILAR ARGUMENT TO JUSTIFY TERMINATING AN EMERGENCY LOAN PROGRAM UNDER THE PREVIOUS VERSION OF THIS ACT. THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MINNESOTA STATED:

"SHALL" IS MANDATORY LANGUAGE * * * THE LANGUAGE IN THE STATUTES AND REGULATIONS RELIED ON BY PLAINTIFFS IS NOT OF A PERMISSIVE NATURE, BUT AFFIRMATIVELY DIRECTS DEFENDANTS TO PERFORM. WHEREAS THE SECRETARY MAY HAVE A GREAT DEAL OF DISCRETION IN THE ADMINISTRATION OF EMERGENCY LOANS, HE HAS NO LICENSE TO ACT IN VIOLATION OF MANDATORY LANGUAGE OF STATUTORY LAWS OR AGENCY REGULATIONS. ID. AT 150. SEE ALSO DUBROW V. SMALL BUSINESS ADMINISTRATION, 345 F.SUPP. 4 (D. CAL. 1972) WHERE THE RIGHT TO APPLY FOR SMALL BUSINESS ADMINISTRATION DISASTER LOANS WAS AT ISSUE. THE GOVERNMENT CONTENDED THAT UNDER THE DISASTER RELIEF ACT OF 1972, THE AGENCY HAD ABSOLUTE DISCRETION TO DETERMINE WHETHER OR NOT TO MAKE A LOAN. THE COURT STATED:

WHATEVER THE LIMITS ON THIS COURT'S AUTHORITY TO REVIEW DENIAL OF AN APPLICATION, THEY DO NOT PRECLUDE JUDICIAL REVIEW WHEN THE SBA HAS REFUSED TO FOLLOW ITS STATUTORY DUTY TO DETERMINE WHETHER THE LOAN TO A GIVEN APPLICANT IS NECESSARY OR APPROPRIATE. ID. AT 8, 9.

ACCORDINGLY, AS SUBSECTION (A) STATES, IF THE SECRETARY FINDS THAT AN APPLICANT'S FARMING OPERATIONS, AS OPPOSED TO DESIGNATED AREAS, HAVE BEEN SUBSTANTIALLY AFFECTED BY A NATURAL DISASTER, HE MUST MAKE OR INSURE A LOAN IN ACCORDANCE WITH THE PROGRAM'S AUTHORIZING PROVISIONS (ASSUMING AVAILABLE FUNDS AND THAT THE SECRETARY DETERMINES THAT THE APPLICANT IS OTHERWISE ELIGIBLE.) HE MAY NOT CONDUCT THE PROGRAM UNDER A POLICY WHICH SYSTEMATICALLY EXCLUDES INDIVIDUAL FARMERS MADE ELIGIBLE FOR LOANS BY THE STATUTE.

IN OUR VIEW, THE SECRETARY'S COUNTY DESIGNATION POLICY COULD OPERATE TO FRUSTRATE THE ACT'S CLEAR MANDATE THAT ALL QUALIFIED FARMERS WHO HAVE SUFFERED THE REQUISITE MINIMUM LOSS OF 30 PER CENT BE ELIGIBLE FOR A DISASTER LOAN. HOWEVER, THE SECRETARY'S POLICY WOULD ARBITRARILY EXCLUDE FROM CONSIDERATION, REGARDLESS OF THE EXTENT OF HIS LOSS, A FARMER WHO HAPPENS TO LIVE IN A COUNTY WHERE AT LEAST 25 OF HIS FELLOW FARMERS ARE AFFECTED BY A NATURAL DISASTER BUT WHERE THE AVERAGE LOSS, COUNTY-WIDE, FELL A LITTLE SHORT OF 30 PER CENT. THE GUIDELINE THE SECRETARY USES TO DETERMINE WHAT CONSTITUTES A SUBSTANTIAL LOSS IS SET FORTH IN THE 1982 EMERGENCY OPERATIONS HANDBOOK FOR USDA STATE AND COUNTY EMERGENCY BOARDS. UNDER THE GUIDELINE, A SUBSTANTIAL LOSS IS DEFINED AS, "AT LEAST 30 PERCENT DOLLAR LOSS TO ALL CASH CROPS GROWN IN THE COUNTY DURING THE DISASTER YEAR." CONCEIVABLY, THERE MAY BE COUNTIES WHERE A NATURAL DISASTER HAS AFFECTED MORE THAN 25 FARMERS, BUT THE COUNTY-WIDE PRODUCTION LOSS IS UNDER 30 PERCENT. FARMERS WHO HAVE SUFFERED INDIVIDUAL LOSSES GREATER THAN THE 30 PERCENT PRESCRIBED BY 7 U.S.C. 1970 WOULD THUS BE AUTOMATICALLY PRECLUDED FROM APPLYING FOR LOANS. A FARMER RESIDING IN A DESIGNATED COUNTY WHO HAS SUFFERED A 30 PERCENT LOSS COULD GET A LOAN, WHILE HIS NEIGHBOR RESIDING IN A NON DESIGNATED COUNTY, WHO HAS SUFFERED A MUCH GREATER LOSS COULD NOT APPLY FOR ASSISTANCE BECAUSE THE LOSSES IN HIS COUNTY, SUFFERED BY MORE THAN 25 FARMERS, DID NOT MEET THE SECRETARY'S GUIDELINE.

ACCORDINGLY, IN OUR OPINION, THE SECRETARY'S GUIDELINE WHICH PROVIDES IN EFFECT THAT HE MAKE HIS DETERMINATION TO ACCEPT APPLICATIONS ON WHETHER MORE THAN 25 FARMERS HAVE SUFFERED SUBSTANTIAL LOSSES BASED UPON COUNTY- WIDE LOSSES IS INCONSISTENT WITH THE LEGAL REQUIREMENT THAT HE MAKE THE PROGRAM AVAILABLE TO ALL WHO MAY QUALIFY. THE DEFICIENCY COULD BE CURED, AMONG OTHER WAYS, IF HIS POLICY WAS TO MAKE DESIGNATIONS IN COUNTIES WHERE HE FOUND THAT MORE THAN 25 FARMERS HAD SUFFERED AT LEAST A 30 PERCENT LOSS INSTEAD OF REQUIRING A COUNTY WIDE LOSS OF 30 PERCENT. IN THAT WAY THE PROGRAM WOULD BE AVAILABLE TO ALL FARMERS-- BY COUNTY DESIGNATION IN COUNTIES WHERE MORE THAN 25 FARMERS HAVE BEEN AFFECTED BY A NATURAL DISASTER, AND BY FMHA STATE DIRECTOR AUTHORIZATION IN COUNTIES WHERE 25 OR FEWER FARMERS HAVE BEEN AFFECTED.

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