Limited-Resource Farmer Loans: More Can Be Done To Achieve Program Goals and Reduce Costs

Highlights

GAO reviewed the Farmers Home Administration (FmHA) program for providing low-interest rate loans to limited-resource farmers to determine whether more supervision and technical assistance were needed to achieve program goals and whether improvements were needed to control costs and safeguard against misuse of program funds.

Recommendations

Recommendations for Executive Action

Agency Affected	Recommendation	Status
Department of Agriculture	The Secretary of Agriculture should direct the FmHA Administrator to make more effective use of the resources available from other Department of Agriculture agencies by establishing formal working agreements and referral systems, by performing joint farm planning for existing and future limited-resource borrowers, and by reporting back to the Secretary on the progress and problems being encountered in obtaining such cooperation.	Closed Please call 202/512-6100 for additional information.
Department of Agriculture	The Secretary of Agriculture should direct the FmHA Administrator to revise FmHA instruction 1924-B to specify the priority to be given in supervising limited-resource borrowers.	Closed Please call 202/512-6100 for additional information.
Department of Agriculture	The Secretary of Agriculture should direct the FmHA Administrator to develop more appropriate technical aids or forms to encourage more effective long-range planning of a borrower's farm operation and in planning and carrying out farm visits.	Closed Please call 202/512-6100 for additional information.
Department of Agriculture	The Secretary of Agriculture should direct the FmHA Administrator to emphasize to FmHA county officials the importance of recording in the Farm and Home Plan the actual results of the annual farm operations.	Closed Please call 202/512-6100 for additional information.
Department of Agriculture	The Secretary of Agriculture should direct the FmHA Administrator to improve, to the extent possible, the FmHA internal control system in the limited-resource program by assuring that loan approval decisions are not made by those individuals responsible for processing the loan and documenting all the facts in support of loan approval.	Closed Please call 202/512-6100 for additional information.
Department of Agriculture	The Secretary of Agriculture should direct the FmHA Administrator to improve, to the extent possible, the FmHA internal control system in the limited-resource program by subjecting the county supervisor's decision to increase or continue present interest rates to review and concurrence by another individual or group.	Closed Please call 202/512-6100 for additional information.
Department of Agriculture	The Secretary of Agriculture should direct the FmHA Administrator to improve to the extent possible the FmHA internal control system in the limited-resource program by using the review functions to assure compliance with FmHA documentation requirements.	Closed Please call 202/512-6100 for additional information.
Department of Agriculture	The Secretary of Agriculture, in an effort to reduce subsidy costs, should direct the FmHA Administrator to seek legislation to permit the recapture of Federal subsidies on limited-resource farm ownership loans when the property is no longer farmed by the borrower, sold, or transferred.	Closed Please call 202/512-6100 for additional information.

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Topics

Agriculture and Food

Agricultural programsCost controlFarm income stabilization programsFinancial managementInterest ratesLoansMonitoringProgram evaluationProgram managementRecords management