Debt Restructuring Activities During the 1984-85 Farm Credit Crisis

In response to congressional requests, GAO reported on the Farmers Home Administration's (FmHA) debt restructuring activities with private lenders during the farm credit crisis of 1984 and 1985.

GAO found that, during the farm credit crisis, FmHA helped farmers by: (1) making direct loans to new borrowers who could not get necessary credit elsewhere; and (2) offering loan guarantees to private lenders for loans made to family farmers who did not participate in FmHA programs and who were generally having financial difficulty and might not qualify for the loans without federal guarantees. GAO also found that FmHA: (1) used farm operating and ownership loans to assist private lenders to help farmers restructure their debt; (2) helped 45,000 of its 270,000 existing borrowers restructure their FmHA debt in fiscal year 1985 through reamortization, rescheduling, and debt waivers; and (3) provided debt restructuring assistance through regular and debt adjustment program guaranteed loans and direct loans.