Farmers Home Administration

This testimony is based primarily on two earlier GAO reports that concluded that most FmHA loans do not go to beginning farmers and that the impact of the 1990 Farm Bill, which adds beginning farmers to those given preference in purchasing FmHA properties, may be limited because (1) such properties are not always appropriate for them and (2) other individuals, such as former owners, have preference in purchasing properties. GAO testified that Congress, in its deliberations on ways to assist beginning farmers, needs to consider not only how to help people start farming but also how to help them successfully graduate to commercial credit sources. GAO is concerned that beginning farmers are likely to get on the same loan-making and loan-servicing treadmill that many of FmHA's clients have been on for many years. Congress also needs to consider the implications of how a beginning farmer is defined from a federal assistance standpoint. This will determine the number of people qualifying for such targeted federal aid. FmHA has proposed a definition allowing individuals who have farmed for up to 10 years to be considered "beginning farmers."