[Senate Hearing 108-112]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 108-112

                       NOMINATION HEARING TO THE
      BOARD OF DIRECTORS FEDERAL AGRICULTURAL MORTGAGE CORPORATION

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                                HEARING

                               before the

                       COMMITTEE ON AGRICULTURE,
                        NUTRITION, AND FORESTRY

                          UNITED STATES SENATE


                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION


                               __________

                              MAY 15, 2003

                               __________

                       Printed for the use of the
           Committee on Agriculture, Nutrition, and Forestry


  Available via the World Wide Web: http://www.agriculture.senate.gov


                                 ______

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                            WASHINGTON : 2003
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           COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY



                  THAD COCHRAN, Mississippi, Chairman

RICHARD G. LUGAR, Indiana            TOM HARKIN, Iowa
MITCH McCONNELL, Kentucky            PATRICK J. LEAHY, Vermont
PAT ROBERTS, Kansas                  KENT CONRAD, North Dakota
PETER G. FITZGERALD, Illinois        THOMAS A. DASCHLE, South Dakota
SAXBY CHAMBLISS, Georgia             MAX BAUCUS, Montana
NORM COLEMAN, Minnesota              BLANCHE L. LINCOLN, Arkansas
MICHEAL D. CRAPO, Idaho              ZELL MILLER, Georgia
JAMES M. TALENT, Missouri            DEBBIE A. STABENOW, Michigan
ELIZABETH DOLE, North Carolina       E. BENJAMIN NELSON, Nebraska
CHARLES E. GRASSLEY, Iowa            MARK DAYTON, Minnesota

                 Hunt Shipman, Majority Staff Director

                David L. Johnson, Majority Chief Counsel

               Lance Kotschwar, Majority General Counsel

                      Robert E. Sturm, Chief Clerk

                Mark Halverson, Minority Staff Director

                                  (ii)

  
                            C O N T E N T S

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                                                                   Page

Hearing(s):

Nomination Hearing to the Board of Directors Federal Agricultural 
  Mortgage Corporation...........................................    01

                              ----------                              

                         Thursday, May 15, 2003
                    STATEMENTS PRESENTED BY SENATORS

Cochran, Hon. Thad, a U.S. Senator from Mississippi, Chairman, 
  Committee on Agriculture, Nutrition, and Forestry..............    01

                               WITNESSES

Bartling, Julia, Burke, South Dakota, to be a Member of the Board 
  of 
  Directors of the Federal Agricultural Mortgage Corporation.....    02
Junkins, Lowell, Donnelson, Iowa, to be a Member of the Board of 
  Directors of the Federal Agricultural Mortgage Corporation.....    02
Klippenstein, Glen, Osborn, Missouri, to be a Member of the Board 
  of 
  Directors of the Federal Agricultural Mortgage Corporation.....    03
                              ----------                              

                                APPENDIX

Prepared Statements:
    Bond, Hon. Christopher.......................................    10
    Daschle, Hon. Thomas.........................................    11
    Klippenstein, Glen...........................................    14
    Talent, Hon. James...........................................    12
Document(s) Submitted for the Record:
    Bartling, Julia (Biographical Information)...................    18
    Junkins, Lowell (Biographical Information)...................    22
    Klippenstein, Glen (Biographical Information)................    29


 
  NOMINATIONS HEARING TO THE BOARD OF DIRECTORS, FEDERAL AGRICULTURAL 
                          MORTGAGE CORPORATION

                              ----------                              


                         THURSDAY, MAY 15, 2003

                                       U.S. Senate,
         Committee on Agriculture, Nutrition, and Forestry,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 11:20 a.m., in 
room S146-A, United States Capitol, Hon. Chad Cochran, 
[Chairman of the Committee], presiding.
    Present: Senators Cochran, Talent, Dole, Harkin, and 
Daschle.

      STATEMENT OF HON. THAD COCHRAN, A U.S. SENATOR FROM 
MISSISSIPPI, CHAIRMAN, COMMITTEE ON AGRICULTURE, NUTRITION, AND 
                            FORESTRY

    The Chairman. The committee will please come to order.
    We are pleased today to convene a meeting of our Committee 
on Agriculture for the purpose of reviewing nominations to the 
Federal Agricultural Mortgage Corporation. The three nominees 
are Lowell Junkins of Iowa, who is being reappointed to the 
Board; Julia Bartling of South Dakota, who is to be a new 
member of the Board; and Glen Klippenstein of Missouri, who is 
also nominated to be a new member of the Board.
    The committee is required to administer an oath to all 
nominees before commencing the hearing on your nominations, so 
if you will please stand and raise your right hand.
    [Nominees sworn.]
    Thank you. You may be seated.
    I know Senator Dole had come to the meeting earlier and is 
probably voting upstairs again, as we are conducting a series 
of roll call votes, as you already know. Senators may come and 
go, and some may be unable to attend the hearing because of 
those votes that are going on.
    There are statements that have been given to me for the 
record. Senator Bond has advised us he will not be able to 
attend the hearing to introduce Mr. Klippenstein, but he has 
submitted a statement and would like it entered into the 
record.
    [The prepared statement of Senator Bond can be found in the 
appendix on page 10.]
    The Chairman. Senator Daschle has also indicated that he 
has a statement in introducing Ms. Bartling, and that statement 
will be included in the record as well.
    [The prepared statement of Senator Daschle can be found in 
the appendix on page 11.]
    The Chairman. Let me ask each of you if you can agree that 
you will appear before any duly constituted committee of 
Congress, if asked to appear?
    Mr. Klippenstein. Yes, sir.
    Mr. Junkins. Yes sir.
    Ms. Bartling. Yes, sir.
    The Chairman. The statute that created Farmer Mac--and I'm 
not sure we need to call it that, but the ``Board'' is what I 
prefer to call it--the Board, requires that at least two of the 
Presidential nominees to the Board be experienced in farming 
and ranching. We are pleased to note today that all three of 
the nominees before the committee have some agricultural 
experience.
    Let me start with Ms. Bartling and ask you to tell the 
committee what your background and experience is that will be 
helpful to you in carrying out your duties as a member of this 
Board.

   STATEMENT OF JULIA BARTLING, BURKE, SOUTH DAKOTA, TO BE A 
            MEMBER OF THE BOARD OF DIRECTORS OF THE 
           FEDERAL AGRICULTURAL MORTGAGE CORPORATION

    Ms. Bartling. Thank you, Senator.
    My background, I was born and raised on a farm in South 
Dakota, south-central South Dakota. I continue to work with my 
husband in farming and ranching for those years. My husband and 
I also own an ag-related business, a feeding and grain business 
and a trucking operation. We deal strictly with agriculture. We 
haul livestock grain, feed commodities, et cetera, in our area 
and the upper Midwest. My background is not only in helping my 
parents growing up in South Dakota, but with my husband.
    I am very familiar with the struggles of agriculture, as 
well as the good times in agriculture.
    I am also an elected State Representative in the State of 
South Dakota, from District 21 now. I serve on the 
appropriations committee, as well as I am a delegate from South 
Dakota for a 2-year period to the National Conference of State 
Legislators Budgets and Reviews. In South Dakota, agriculture 
is our No. 1 industry and we are very concerned about the 
survival of it in our State. I do feel that my background, 
personally as well as professionally, will aid me in my serving 
on this board.
    Thank you, sir.
    The Chairman. Thank you.
    Mr. Junkins, you heard the question that I raised. What is 
your response about your background or experience that, in your 
judgment, would be helpful to you as you serve as a member of 
this Board?

 STATEMENT OF LOWELL JUNKINS, DONNELLSON, IOWA, TO BE A MEMBER 
               OF THE BOARD OF DIRECTORS OF THE 
           FEDERAL AGRICULTURAL MORTGAGE CORPORATION

    Mr. Junkins. Mr. Chairman, my father and I started in the 
mid-sixties in the machinery business, growing up in a small 
community of about 800 people in southeastern rural Iowa. My 
initial connection, of course, was to come from a small 
community, which was an agriculture community, and then working 
in the machinery, equipment, trucking, tractor business. From 
that, we ended up in partnerships with the farm and we've been 
farming since the early eighties.
    From 1973 until 1985, I served in the Iowa Senate. I served 
as the Minority Leader as well as the Majority Leader. Mixing 
the ability for us to have some sense of how the public side of 
the equation works, and the interest that you all and others 
might have, being able to relate to the kinds of challenges 
that you have, and mixing that with the business side of what 
we do with farmers and ranchers and having the experience, as 
both a farmer in this particular case as well as a business 
person in the farming area are the strengths that we bring to 
the company. Thank you.
    The Chairman. Mr. Klippenstein, you heard my question of 
Ms. Bartling and Mr. Junkins. What is your response in your 
case?

   STATEMENT OF GLEN KLIPPENSTEIN, OSBORN, MISSOURI, TO BE A 
            MEMBER OF THE BOARD OF DIRECTORS OF THE 
           FEDERAL AGRICULTURAL MORTGAGE CORPORATION

    Mr. Klippenstein. My response is that I've been at it 
longer than these people, as you can tell.
    I started in Saskatchewan, Canada, and from the first time 
that I saw a calf wag its tail when I was giving it milk, I was 
hooked on livestock and cattle. Then we subsequently moved to 
Pennsylvania for educational purposes and farmed there--my 
parents did. I went to Penn State University and majored in 
animal science, was on livestock judging teams, and all kinds 
of extracurricular activities and was chairman of several 
committees. Those kinds of things I was drawn to.
    Then we moved to Missouri and started a seed stock 
operation. I raised Hereford and Angus bulls, and sold about 
7,000 bulls over the years. A lot of bulls.
    Among other things, the Dixie National in Jackson, MS was 
one of my favorite places--well, it was my favorite place 
because I won more championships there and dug more gold out of 
those hills than I did anywhere else. I'm appreciative, sir.
    Then, after selling bulls, semen and frozen embryos to lots 
of countries in the world, and every State, it's been an 
extraordinary ride, really. We're cutting down on our farming 
and ranching activities now. I'm terribly passionate about it 
and all the energy I've given it, being a State Senator in 
Missouri was partially in order to promote, in my view, 
agriculture, although I always felt safer, better, behind the 
tail of a cow than I did behind the tail of a...yes.
    [Laughter.]
    At any rate, it is a passion of mine and I believe that 
this instrument that we commonly call Farmer Mac, the Federal 
Ag Mortgage Corporation, can be another instrument to help in 
ways to, if not reestablish, but certainly to keep rural 
America more healthy. That's what my purpose is for having 
assumed, hopefully, this task.
    The Chairman. The major reasons for the creation of Farmer 
Mac were to free up rural capital and make credit more 
available and less costly.
    Do you think Farmer Mac has had that effect, and if so, to 
what extent?
    Mr. Klippenstein. That's something that I don't know if I 
could quantify, but yes. You know, it's amazing to me, when you 
do math, as a statistician, how much a little can do sometimes. 
The dollar loaned by Farmer Mac are relatively little compared 
to the whole, but it impacts in an almost exponential way. I 
would say the positive impact has been greater than what might 
initially meet the eye, when you just look at the raw figures.
    The Chairman. Mr. Junkins, what's your reaction to that 
question?
    Mr. Junkins. Mr. Chairman, I believe it has served a 
purpose and continues to serve a purpose. There will be peaks 
and valleys as to the value of instruments like Farmer Mac, 
depending upon what the overall economy looks like. Even during 
the times when we've had reduced interest rates, thereby the 
margins being narrower, clearly, and maybe not as much pressure 
on competition to keep their rates low, it's ultimately what is 
going to benefit farmers and ranchers.
    Farmer Mac provides that kind of competition in the system 
that allows you to have rates that are available in the 
secondary market that will beat or exceed rates that financial 
institutions might find in other places. On a competitive 
basis, it clearly is having an impact.
    If we begin to see those rates creep back up, as everybody 
feels they've got to go north at some point, the value of 
Farmer Mac increases during those periods of time, because 
those margins will obviously be greater and there will be a 
better incentive for people to either utilize Farmer Mac or 
Farmer Mac being in the system and creating competition that 
tends to hold down rates to farmers and ranchers.
    The Chairman. Ms. Bartling, you have a chance to respond to 
that question as well.
    Ms. Bartling. Thank you, Senator.
    Well, it's very difficult to followup on two excellent 
answers because they basically said what we all feel. Farmer 
Mac has been there and are very strong advocates in aiding the 
farming and ranching communities across the country.
    I do feel that, especially in our small town banks across 
the country, they are another source that they can go to to 
assist in finding financial aid for farmers and ranchers as 
they continue to struggle and reach for those opportunities to 
grow. I do believe that Farmer Mac has been strong, and I do 
believe it will continue to be strong in light of our economy 
and in looking at our economy.
    The Chairman. There are 15 members of the Farmer Mac Board. 
Five are selected by financial institutions, five are selected 
by the Farm Credit System, and five are nominated by the 
President. According to the statute, the five Presidential 
nominees are to be representatives of the general public.
    How do you view your responsibilities as a Board member and 
how would you try to represent the general public? I'll ask you 
that, Ms. Bartling.
    Ms. Bartling. Thank you, Senator.
    As a Presidential nominee, I believe, as you have just 
stated, the duties to represent the public are the primary 
interests and goals of those individuals. As a nominee, working 
not only in private industry for the years that I have, but 
also in the public eye, I know that that is going to be a very 
important aspect. I certainly will be available to help in any 
way that I can and bring forth the concerns from the small 
farmers and ranchers across the country that have interests and 
concerns in bring their support to the Board.
    The Chairman. Mr. Junkins, do you feel that you're 
qualified to represent the interests of the general public?
    Mr. Junkins. If I didn't believe it, I would tell you 
``yes'' anyway.
    [Laughter.]
    I happen to believe it, so there's no problem.
    My experience in Farmer Mac has really allowed me to make 
me feel better about answering this question today than I did 
five or 6 years ago. Congress was very insightful when they 
mixed the various players as they put together the Farmer Mac 
Corporation.
    A lot of expertise comes out of the Farm Credit System, a 
lot of expertise comes out of the private side. Yet, at the 
same time, this GSE was put together by Congress to serve the 
public, not necessarily to serve those other two entities or 
the representatives from those entities. By putting five public 
members who, frankly, don't bring in most instances a lot of 
the financial skills, it really allows us to bring, I believe, 
the perspective that Congress intended. That is the perspective 
of feeling that we understand what you all meant in passing the 
statute, what you are attempting to accomplish. That's the 
strongest value that we, as public members, can bring to the 
Corporation, that our perspective is necessarily that of a 
broader interest, of a farmer, of a rancher, and not 
necessarily being tied into how do you run the day-to-day 
banking business of America.
    I have seen the other public members that I've served with, 
and I would like to believe that we contributed immensely 
toward conversations within the Corporation that really brought 
an added discussion, a broader discussion, about Farmer Mac, 
where it's going and what it's doing, than would have been 
otherwise the case if there wasn't the public membership. I 
believe we have contributed to that and we look forward to 
continuing to do that, Mr. Chairman.
    The Chairman. Mr. Klippenstein, do you feel that you're 
qualified to represent the interests of the general public?
    Mr. Klippenstein. Well, Mr. Chairman, I would respond that 
we're the public, all of us are the public, and if agriculture 
succeeds well, the rest of the public does as well. With this 
instrument we call Farmer Mac, if we're diligent to make sure 
that it stays healthy, then those who are the direct recipients 
of the potential benefits of Farmer Mac will be healthy, and 
then so will, to a greater extent, America. Yes, I believe I'm 
qualified to represent the public's interests.
    The Chairman. I don't have any further questions. There may 
be questions that other Senators may have. We have another vote 
that is now in the final stages on the floor of the Senate. I'm 
going to go vote, and we will keep the committee in session 
pending the arrival of other Senators. I will be right back. 
Until then, we will suspend the hearing.
    [Recess.]
    Senator Harkin. I again want to welcome all the nominees to 
the committee. I'm impressed with the group that we have 
assembled: an owner of a feed and grain business, feed and 
cattle industry, a former State Senator and economic 
development specialist, whom I have known for 20-some years 
now. Again, this represents the broad constituency that Farmer 
Mac serves.
    Farmer Mac provides important services in increasing the 
liquidity of farm and rural business loans. In simplest terms, 
Farmer Mac purchases these rural loans from rural lenders and 
the replenish the rural lenders' ability to lend to others.
    Our rural financial infrastructure has come to rely on this 
service, so it is vitally important that Farmer Mac have a 
well-qualified and effective Board so that the institution 
needs help. I know that we on this committee take seriously the 
need to make sure the Board members of Farmer Mac are qualified 
to serving on the governing board of this important 
institution. I welcome you all here.
    I was going to introduce Lowell Junkins, but since you've 
already met him, I will not introduce him again. My good 
friend, Lowell Junkins, has been renominated to the Farmer Mac 
Board. He served in this position since 1996. He also served 
the State of Iowa in a number of capacities, as city council 
member, mayor of Montrose, IA, State Senator for 12 years, 
distinguished himself in the State Senate, and is now involved 
in economic development in Lee County down in southeast Iowa.
    Given his broad experience, Lowell understands how 
important institutions like Farmer Mac are to rural 
communities. With the challenges that rural America faces, it 
needs a healthy credit sector to help fuel its development. I 
am glad that Lowell has agreed to continue to utilize his 
experience in this very important position. I'm really glad he 
decided to serve.
    Thank you very much.
    The Chairman. Senator, do you have any questions at all of 
the witnesses? I have asked questions of each witness and 
they've answer them very well.
    If you have questions, please proceed.
    Senator Harkin. If you're satisfied, I'm satisfied.
    [Laughter.]
    I don't think I have any more. Certainly you've asked 
questions about Farmer Mac and, with that, I don't know that I 
need to go through any more. As I said, I have looked at all 
the resumes, and for the people I don't know, I have read their 
backgrounds and it looks as if they're very well qualified to 
serve and will bring good expertise to this Board. I don't 
think I have any questions.
    The Chairman. I understand that Senator Talent had planned 
to present a statement in support of the nomination of Mr. 
Klippenstein. That will, of course, be printed in the record.
    [The prepared statement of Senator Talent can be found in 
the appendix on page 12.]
    [The prepared statement of Mr. Klippenstein can be found in 
the appendix on page 14.]
    The Chairman. Any other statements of Senators, or members 
of the committee, will be printed in the record. If they have 
questions to submit for the record, we hope you will respond to 
them within a reasonable time.
    If you have any additional material or statements that you 
would like to put in the record, you're welcome to submit those 
for the record as well.
    If there are no other questions of the witnesses, this will 
conclude the hearing.
    The Chairman. We appreciate very much your cooperation with 
our committee, and your patience this morning during this 
difficult period of scheduling and changing the locations for 
the hearing and all the rest that we've all had to deal with 
this morning. Thank you very much.
    This hearing is adjourned.
    [Whereupon, at 11:45 a.m., the committee adjourned.]
      
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                            A P P E N D I X

                              May 15, 2003



      
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                   DOCUMENTS SUBMITTED FOR THE RECORD

                              May 15, 2003



      
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