[Senate Hearing 110-747]
[From the U.S. Government Publishing Office]
S. Hrg. 110-747
NOMINATION HEARING TO
THE FARM CREDIT ADMINISTRATION
=======================================================================
HEARING
before the
COMMITTEE ON AGRICULTURE,
NUTRITION, AND FORESTRY
UNITED STATES SENATE
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
__________
SEPTEMBER 24, 2008
__________
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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COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY
TOM HARKIN, Iowa, Chairman
PATRICK J. LEAHY, Vermont SAXBY CHAMBLISS, Georgia
KENT CONRAD, North Dakota RICHARD G. LUGAR, Indiana
MAX BAUCUS, Montana THAD COCHRAN, Mississippi
BLANCHE L. LINCOLN, Arkansas MITCH McCONNELL, Kentucky
DEBBIE A. STABENOW, Michigan PAT ROBERTS, Kansas
E. BENJAMIN NELSON, Nebraska LINDSEY GRAHAM, South Carolina
KEN SALAZAR, Colorado NORM COLEMAN, Minnesota
SHERROD BROWN, Ohio MICHEAL D. CRAPO, Idaho
ROBERT P. CASEY, Jr., Pennsylvania JOHN THUNE, South Dakota
AMY KLOBUCHAR, Minnesota CHARLES E. GRASSLEY, Iowa
Mark Halverson, Majority Staff Director
Jessica L. Williams, Chief Clerk
Martha Scott Poindexter, Minority Staff Director
Vernie Hubert, Minority General Counsel
(ii)
C O N T E N T S
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Page
Hearing(s):
Nomination Hearing to the Farm Credit Administration............. 1
----------
Wednesday, September 24, 2008
STATEMENTS PRESENTED BY SENATORS
Harkin, Hon. Tom, a U.S. Senator from the State of Iowa,
Chairman, Committee on Agriculture, Nutrition, and Forestry.... 1
Cochran, Hon. Thad, a U.S. Senator from the State of Mississippi. 2
Panel I
Keenum, Mark Everett, of Mississippi, to a be Member of the Farm
Credit Administration Board, Farm Credit Administration........ 4
----------
APPENDIX
Prepared Statements:
Grassley, Hon. Charles E..................................... 12
Keenum, Mark Everett......................................... 13
Document(s) Submitted for the Record:
Committee questionnaire and Office of Government Ethics
Executive Branch Personnel Public Financial Disclosure
Report filed by Mark Everett Keenum........................ 16
Various organizations, letters of endorsement for Mark
Everett Keenum............................................. 35
Question and Answer:
Grassley, Hon. Charles E.
Written questions to Mark Everett Keenum..................... 41
Keenum, Mark Everett
Written response to questions from Hon. Charles E. Grassley.. 42
NOMINATION HEARING TO
THE FARM CREDIT ADMINISTRATION
----------
Wednesday, September 24, 2008
U.S. Senate,
Committee on Agriculture,
Nutrition, and Forestry,
Washington, DC
The Committee met, pursuant to notice, at 9:34 a.m., in
room SR-328A, Russell Senate Office Building, Hon. Tom Harkin,
Chairman of the Committee, presiding.
Present: Senators Harkin, Chambliss, and Cochran.
STATEMENT OF HON. TOM HARKIN, U.S. SENATOR FROM THE STATE OF
IOWA, CHAIRMAN, COMMITTEE ON AGRICULTURE, NUTRITION, AND
FORESTRY
Chairman Harkin. The Senate Committee on Agriculture,
Nutrition, and Forestry will come to order.
Today we are here to conduct a hearing on the nomination of
Mr. Mark Keenum to the Board of Directors of the Farm Credit
Administration. Mr. Keenum is a native of Mississippi and has a
long history of service to agriculture and Government, and, of
course, we all know him as legislative assistant and later
chief of staff to Senator Cochran.
The Farm Credit Administration is responsible for
regulating and examining the banks, associations, and related
entities of the Farm Credit System and the Federal Agricultural
Mortgage Corporation, Farmer Mac. In 2007, the Farm Credit
System held about 34 percent of the farm sector's total debt.
Farmer Mac serves as a secondary market for agricultural loans.
FCA must ensure that the Farm Credit System fulfills its
mission to provide a dependable source of credit for
agriculture in rural America.
The Farm Credit System and Farmer Mac were chartered by
Congress as Government-sponsored enterprises, GSEs. With the
news on September 7th that the Federal Housing Finance Agency
established a conservatorship for Fannie Mae and Freddie Mac,
two other GSEs, the regulation of these enterprises assumes
heightened interest. Despite the problems associated with
residential real estate loans, agricultural mortgages and
agricultural loans remain strong. Recently Standard and Poor's
applied the best possible credit rating on the consolidated
debt obligations issued by the Farm Credit System. We can all
be grateful that at this point the agricultural sector seems to
be thriving despite the turmoil in the rest of the U.S.
financial sector.
The availability of stable, sufficient, and long-term
affordable credit remains an important issue to the members of
this Committee and to American agriculture. This Committee has
the responsibility to consider the qualifications of
individuals nominated to oversee the financial status of the
Farm Credit System and Farmer Mac. And we do not take this
responsibility lightly.
I have several letters of support from various agricultural
organizations in support of Mr. Keenum's nomination which I
will submit now for the record. And as Chairman, I welcome Mr.
Keenum to the Committee.
At this point I would yield to the distinguished Senator
from Mississippi--former Chairman of this Committee, I might
add for purposes of a statement and introduction.
STATEMENT OF HON. THAD COCHRAN, U.S. SENATOR FROM THE STATE OF
MISSISSIPPI
Senator Cochran. Thank you very much, Mr. Chairman, and
thank you for convening this hearing as you have this morning
to review the nomination of Dr. Mark Keenum. He has been
nominated by the President to serve as a member of the Farm
Credit Administration Board. He is Under Secretary of
Agriculture at the present time, and we have known him for a
long time. He first came to Washington from Mississippi State
University to serve as a legislative assistant for me, with
special responsibilities for agriculture issues and related
legislative responsibilities. He immediately establish himself
as someone who was competent, dependable, well liked by others,
members of the staff of other Senators and Senator themselves.
He at some point became more involved in my office in terms
of administration and standing in for me when I could not be at
events. And he became my chief of staff, and he served with
great distinction in that capacity.
The President nominated him and he was confirmed as Under
Secretary of Agriculture in 2006. He began his service in
December of that year. His responsibilities include the Risk
Management Agency, administration of the Foreign Agricultural
Service. He has shown great ability in all of these jobs to
work with people and to do the right thing, to be honest and
trustworthy. I do not know of anybody who dislikes him, and
everybody respects him.
So I think we will be very fortunate to have him in this
position, and I wholeheartedly recommend him to the Committee
and congratulate him on this nomination.
Chairman Harkin. Thank you, Senator Cochran.
And now we will hear from the distinguished Ranking Member,
Senator Chambliss.
Senator Chambliss. Thank you, Mr. Chairman, and likewise,
thank you for holding this hearing or Dr. Keenum's nomination
to be a member of the Board of Directors for the Farm Credit
Administration.
As the independent regulator of the Farm Credit System, the
Farm Credit Administration plays an important role in ensuring
the delivery of safe, sound, and dependable credit and related
services to farmers and ranchers in rural America. The credit
crisis that is affecting many financial institutions and
national and international markets may challenge the Farm
Credit Administration. I believe the agency is up to any
challenge the markets may throw its way today or in the future.
Dr. Keenum, I appreciate very much that you are willing to
step into this potentially challenging situation and continue
your service to America's farmers and ranchers. If you are
confirmed to the Board of the Farm Credit Administration--and I
hope you will be soon--I encourage you to continue to focus the
agency and the Farm Credit System on fulfilling its mission in
a safe and sound manner. You have lived your life in
agriculture, and that has served you well in your positions on
the farm, the Land Grant University System, the U.S. Senate and
at the U.S. Department of Agriculture.
As you will recall, this Committee reviewed your nomination
to be Under Secretary of Agriculture for Farm and Foreign
Agricultural Services in December 2006. The Senate made the
right decision in confirming your nomination. As Under
Secretary, you have served the President well. I also
appreciate your understanding of and work with this Committee.
And let me just say from a very personal perspective, I
have known Mark Keenum since before I came to the U.S. House of
Representatives. He was on Senator Cochran's staff, and I can
remember him coming to Georgia with Senator Coverdell and
Senator Cochran. And having a chance to visit with Mark back
then, I had the utmost respect for him. His knowledge of
agriculture is unsurpassed by anybody. But most significantly--
and this is a little bit parochial--his understanding of
Southern agriculture is very unique and truly is unsurpassed by
anybody else. They do not grow a lot of peanuts over in
Mississippi, but he was always understanding, knowledgeable,
and a great friend to the peanut industry. Otherwise, we share
an awful lot of crops in common, and having somebody that you
could go to on the Senate side when I was in the House and now
at USDA from a parochial perspective, as the Chairman knows and
Senator Cochran knows, is just so valuable.
Mark, you made a commitment to public service, and I admire
you for it. I know your family well, and I just commend you and
your family for the sacrifice that you have made in serving the
United States of America and in serving agriculture. And I
could not be happier about commending for the nomination to the
Farm Credit Board. You are going to do a great job there, just
like you have done serving Senator Cochran and just like you
have done serving this Committee and just like you have done
serving USDA.
So thank you for your commitment, thank you for your
service, and I look forward to hearing from you this morning.
Mr. Keenum. Thank you.
Chairman Harkin. Mr. Keenum, we require all nominees to
testify under oath. Would you please stand and raise your right
hand? Do you swear or affirm that the testimony you are about
to provide is the truth, the whole truth, and nothing but the
truth, so help you God?
Mr. Keenum. I do.
Chairman Harkin. Thank you very much.
Now I have one other question that I have to ask. Do you
agree that, if confirmed, you will appear before any duly
constituted Committee of Congress if asked to appear?
Mr. Keenum. Yes, Mr. Chairman.
Chairman Harkin. Thank you very much, Mr. Keenum, and,
again, welcome to you. And I am told that your wife, Rhonda, is
here with you also.
Mr. Keenum. Yes, sir, she is.
Chairman Harkin. We welcome her also to the Committee, and
my notes tell me you have four children, but they are not here.
Mr. Keenum. We left them at home to go to school today. We
are blessed. We have 4-year-old triplets: Kathryn, Everett,
Mary Phillips. And we have a 2-year-old daughter, Victoria.
Chairman Harkin. Wow.
Mr. Keenum. So we are very blessed.
Chairman Harkin. That is a blessing. My goodness. Well,
again, welcome to the Committee. We have your statement. It
will be made a part of the record in its entirety and please
proceed as you so desire.
STATEMENT OF MARK EVERETT KEENUM, OF MISSISSIPPI, TO BE MEMBER,
FARM CREDIT ADMINISTRATION BOARD, FARM CREDIT ADMINISTRATION
Mr. Keenum. Well, thank you, Mr. Chairman, Senator
Chambliss, Senator Cochran, distinguished members of the
Committee. I am both honored and humbled to appear before you
today for consideration for the position of Board Member for
the Farm Credit Administration. I especially want to thank
Senator Thad Cochran for his gracious introduction.
As mentioned, I had the privilege of serving Senator
Cochran on his staff for over 17 years. In fact, I spent many
hours in this very room participating in staff deliberations,
Committee hearings, and mark-ups addressing numerous issues
important to American agriculture.
For over a decade, I had the honor of serving as chief of
staff to Senator Thad Cochran, and I am proud to call him my
mentor and my friend.
I am currently serving, as mentioned, as the Under
Secretary for Farm and Foreign Agricultural Services of the
Department of Agriculture--a role in which I oversee three
agencies: the Farm Service Agency, the Risk Management Agency,
and the Foreign Agricultural Service. This mission area has a
total operating budget of approximately $1.7 billion and
employs over 16,000 people with more than 2,300 offices
nationwide and 98 locations around the globe. The Farm and
Foreign Agricultural Services helps to ensure the well-being of
American agriculture and the American public through efficient
and equitable administration of agricultural commodity,
conservation, risk management, emergency assistance, food
assistance, and farm credit programs.
Mr. Chairman, I was born in Starkville, Mississippi, while
my father was a student studying agriculture at Mississippi
State University. Early in his professional life, my father
went to work for the U.S. Department of Agriculture. He has
since retired, after over 30 years with the Natural Resources
Conservation Service. But he remains committed to his small
family farm in Humphreys County, Mississippi, where my mother
serves as the county's head librarian. My paternal grandfather
also worked for USDA with the Soil and Water Conservation
Service, and he, too, owned a small farm in the Mississippi
Delta.
So I have grown up in and around agriculture all my life.
My experiences span from working as a farm laborer, a crop
scout, an agricultural extension specialist, an agricultural
research associate, an agricultural economics professor, and a
Senate staff member, to serving as an Under Secretary of
Agriculture.
During my career, I have learned a great deal about the
complex nature of agricultural production that farmers face
today. U.S. farmers and ranchers are the most efficient and
resilient producers in the world. Our Nation's Farm Credit
System has a mandate to be a dependable lender to agriculture
and rural America. It has a key role to play in ensuring that
U.S. farmers are able to meet the challenges of producing a
bountiful supply of safe and affordable food and fiber
products.
Mr. Chairman, net farm income in 2008 is projected to be up
$9 billion from last year to an all-time record $96 billion.
Net cash farm income is projected to reach a record $101
billion in 2008, and that is up $14 billion from 2007. Overall,
the balance sheet of the U.S. agriculture sector remains
historically strong with the value of assets increasing at a
faster pace than farm debt. In fact, the debt-to-asset ratio is
forecast to decline to a historic low of only 9 percent this
year.
While today our farm economy is strong, I am mindful of
ongoing concerns within the overall agricultural sector. Total
production expenses are projected to increase by a record $40
billion, or a 16-percent increase, this year to $295 billion.
And that is following an increase of over $20 billion in farm
expenses last year, and that was a 9-percent increase from that
previous year. So higher production expenses over the past 2
years have increased the cost structure of crop and livestock
producers.
According to USDA analysts, for livestock producers prices
must increase to offset the increases in feed costs. For most
row crops, prices can retreat somewhat from the current levels,
but must hold at historically high levels to offset the
increase in production expenses. So going forward, agricultural
producers face increasing risk of a squeeze in their cash-flows
due to the volatility of commodity prices and the rising costs
for land rent, land ownership, and production inputs. If
commodity prices were to decline to anywhere near historic
levels, debt repayment capacity would be seriously affected and
the System's credit risks would increase.
Recent surveys indicate that farm land values have been
increasing in most parts of the country at double-digit rates.
The risk of a bust in farmland prices, a possibility if
commodity prices were to decline sharply, is a continuing
concern for agricultural lenders.
Mr. Chairman, I would be remiss if I did not acknowledge
the current crisis in our Nation's financial markets and the
urgency in which you--and all of our Nation's leaders--are
working to address the current financial environment. You have
my word that, if confirmed, I will do everything in my power to
work with you to ensure the efficacy and transparency of the
Farm Credit Administration.
Mr. Chairman and distinguished members, I have spent the
greater part of my career working within the Senate family and,
therefore, I have a keen appreciation for the unique nature of
the legislative process. During my tenure, I have especially
recognized the importance and the benefits of pursuing
solutions in a bipartisan manner. With the turmoil our Nation
is currently facing in the financial markets coupled with the
historic uncertainties of the agricultural economy, it is more
imperative today than ever to ensure that the Farm Credit
Administration continues its diligence of a strong surveillance
system in its regulatory and examination activities to monitor
and address these challenges, while ensuring the overall safety
and soundness of the Farm Credit System. If confirmed, I can
pledge to this Committee that I will fully dedicate myself to
the broad mission of this important office and that I will
commit to be accessible to all members and staff.
Again, Mr. Chairman, Senator Chambliss, Senator Cochran,
and distinguished members of the Committee, I want to thank you
for allowing me to appear before you today, and I would welcome
any questions or comments.
Thank you.
[The prepared statement of Mr. Keenum can be found on page
13 in the appendix.]
Chairman Harkin. Thank you very much, Dr. Keenum. I join my
colleagues in thanking for your long service, first to the
Senate and then in the Department of Agriculture. We have all
had the pleasure of working with you many times over the past.
We are not strangers at all.
Mr. Keenum. No, sir.
Chairman Harkin. And, again, I just want to thank you very
much on a bipartisan note for all of your great work here, both
here and at the Department. Thank you for your work down there,
too.
I really only have one question, Mark, and it has to do
with the future. Over the next two decades, it is estimated
that 400 million acres of agricultural land will be transferred
to new owners. The future health of agriculture depends on
policies to encourage a new generation of farmers and ranchers
to work in agriculture. With rising costs of land, which you
pointed out in your testimony, equipment, and energy inputs,
young and beginning farmers need access to adequate credit.
So my question is: How do you foresee the Farm Credit
Administration--how can they facilitate lending to serve the
future needs of the next generation, the young farmers, the
beginning farmers and ranchers who need access to that credit
to get established?
Mr. Keenum. I think you are exactly right, Mr. Chairman.
The future of agriculture as we know it today is going to
through and will go through some very significant transitions.
I think when you look at the average age of the American farmer
today, it is in the upper 50's, and as I mentioned, our farmers
are the most resilient, efficient producers in the world. But
they are getting older, and there has to be a transition to a
new generation of farmers. Who is going to take up the plow and
go out and work the fields to provide this bountiful supply of
food and fiber that we so readily take for granted?
I think it is important, it is incumbent upon all lenders
to look to the future and, where we can, help this next
generation be able to be competitive. With high land prices and
high rents, it is somewhat daunting for someone, some young
person today to be able to get into farming because of the
overwhelming expenses that they will have to incur just in
equipment and all these challenges.
And I was pleased, I was very pleased that in the farm bill
there were more incentives provided for USDA, for us to provide
incentives for beginning farmers, socially disadvantaged
farmers as well. And I know that in looking at materials that I
have reviewed preparing for this hearing, the Farm Credit
Administration, also has incentives and directives to all
systems, all the Farm Credit System lenders to focus on loans
for beginning farmers. And I think that if we are going to have
a future in agriculture, we have got to do that.
So I would commit to do everything in my power to make sure
that we have mechanisms, that we have programs to promote
readily available credit for our young and beginning farmers.
Chairman Harkin. Of course, since I was a kid, it has
always been a problem for young people to get involved in
agriculture.
Mr. Keenum. It is.
Chairman Harkin. But all the time in the past that I was
growing up in rural Iowa, for a young person to get into
farming, there were certain stairsteps they could take. You
could rent a little bit of land. You could get into hogs, and
that was always sort of our entree point because it provided
for a good cash-flow, maybe some other livestock, calves maybe
in the grassier parts of our State. But there were those
opportunities that allowed a young person to get started, then
be able to buy a little bit of land and buildup equity.
That is no longer possible. The hogs are now concentrated
in big feed lots, and this is no longer very efficient for
young farmers to do that. So it is becoming--it is harder now,
at least I perceive that. And you are the economist, not me. It
is just harder for a young person unless they have a family
that owns land.
Mr. Keenum. Right.
Chairman Harkin. They get into it to begin farming.
There is, however, in some parts of the country, and
beginning more in mine, some niche things that younger farmers
are doing that maybe are taking the place of what we used to do
with hogs before, enable them to buildup some equity, and that
is in the area of organics. We are finding more and more in
Iowa some smaller farmers that are doing some organics, and
they are getting, obviously, you know, a high price for it.
Mr. Keenum. A premium.
Chairman Harkin. A premium price for it, and that is
allowing them then to get into more kinds of agriculture as we
know it, row crop agriculture, things like that. And they are
setting aside a little bit, doing a little bit of that. They
are doing some organic chickens and some pork. Actually, some
small producers there are doing that and other things. And I
perceive that is happening in some other areas of the country,
too. And I am just wondering if the Farm Credit Administration
has a role to play in that area.
Mr. Keenum. I would absolutely hope so. And I think, as I
mentioned, that providing opportunities to credit is key. If
you do not have the resources to be able to invest in either
the land or the equipment, you are not going to be able to
begin a farming operation. So there may be somewhat of a
function of risk that the Farm Credit System may have to take
with certain borrowers.
And there are provisions that you could look at for maybe
having even lower interest rates for individual farmers who are
beginning or who are a certain age or who fit into certain
categories to try to help provide some assets so they can begin
their operation. I think you are right. Niche farming, organic
farming, is becoming more and more popular. The demand is
there.
Chairman Harkin. The demand is there, yes.
Mr. Keenum. And it is going to continue to be over the
next, as you mentioned, couple of decades. I think American
consumers are going to be demanding even more of these type
products. And so there are opportunities, I think, for
beginning farmers.
It is a challenge. Again, I will do everything in my power
to see what opportunities, to ask these kind of questions of
the staff and colleagues on the Board. What can we do? What can
we do working with the Department of Agriculture through their
guaranteed loan programs, both farm ownership, guaranteed loan
programs, and operating loans that we provide at USDA. What
opportunities are there in teaming up with the Department of
Agriculture through our Farm Credit System.
Chairman Harkin. Very good. Thank you very much, Dr.
Keenum.
Senator Chambliss.
Senator Chambliss. Thank you, Mr. Chairman.
Let me apologize to Rhonda back there. Rhonda, you were
sitting right behind him, and I could not see you earlier. But,
needless to say, we are pleased to see you here this morning.
She has got this big smile. I do not know whether it has
anything to do with not having those young four with her or not
this morning. But she is a great partner for Mark in his public
service.
Mr. Keenum. She is that.
Senator Chambliss. Mark, I just have one thought with
respect to where we are today. Obviously, this financial crisis
we are in has not necessarily touched or involved the Farm
Credit Service at this point in time, but really it has in
respect to the fact that all of the financial markets are going
to be under close scrutiny.
Mr. Keenum. Absolutely.
Senator Chambliss. We have been through some difficulties
with the Farm Credit Administration in years past. I hope the
fact that we are not seeing subprime loans in the farming
industry that we learned our lesson. And I think perhaps we
did.
But as we move ahead, there is a critical portion of the
current crisis or critical aspect of the current crisis that I
think is being questioned. It is something that I have a lot of
questions about, and that is regulation. We conservatives seek
to want to lessen regulation as much as we can and let the
market work and be flexible and whatnot. But there are times,
particularly in the financial market, when we need to have
strong regulation.
There are times, also, when regulators can be too close to
the folks that they are regulating, and there have been some
accusations that the Farm Credit Administration is too close to
the Farm Credit Service or to Farmer Mac. And I would just like
your thoughts on regulation as we move forward and your idea
about how much oversight there needs to be with respect to the
retail side of the Farm Credit Administration.
Mr. Keenum. Well, obviously, the key role of the Farm
Credit Administration is to provide that regulatory oversight,
that surveillance and monitoring. I think over three-quarters
of all their resources go just to that activity alone of
surveillance and monitoring and regulatory oversight.
Right now the Farm Credit System is very healthy. Their
loan portfolios are very large. Farmers are making money. They
are paying their loans. And as a result, the Farm Credit System
is making a record level of profits for the system to the tune
of $1.5 billion just through the first half of this year alone.
It is a record pace.
So things are going well right now, but you never know when
commodity prices may come back down, land values may come back
down. Are we too far extended in some loans that are out there
that may go under? The Farm Credit System is tied to the
overall health and well-being of this economy. Eighty percent
of all the farm families in this country rely on off-farm
income for their family income. And so if someone in a family
loses a job because of the downturn in our national economy,
that can severely affect their ability to honor and pay off
their farm bills.
So it is all interconnected. I think it is more important
probably now than ever, as I mentioned, for the Farm Credit
Administration to be as diligent and resilient in its
responsibilities and duties and making sure that we maintain a
healthy farm credit lending system, that we do not see
situations occur in farm credit that we have seen in other
parts of our economy.
That is the role of this agency, to provide that regulatory
oversight. I will commit that, if I am confirmed, I will do
everything in my power to make sure that we maintain a very
healthy Farm Credit System. I will ask the tough questions of
our senior staff, of the examiners: Are they doing the job to
make sure that capital requirements as stipulated in the
statute are being made, that our farm lending institutions are
not getting too heavily invested in certain areas of the
economy, that there is more diversity in what they are doing in
their business practices?
It is important that we do this to preserve and protect the
integrity of this Farm Credit System. And as I mentioned, I
will base all decisions that ever come before me as a Board
member on the facts, the facts as we can best ascertain, and
understand what the consequences and the implications are based
on those decisions.
That is what I learned early on working here in this body,
serving as a staff member, and that process has served me well
throughout my career.
That is a very good question, and that is how I think we
would approach it.
Senator Chambliss. Just in closing, nobody can put their
finger on the silver bullet that caused the current situation
that we are in on the other side of the financial markets, but
it is pretty obvious that subprime loans are a major
contributing factor. One thing we have seen in agriculture is
the rising price of land all across America. In my part of the
world, land that used to cost $1,000 an acre now is selling for
as high as $4,000 or $5,000 an acre. And we have got to be very
careful that we do not get caught in that same trap of making
loans based upon the highest market value that has ever been
seen in agriculture in parts of the country.
Mr. Keenum. Right.
Senator Chambliss. So I would just encourage you--our job
from an oversight standpoint is obviously to look over your
shoulder, and we have confidence in you and other members of
that Board. But I would just caution you to make sure that we
do not allow ourselves to get in that same trap that the
subprime folks obviously have gotten this market into.
Again, to you and Rhonda, thanks very much for your
commitment. Thanks for your service. And we look forward to
your service in this capacity.
Mr. Keenum. Thank you, Senator.
Senator Chambliss. Thank you, Mr. Chairman.
Chairman Harkin. Do you want to say anything, Senator
Cochran.
Senator Cochran. Mr. Chairman, I do not have any questions.
I just want to congratulate Mark again on his selection to
serve on this Board and wish him well as he undertakes his new
responsibilities.
Thank you.
Mr. Keenum. Thank you, Senator.
Chairman Harkin. Thank you very much.
Any written questions for the record are due by 4 p.m. this
afternoon so the nominee is able to provide answers quickly.
And, with that, again, Mark, thanks for being here, and we
will move this as rapidly as possible, as soon as we get a
quorum. Now, we are having another hearing here at 10 o'clock
with the Homeland Security and Governmental Affairs Committee,
so it is a joint hearing between the two Committees. Hopefully
we will get a quorum then. If we do not get a quorum, it would
be my thought, in consultation with Senator Chambliss, that
maybe we can pull the Committee together on a vote on the
floor, or we can go in the President's Room and report the
nominee out, or something like that, hopefully get it today if
there are votes today. I assume we will do something today on
the floor. Would that be OK?
Senator Chambliss. Sure.
Chairman Harkin. All right. Thank you very much. With that,
the hearing will be adjourned, and then we will be back in
business here in a couple of minutes.
Mr. Keenum. Thank you, Mr. Chairman.
Chairman Harkin. Thank you, Mr. Keenum.
[Whereupon, at 10:05 a.m., the Committee was adjourned.]
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A P P E N D I X
September 24, 2008
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