[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

                              ----------                              
                                                                   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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