[Senate Hearing 111-800]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 111-800

                    NOMINATION OF JILL LONG THOMPSON
                   TO BE A MEMBER OF THE FARM CREDIT
            ADMINISTRATION BOARD, FARM CREDIT ADMINISTRATION

=======================================================================

                                HEARING

                               before the

                       COMMITTEE ON AGRICULTURE,
                        NUTRITION, AND FORESTRY

                          UNITED STATES SENATE


                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION


                               __________

                           NOVEMBER 18, 2009

                               __________

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








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




                  U.S. GOVERNMENT PRINTING OFFICE
  62-720 PDF              WASHINGTON : 2011
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC 
area (202) 512-1800 Fax: (202) 512-2104  Mail: Stop IDCC, Washington, DC 
20402-0001





           COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY



                 BLANCHE L. LINCOLN, Arkansas, Chairman

PATRICK J. LEAHY, Vermont            SAXBY CHAMBLISS, Georgia
TOM HARKIN, Iowa                     RICHARD G. LUGAR, Indiana
KENT CONRAD, North Dakota            THAD COCHRAN, Mississippi
MAX BAUCUS, Montana                  MITCH MCCONNELL, Kentucky
DEBBIE STABENOW, Michigan            PAT ROBERTS, Kansas
E. BENJAMIN NELSON, Nebraska         MIKE JOHANNS, Nebraska
SHERROD BROWN, Ohio                  CHARLES GRASSLEY, Iowa
ROBERT CASEY, Jr., Pennsylvania      JOHN THUNE, South Dakota
AMY KLOBUCHAR, Minnesota             JOHN CORNYN, Texas
MICHAEL BENNET, Colorado
KIRSTEN GILLIBRAND, New York

               Robert Holifield, Majority Staff Director

                    Jessica L. Williams, Chief Clerk

            Martha Scott Poindexter, Minority Staff Director

                Anne C. Hazlett, Minority Chief Counsel

                                  (ii)















                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing(s):

Nomination of Jill Long Thompson to be a Member of the Farm 
  Credit Administration Board, Farm Credit Administration........     1

                              ----------                              

                      Wednesday, November 18, 2009
                    STATEMENTS PRESENTED BY SENATORS

Lincoln, Hon. Blanche L., U.S. Senator from the State of 
  Arkansas, Chairman, Committe on Agriculture, Nutrition, and 
  Forestry.......................................................     1
Chambliss, Hon. Saxby, U.S. Senator from the State of Georgia....     2
Luger, Hon. Richard G., U.S. Senator from the State of Indiana...     2

                                Witness

Thompson, Jill Long, Nominee, to be a Member of the Farm Credit 
  Administration Board, Farm Credit Administration...............     3
                              ----------                              

                                APPENDIX

Prepared Statements:
    Chambliss, Hon. Saxby........................................    10
    Thompson, Jill Long..........................................    12
Document(s) Submitted for the Record:
    Committee questionnaire and Office of Government Ethics 
      Executive Branch Personnel Public Financial Disclosure 
      Report filed by Jill Long Thompson.........................    16
    Addendum to U.S. Senate Committee on Agriculture, Nutrition, 
      and Forestry Questionnaire for Farm Credit Administration 
      Nominees...................................................    37
    Public 5-day letter to Hon. Blanche L. Lincoln, Chairman, 
      Committee on Agriculture, Nutrition, and Forestry..........    39


 
                    NOMINATION OF JILL LONG THOMPSON
                   TO BE A MEMBER OF THE FARM CREDIT
            ADMINISTRATION BOARD FARM CREDIT ADMINISTRATION

                              ----------                              


                      Wednesday, November 18, 2009

                              United States Senate,
         Committee on Agriculture, Nutrition, and Forestry,
                                                     Washington, DC
    The committee met, pursuant to notice, at 12:26 p.m., in 
Room 106 Dirksen Senate Office Building, Hon. Blanche Lincoln, 
Chairman of the committee, presiding.
    Present or submitting a statement: Senators Lincoln, 
Chambliss, and Lugar.

 STATEMENT OF HON. BLANCLHE L. LINCOLN, U.S. SENATOR FROM THE 
    STATE OF ARKANSAS, CHAIRMAN, COMMITTEE ON AGRICULTURE, 
                    NUTRITION, AND FORESTRY

    Chairman Lincoln. We are going to move the committee to the 
consideration of Congresswoman Jill Long Thompson to be a 
member of the Farm Credit Administration Board.
    Congresswoman, thank you so much for joining us today and 
welcome to the Agriculture Committee. It is great to see you 
again. Thanks for your willingness to continue your long and 
distinguished career of public service, and I would especially 
like to commend the commitment you have demonstrated to 
America's farmers and ranchers.
    One of the Senate's key constitutional obligations is to 
advise and give consent on nominations, and we do take this job 
very seriously, not only because our system of checks and 
balances is so important, but because the sooner we confirm 
qualified nominees, the sooner they can go to work.
    Congresswoman Long Thompson has demonstrated a true passion 
for our agriculture sector. She was raised on a family farm. 
She and her husband, Don Thompson, currently share a family 
farm near Argos in Indiana. Congresswoman Long Thompson has 
also selflessly served the public, first as a member of the 
Common Council at Valparaiso, Indiana, then as a member of the 
United States House of Representatives, where she served on the 
House Agriculture Committee, where I remember her from my days 
on the House Agriculture Committee. Finally, she served as the 
Under Secretary for Rural Development at the U.S. Department of 
Agriculture.
    The Congresswoman's experience in agriculture and in public 
service will be invaluable in her position as a member of the 
Board of the Farm Credit Administration. The Farm Credit 
Administration's role in regulating and evaluating the banks, 
associations, and related entities of the Farm Credit System is 
crucial to the continued viability and growth in agriculture in 
rural America.
    The Farm Credit System provides loans to producers, farm-
owned cooperatives, processors, rural utilities, and so many 
other entities, and it is imperative that the Farm Credit 
Administration continue to ensure that agricultural interests 
are provided with a safe and dependable source of credit. I am 
pleased that Senator Chambliss mentioned that earlier in our 
hearing and I was glad to echo that. As a member of the Board 
of Directors of the Farm Credit Administration, I know the 
Congresswoman will undertake her responsibilities bearing in 
mind the key role of FCA and what it plays in providing credit 
to agricultural interests.
    So we look forward to hearing from you, to your statement 
and answers to any questions that we may have.
    I would like to now yield to my Ranking Member, Senator 
Chambliss.

STATEMENT OF HON. SAXBY CHAMBLISS, U.S. SENATOR FROM THE STATE 
                           OF GEORGIA

    Senator Chambliss. Thank you, Madam Chairman, and welcome, 
Ms. Thompson. I will submit my statement to the record, but 
suffice it to say that Ms. Thompson has been a member of the 
Hill for many, many years and her record speaks for itself. We 
look forward to moving this process along and I look forward to 
hearing from you today. Thank you.
    [The prepared statement of Senator Chambliss can be found 
on page 10 in the appendix.]
    Chairman Lincoln. Thank you.
    Senator Lugar.

STATEMENT OF HON. RICHARD G. LUGAR, U.S. SENATOR FROM THE STATE 
                           OF INDIANA

    Senator Lugar. Madam Chairman, thank you for holding this 
very important hearing for the Farm Credit Administration Board 
confirmation. It is a real privilege to welcome back Jill Long 
Thompson to this committee.
    In 1995, I had the distinct privilege of serving as 
Chairman of this committee when we considered Jill Long 
Thompson for Under Secretary of Agriculture for Rural, 
Economic, and Community Development. In addition to serving as 
the Under Secretary, Jill served also in the House of 
Representatives, where she represented Indiana's Fourth 
District from 1989 to 1995. She served ably on the House 
Agriculture Committee and was elected by her peers to lead the 
Congressional Rural Caucus at that time.
    These experiences buttress Jill Long Thompson's long 
connection to agriculture, formed in her earliest years. She 
was raised on a grain and dairy farm in Whitley County, 
Indiana, and was an active 4-H member in her youth. Notably, 
she still serves and lives on a farm in Indiana, actually 
manages her family's operations.
    In addition to these many accomplishments, Jill has served 
as the CEO of the National Center for Food and Agricultural 
Policy and recently as an adjunct professor at her alma mater, 
Valparaiso University. She also obtained an MBA and a Ph.D. at 
Indiana University and served on the faculty or as an adjunct 
professor in many of Indiana's excellent colleges and 
universities.
    I look forward to hearing her testimony today and I commend 
the President on nominating her to this important Board.
    Chairman Lincoln. Thank you, Senator Lugar.
    Congresswoman, would you please rise and raise your right 
hand.
    Do you swear that the testimony you are about to present is 
the truth, the whole truth, and nothing but the truth?
    Ms. Thompson. Yes.
    Chairman Lincoln. Secondly, do you agree that, if 
confirmed, you will appear before any duly constituted 
committee of Congress, if asked?
    Ms. Thompson. Yes.
    Chairman Lincoln. Great. Thank you so much. Please proceed 
with your testimony.

 TESTIMONY OF JILL LONG THOMPSON, OF INDIANA, NOMINEE TO BE A 
  MEMBER OF THE FARM CREDIT ADMINISTRATION BOARD, FARM CREDIT 
                         ADMINISTRATION

    Ms. Thompson. Chairwoman Lincoln, Ranking Member Chambliss, 
and members of the committee, it is truly a privilege to appear 
before you today as President Obama's nominee to become a 
member of the Board of the Farm Credit Administration.
    I am particularly pleased to appear before my former House 
colleague, friend, and the first female Chair of the Senate 
Agriculture Committee. Congratulations, Madam Chair. I think 
that has a good ring to it, and if confirmed, I look forward to 
renewing our association and working with you to the benefit of 
American agriculture.
    Ranking Member Chambliss, it has always been a privilege to 
work with you. I didn't get to serve with you in the House, but 
when I served as Under Secretary, I worked with you and your 
staff a great deal on issues very important to the State of 
Georgia and very much appreciate your commitment to 
agriculture.
    And Senator Lugar, you know you are one of my two favorite 
Senators and I thank you so much for your kind and generous 
introduction. You make us proud in Indiana every day. You serve 
not just Hoosiers with distinction, you serve this country with 
distinction. Thank you. It is such an honor that you introduced 
me here today. Thank you very much.
    I also especially thank my husband, who is sitting in the 
back row here today, and thank him for being here with me and 
for his support and commitment to the many things that are 
important to me and particularly American agriculture.
    It is an honor to be selected by President Obama to serve 
on the Board of the Farm Credit Administration. My appreciation 
for the agriculture industry has been life encompassing. From 
my childhood days on our family farm to those I now share with 
my husband on our farm near Argos, Indiana, I have a firsthand 
understanding and respect for the millions of individuals who 
work in and for the betterment of American agriculture.
    I hold this nomination close to my heart as a tribute to my 
commitment and public service to America and to the prosperity 
of agriculture in the United States. I have had
    the great privilege to serve on the U.S. House Committee on 
Agriculture as a representative of the Fourth District of 
Indiana and as President Clinton's Under Secretary for Rural 
Development in the United States Department of Agriculture. 
Most recently, I served as the CEO and Senior Fellow at the 
National Center for Food and Agricultural Policy. And I want to 
assure you that I will use these experiences and the knowledge 
that I have gained and apply them as a Board member of the Farm 
Credit Administration, if I am confirmed to serve.
    The Farm Credit Administration's role as the Farm Credit 
System's safety and soundness regulator is very important for 
agriculture and rural America. The presence of the Farm Credit 
System in agricultural lending provides farmers, ranchers, and 
their cooperatives a source of dependable and competitive 
financing. As owners and operators of our own family farming 
operation, my husband and I know the importance credit 
availability plays in production agriculture. And so it is the 
Farm Credit Administration's duty to ensure the system remains 
safe and sound so that it can serve the generations of farmers 
and ranchers to come.
    Every American is keenly aware of the importance of prudent 
and effective regulation of financial markets. Last year's 
near-collapse of Wall Street sent shock waves throughout the 
world, and we are still recovering from the effects. While 
there were many reasons for the crisis, it could have been at 
least partly mitigated by more effective financial regulatory 
oversight.
    If confirmed to serve on the FCA Board, I assure this 
committee that I will take my responsibility seriously to be an 
effective arms-length regulator of the Farm Credit System and 
Farmer Mac.
    Madam Chair, Ranking Member Chambliss, and members of the 
committee, this concludes my statement and I welcome your 
questions.
    [The prepared statement of Ms. Thompson can be found on 
page 12 in the appendix.]
    Chairman Lincoln. Thank you, Congresswoman. We are 
delighted you are here and look forward to working with you.
    Just one brief question, and I know certainly with what we 
have seen in Arkansas and surrounding States with the 
devastation of floods in the spring and floods in the fall, and 
as you and I both know, growing up in farm families, there are 
all kinds of unbelievable vulnerabilities that are beyond the 
control of our American farm families.
    But the Farm Credit System lends to a single industry, 
agriculture, and it is therefore very vulnerable to the 
economic volatility and risk in that industry, and since there 
is an awful lot there that they have little control over. And 
while certainly the Farm Credit System remains generally safe 
and sound, recent adversity in several major commodity groups 
has caused deterioration in a number of the Farm Credit 
institutions.
    How would you just ensure that the system will be able to 
withstand such vulnerabilities in the long term and remain safe 
and sound?
    Ms. Thompson. Well, I think the legislation that was passed 
in 1987, the major reforms of the Farm Credit System, have 
played a key role in keeping the system sound over the last 20-
some years. Having said that, agriculture, production 
agriculture, and marketing and value-added, those are 
industries that are changing all the time and it becomes very 
important for any laws and regulations to be updated. And 
certainly it is the Congress that determines the direction, but 
it is the role of the Farm Credit Administration to make sure 
that you are aware of any challenges or forthcoming challenges 
when they first begin. If I am privileged to serve on this 
Board, it will be my commitment to ensure that you here at the 
committee have the information you need.
    In addition to that, the Farm Credit Administration 
conducts regular audits, about every 18 months, I believe it 
is, of the banks and associations. In addition to that, there 
are quarterly reports that are compiled. And from those, you 
can determine if there are some issues that need to be 
addressed, and certainly we will do what we have--if I am 
serving, I will do what I have in my power to make sure that 
those issues get addressed, but also make sure that you are 
among the first to have the information.
    Chairman Lincoln. Thank you.
    Senator Chambliss.
    Senator Chambliss. Thank you.
    Ms. Thompson, agriculture, though challenged by turmoil as 
every other industry has been by the U.S. economy over the last 
year or so, has weathered pretty well, considering. With your 
experience in agriculture, accounting, and finance, you have 
seen the ups and downs from a financial standpoint in the area 
of agriculture. How would you compare this past year's troubles 
to what agriculture faced in the past, especially during the 
1980s credit crisis, and what challenges and opportunities do 
you see ahead for agriculture?
    Ms. Thompson. You could about write a dissertation on that, 
I think. But I do think that there were some very wise 
decisions made by Congress in the late 1980s as things had 
begun to unfold in agriculture and there was such a downturn in 
commodity prices and there were droughts and floods and 
different issues. And so I think that so many of the problems 
in farm lending, certainly in the Farm Credit System, were 
addressed at that time, and I think that that has helped to 
ensure that the lending on the part of the Farm Credit System 
has truly been to creditworthy borrowers.
    And I also think the changes in policy and regulations have 
helped not just the industry at large, but it has helped 
individual farmers to make better decisions regarding financing 
of their operations. And I think that because of that, we 
haven't seen the widespread kinds of issues that we dealt with 
in the 1980s. I think it is very important to continue to 
update policy to address problems of the future.
    Senator Chambliss. Thank you. Thank you, Madam Chairman.
    Chairman Lincoln. Senator Lugar.
    Senator Lugar. Congresswoman Long Thompson, this past year, 
farmers have faced, because of the huge increases in the price 
of fertilizer and seed, a special need for credit. Likewise, 
however, their confidence was undermined by the volatile price 
of corn and soybeans, to take two examples, of soybeans going 
to $15 and back to $8, or corn to $7 and back to $3.50 or so 
forth. So as a result, in the agriculture sector, at least in 
the Midwest, with which your farm and my farm are familiar, 
this has been an extraordinary period.
    Now, complaints have come that given the problems of local 
banks as they strive for liquidity and safety, that credit has 
not been forthcoming in the manner to which--and even if it 
was, many farmers said, we are beginning this year with fear 
that we may not have a profit, that the expenses up front of 
the seed and fertilizer may exceed whatever we are going to get 
at the end of the trail, if we are on the downside of the 
commodity markets.
    As you have studied the role that you will play in this, to 
what extent does the Board try to surmise what the lay of the 
land is out there, quite apart from the responsibility of the 
various institutions, whether they are managed well and whether 
they are fiscally sound? To what extent do you look at markets, 
do you look at problems of regular farmers who are facing the 
markets and the credit problems?
    Ms. Thompson. Well, if I am privileged to serve on the 
Board of Farm Credit Administration, it will be a significant 
part of my job to read what is coming out of the Land Grant 
Universities, Purdue University and others, so that we can 
always be as effective as we can to stay ahead of the curve of 
those downturns in agriculture, or the volatility in 
agriculture. And I think that having that information is 
probably the best way that you can effectively regulate the 
banks and the associations that are making the loans and to 
ensure that the loans, in fact, are creditworthy. And that is 
how I will approach this position, if I am privileged to serve.
    Senator Lugar. Well, that is the view of the future. Now, 
in taking a look at the past, what is the situation currently 
in terms of defaults by agriculture, either individual farmers 
or are there groups of farmers or what have you? How many 
people are in arrears and what is--we have been hearing about 
the disaster with the earlier panel today, but how does this 
stack up in agricultural America?
    Ms. Thompson. Well, I don't have the information on lending 
in general, but Farm Credit is a major lender, somewhere, 
depending upon whether it is for real estate or for operation, 
anywhere from about 31 percent, I think, to 39 percent of 
agriculture lending, depending upon specifically the facet that 
you are looking at.
    Senator Lugar. Comes out of your agency, the Farm Credit 
Administration?
    Ms. Thompson. Yes. Yes. And, in fact, the report for the 
first three quarters of 2009, while there are some concerns, 
the loans are, in general, very sound and the system is 
performing very well.
    Senator Lugar. Well, that is very salutary information. At 
least as you approach this responsibility, the system appears 
to be working well, and the question now is to have the 
foresight to make certain that continues.
    I wish you every success.
    Ms. Thompson. Thank you. Thank you.
    Senator Lugar. Thank you, Madam Chairman.
    Chairman Lincoln. Thank you, Congresswoman. We all 
appreciate you being here today and certainly do wish you the 
best success.
    We would also like to leave the record open if other 
members of the committee might wish to make statements or ask 
questions or anything else, so we will leave it open for five 
days and that way if there are any other questions, we will 
make sure that we make those available to you, obviously, for 
you to answer.
    Ms. Thompson. Thank you.
    Chairman Lincoln. But we thank you so much for taking time 
to be here, and again look forward to working with you. It is 
great to see you again.
    Ms. Thompson. It is great to see you. It is great to see 
all of you. Thank you.
    Chairman Lincoln. Thank you very much.
    The committee is adjourned.
    [Whereupon, at 12:43 p.m., the committee was adjourned.]
      
=======================================================================


                            A P P E N D I X

                           November 18, 2009




=======================================================================

