[Congressional Record Volume 140, Number 57 (Wednesday, May 11, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: May 11, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
 H.R. 4379, FARM CREDIT SYSTEM AGRICULTURAL EXPORT AND RISK MANAGEMENT 
                                  ACT

                                 ______


                           HON. E de la GARZA

                                of texas

                    in the house of representatives

                        Wednesday, May 11, 1994

  Mr. de la GARZA. Mr. Speaker, I have introduced legislation to 
enhance the agricultural export and risk management authorities of Farm 
Credit System institutions. five other members of the Committee on 
Agriculture, including Congressman Roberts of Kansas, the Committee's 
ranking minority member, are cosponsors of this legislation.
  The health of much of the U.S. agricultural sector depends on the 
export of bulk and processed agricultural products to other countries. 
For every $1 in U.S. agricultural exports, $1.40 in related economic 
activity is generated in our country. There is no question that export 
development is beneficial to American farmers and the U.S. economy in 
general.
  The availability of export financing is vital to the orderly 
marketing and expansion of U.S. agricultural exports. Since 1980, the 
National Bank for Cooperatives, better known as CoBank, has been 
authorized to finance the sale of agricultural exports for the benefit 
of our Nation's agricultural cooperatives. CoBank is a part of the Farm 
Credit System, the Government-sponsored, farmer-owned agricultural 
lending system.
  In the 1990's, our Nation's farmer-owned cooperatives are seeking to 
further expand export markets for their products, most particularly for 
value-added agricultural products. To compete in today's competitive 
global marketplace, U.S. farmer-owned cooperatives are finding it 
essential to develop joint ventures and partnerships with other 
business entities here in the United States and in foreign countries.
  The problem is current law does not allow the Farm Credit System's 
banks for cooperatives, including CoBank, to fully participate in 
financing arrangements by U.S. farmer-owned cooperatives with other 
business entities.
  In testimony presented April 28, 1994, to the House Agriculture 
Subcommittee on Foreign Agriculture and Hunger, Eugene L. Bovee, a 
senior vice president for CoBank, urged Congress to modify this 
restriction. ``If viable businesses like these are not developed by 
farmer-owned cooperatives, U.S. farmers will lose out on new markets 
for their products. In addition, much of the economic activity in the 
U.S. that is stimulated by increasing exports will also be lost,'' he 
said.
  Mr. Speaker, the bill I have introduced, H.R. 4379, makes two 
significant changes in current Farm Credit System authorities.
  First, H.R. 4379 would allow the banks for cooperatives to 
participate in financing arrangements with other domestic or foreign 
businesses to promote the export of U.S. agriculture-related products. 
It would also allow the banks for cooperatives to finance joint 
ventures, partnerships and similar arrangements by eligible U.S. 
agricultural cooperatives, with certain limitations. The bill 
specifically prohibits these institutions from financing the relocation 
of a plant or facility from the United States to another country.
  Second, H.R. 4379 would allow Farm Credit System banks and 
associations to better manage the risk in their loan portfolios. The 
bill would authorize Farm Credit System institutions to purchase and 
sell loan participations with non-system lenders, thus reducing their 
concentration of risk by geography and industry.
  Mr. Speaker, the common goal of those of us who are sponsors of this 
legislation is to help American agriculture and our rural communities 
better compete in today's global economy. This legislation provides 
Congress with a starting point in our deliberations over the 
appropriate future role the banks for cooperatives can play in 
promoting the export of U.S. agricultural commodities and products. I 
look forward to working with my colleagues on the Committee on 
Agriculture in addressing this important issue.

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