[Congressional Record Volume 142, Number 11 (Friday, January 26, 1996)]
[Senate]
[Page S529]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      DAN KELLEY OF AGRIBANK, FCB

 Ms. MOSELEY-BRAUN. Mr. President, I rise today in tribute to 
Mr. Dan Kelley, a prominent agriculturist and farm leader in my home 
State of Illinois, who currently serves on the Board of AgriBank Farm 
Credit Bank. Unfortunately, he will soon be leaving the board. I want 
to take the opportunity to commend Dan Kelley for his exemplary public 
service and the strong leadership he provided during a time of real 
challenges at the Farm Credit System.
  Dan Kelley was the last chairman of the former St. Louis Farm Credit 
Bank--federally chartered in 1917 to provide credit and related 
services to farmers in Illinois, Arkansas, and Missouri. As chairman, 
he led an initiative to bring about the historic merger of the St. 
Louis Farm Credit Bank with a sister institution in St. Paul, MN to 
form AgriBank, FCB. This was the first voluntary merger of a Farm 
Credit bank in the history of the Farm Credit System. Mr. Kelley served 
as the first board chairman of AgriBank and, again, played a key 
leadership role in making the merger work. More generally, the Farm 
Credit System began to regain its position as a leader in agricultural 
credit markets in Illinois and other States in the Midwest during Mr. 
Kelley's tenure as Chairman.
  To appreciate what Dan Kelley accomplished in his 7 years of service, 
one must recall that the Farm Credit System had reached the lowest 
point in its history when he first joined the St. Louis Farm Credit 
Board in 1989. The great farm depression of the mid-1980's humbled the 
St. Louis Farm Credit Bank, the Farm Credit System as a whole, as well 
as a number of other agricultural lenders. Losses were mounting in St. 
Louis and throughout the Farm Credit System, while volume was 
shrinking.
  Farmers were leaving the Farm Credit System because they were 
unhappy--unhappy with the rates of interest they were paying, and with 
the service they were receiving. Some borrowers were concerned that 
they would not be able to keep their loans current. Others left Farm 
Credit due to fears that the stock they had invested in their credit 
cooperative was at risk. The Farm Credit System, once commonly 
celebrated as a success story, had become a lightening rod for everyone 
dissatisfied with the state of the farm economy. The Farm Credit 
System, it was said, had overhead costs that were too high, credit 
standards that were too lax, and a lack of sensitivity to acute 
problems being experienced by the distressed borrowers. Not 
surprisingly, the system was also losing money. The St. Louis Bank and 
the other predecessors of AgriBank lost more than $1.7 billion in 1985.
  In short, Dan Kelley and his colleagues on the Board of the St. Louis 
Farm Credit Bank in January 1989 faced obstacles that appeared 
virtually insurmountable to some. Some observers were drafting an 
obituary for the St. Louis Bank and the entire Farm Credit System. 
These draft obituaries were premature. The Farm Credit System has 
survived and now flourishes. Over the past several years, the System 
has made an extraordinary recovery from the financial disaster of the 
mid-1980's. Dan Kelley's bank, in particular, restructured and 
collected billions of dollars of troubled loans. The net result is that 
nonaccruing loans dropped from 7.1 percent of the bank's total in 1989 
to 2.7 percent in December of 1995. Operating costs were dramatically 
reduced. More than $2 billion in earnings and capital has been 
generated, and members' equity in their credit cooperative increased by 
more than $1 billion.

  Of course, a number of other factors were responsible for the 
remarkable turnaround in the fortunes of AgriBank and the Farm Credit 
System. For example, the recovery would not have been possible without 
a more general turnaround in the farm economy. Beyond that, however, 
Dan Kelley and his colleagues deserve an enormous amount of credit for 
making the right decisions on some critical and very difficult issues.
  Indeed, Dan Kelley's successes and those of the Farm Credit System as 
a whole have confounded the cynics who said that farmer cooperatives 
cannot survive, much less prosper, in today's more competitive and 
fast-moving markets.
  Cynics said that farmer-elected boards of directors would not 
voluntarily vote themselves out of jobs. Dan Kelley and his colleagues 
proved those cynics wrong when AgriBank was created in 1991 and when it 
was expanded to include the former Louisville Farm Credit Bank in 1993.
  Cynics alleged that the Agriculture Credit Act of 1987 could not work 
and that the Federal financial assistance provided to the Farm Credit 
System would never be repaid. In October 1992, however, Dan Kelley 
again proved the cynics wrong by announcing that AgriBank was repaying 
the $133 million of assistance 11 years ahead of schedule.
  In short, the cynics underestimated Dan Kelley and other farm leaders 
who were determined to build a stronger, lower-cost and more effective 
credit cooperative for farmers. AgriBank is now a reality and has 
exceeded the expectations of many of those responsible for its 
creation. Its very existence and remarkable success owe a great deal to 
the hard work, dedication, and good judgment of Dan Kelley.
  Dan Kelley's departure from AgriBank does not mean he will no longer 
be a farm leader. His commitment to American agriculture and 
institutions serving the American farmer is too strong for that. He 
will continue to be an active farmer, a member of the Illinois Farm 
Bureau, the Illinois Corn Growers Association, and to serve on the 
board of Gromark.
  On behalf of Illinois farmers, and those who care about American 
agriculture, I thank Dan Kelley for his achievements, and wish him the 
very best in his continued endeavors.

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