Farm Service Agency: Information on Farm Loans and Losses (Letter Report,
11/27/98, GAO/RCED-99-18).

Pursuant to a congressional request, GAO provided information on
selected Farm Service Agency (FSA) farm loans, focusing on: (1) the
financial condition of FSA's active direct farm loan portfolio at the
end of fiscal years (FY) 1995 through 1997; (2) the amount and number of
losses incurred by FSA on direct farm loans from FY 1989 through FY
1997; and (3) new farm operating loans that FSA has made on an exception
basis, since the 1996 Farm Bill, to borrowers who had debts forgiven
when their loans were restructured.

GAO noted that: (1) the unpaid principal on FSA's active direct farm
loan portfolio totalled about $9.7 billion at the end of FY 1997; (2)
delinquent borrowers held about $2.7 billion, or 28.2 percent, of this
amount; (3) the size of the agency's portfolio, as well as the
percentage of the portfolio held by delinquent borrowers, has decreased
since 1995, when the portfolio totalled $11.4 billion, of which 40.7
percent was held by delinquent borrowers; (4) in fiscal years 1996 and
1997, about $1.9 billion of principal and interest owed on farm loans
was written off by the agency; (5) for the 9-year period fiscal years
1989 through 1997, FSA wrote off $15.2 billion of direct farm loans for
almost 80,000 borrowers through its various processes for resolving
delinquencies, which provide for: (a) restructuring loans; (b) allowing
a borrower who does not qualify for restructuring to make a payment
based on the value of loan-security property; or (c) reaching a final
resolution of the debt that may or may not include a payment by the
borrower; (6) about $1.7 billion of the agency's losses resulted from
reducing the debts of borrowers whose loans were restructured, and about
$2.4 billion resulted from forgiving the debts of those who made buyout
payments; (7) most of the write-off--about $11.1 billion--occurred
through debt settlement; (8) since the enactment date of the 1996 Farm
Bill through June 30, 1998, FSA made or guaranteed $54.2 million in new
farm operating loans to 690 borrowers whose debts had been reduced when
their prior farm loans were restructured; and (9) most of the 690
borrowers who received loans--about 77 percent--obtained direct farm
operating loans, and about 23 percent obtained guaranteed farm operating
loans.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-99-18
     TITLE:  Farm Service Agency: Information on Farm Loans and Losses
      DATE:  11/27/98
   SUBJECT:  Farm credit
             Direct loans
             Government guaranteed loans
             Financial management
             Delinquent loans
             Loan defaults
             Debt collection
             Agricultural programs
             Government collections
             Loan repayments

             
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Cover
================================================================ COVER


Report to the Chairman, Committee on the Budget, House of
Representatives

November 1998

FARM SERVICE AGENCY - INFORMATION
ON FARM LOANS AND LOSSES

GAO/RCED-99-18

FSA's Farm Loans and Losses

(150088)


Abbreviations
=============================================================== ABBREV

  FSA - Farm Service Agency
  GAO - General Accounting Office
  USDA - U.S.  Department of Agriculture

Letter
=============================================================== LETTER


B-281178

November 27, 1998

The Honorable John R.  Kasich
Chairman, Committee on the Budget
House of Representatives

Dear Mr.  Chairman: 

The Farm Service Agency (FSA), a lending agency within the U.S. 
Department of Agriculture (USDA), provides financial assistance to
farmers and ranchers who are unable to obtain commercial credit at
reasonable rates and terms.  When a borrower does not repay his or
her loans, FSA has various tools to resolve the delinquency, which
may include forgiving--writing off--debt.  The Federal Agriculture
Improvement and Reform Act of 1996\1 generally prohibits FSA from
making loans to borrowers who have previously had debts forgiven. 

This report responds to your request for selected information on
FSA's farm loans.  In particular, as you requested, we are providing
information on (1) the financial condition of FSA's active direct
farm loan portfolio at the end of fiscal years 1995 through 1997; (2)
the amount and number of losses incurred by FSA on direct farm loans
from fiscal year 1989 through fiscal year 1997; and (3) new farm
operating loans\2 that FSA has made on an exception basis, since the
1996 Farm Bill, to borrowers who had debts forgiven when their loans
were restructured.\3


--------------------
\1 This act (P.L.  104-127, Apr.  4, 1996) is referred to as the 1996
Farm Bill. 

\2 Farm operating loans are generally made to pay the expenses that
farmers and ranchers incur in operating their farms and ranches, to
refinance existing debts, and to pay family living expenses. 

\3 Restructured loans had the original loan agreements altered by
writing down unpaid principal and accumulated interest.  The making
of farm operating loans to such borrowers is an exception to the
general prohibition on making loans to borrowers who have previously
had debts forgiven. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

The unpaid principal on the Farm Service Agency's active direct farm
loan portfolio totaled about $9.7 billion at the end of fiscal year
1997.  Delinquent borrowers (those who are at least 30 days past due
on loan repayment) held about $2.7 billion, or 28.2 percent, of this
amount.  The size of the agency's portfolio, as well as the
percentage of the portfolio held by delinquent borrowers, has
decreased since 1995, when the portfolio totaled $11.4 billion, of
which 40.7 percent was held by delinquent borrowers.  In fiscal years
1996 and 1997, about $1.9 billion of principal and interest owed on
farm loans was written off by the agency. 

For the 9-year period fiscal years 1989 through 1997, the Farm
Service Agency wrote off $15.2 billion of direct farm loans for
almost 80,000 borrowers through its various processes for resolving
delinquencies, which provide for (1) restructuring loans, (2)
allowing a borrower who does not qualify for restructuring to make a
payment based on the value of loan-security property (this payment is
referred to as a buyout payment), or (3) reaching a final resolution
of the debt that may or may not include a payment by the borrower
(this is referred to as debt settlement).  About $1.7 billion of the
agency's losses resulted from reducing the debts of borrowers whose
loans were restructured, and about $2.4 billion resulted from
forgiving the debts of those who made buyout payments.  Most of the
write-off--about $11.1 billion--occurred through debt settlement. 

Since the enactment date of the 1996 Farm Bill through June 30, 1998,
the Farm Service Agency made or guaranteed $54.2 million in new farm
operating loans to 690 borrowers whose debts had been reduced when
their prior farm loans were restructured.  Most of the 690 borrowers
who received loans--about 77 percent--obtained direct farm operating
loans, and about 23 percent obtained guaranteed farm operating loans. 


   BACKGROUND
------------------------------------------------------------ Letter :2

FSA, established by the Federal Crop Insurance Reform and Department
of Agriculture Reorganization Act of 1994 (P.L.  103-354, Oct.  13,
1994), provides, among other things, direct government-funded loans
to farmers and ranchers who are unable to obtain financing elsewhere
at reasonable rates and terms.\4 FSA also provides repayment
guarantees on farm loans made by commercial lenders.  For a
guaranteed loan, a commercial lender must certify that it will not
make the loan unless it receives an FSA guarantee.  The Consolidated
Farm and Rural Development Act, as amended (P.L.  87-128, Aug.  8,
1961), is the basic authority for the farm loan programs. 

Farm ownership loans--both direct and guaranteed--are made for
purposes such as buying farm real estate and making capital
improvements.  Farm operating loans--both direct and guaranteed-- are
made for purposes such as buying feed, seed, fertilizer, livestock,
and farm equipment; refinancing existing debts; and paying family
living expenses.  Additionally, emergency disaster direct loans are
made to farmers and ranchers whose operations have been substantially
damaged by adverse weather or other natural disasters. 

To obtain a direct farm loan, an applicant must, among other things,
pledge property as security for the loan and have a projected cash
flow that demonstrates the ability to repay the loan.  The cash flow
test requires showing projected income that must be at least equal to
but not necessarily more than projected expenses, which include the
principal and interest that will be due on the loan; this standard
does not require an income cushion in anticipation of unforeseen
circumstances.  The 1996 Farm Bill required that a delinquent
borrower demonstrate up to a 10-percent cash flow margin for a loan
or loans to be restructured.  However, this requirement was removed
by the Omnibus Consolidated and Emergency Supplemental Appropriations
Act, 1999 (P.L.  105-277, Oct.  21, 1998). 

When a borrower does not repay his or her loans, FSA has various
tools to resolve the delinquency, such as (1) restructuring loans,
which may include reducing debt; (2) allowing a borrower who does not
qualify for restructuring to make a buyout payment based on the value
of loan-security property for less than the amount owed, which
results in FSA's forgiving the balance; and (3) reaching a final
resolution of the debt that may or may not include a payment by the
borrower, which also results in debt forgiveness. 

The 1996 Farm Bill generally prohibits new loans to borrowers who
caused FSA to incur loan losses.  However, the act contains an
exception allowing borrowers whose debts were reduced through
restructuring to obtain new farm operating loans--direct and
guaranteed--for annual operating purposes, such as buying feed, seed,
and fertilizer.  In addition, P.L.  104-134 (Apr.  26, 1996), which
provided supplemental appropriations for USDA for fiscal year 1996,
allows further exceptions.  Specifically, FSA can make a farm
operating loan, or an emergency disaster loan, to any borrower who
had a loan application in process at the time the Farm Bill was
enacted, provided that the borrower was less than 90 days delinquent
at that time.  A farm operating loan under this exception provision
can be for any purpose for which such loans are authorized.  P.L. 
105-277, which was enacted in October 1998, allows additional
exceptions to the general prohibition of new loans to borrowers who
caused FSA to incur loan losses. 


--------------------
\4 FSA administers the farm loan programs that historically were
operated by USDA's Farmers Home Administration.  In this report, we
refer to these loan programs as FSA's programs. 


   OUTSTANDING AND DELINQUENT
   LOANS HAVE DECLINED IN RECENT
   YEARS
------------------------------------------------------------ Letter :3

The outstanding principal owed on FSA's active direct farm loans
declined from about $11.4 billion in September 1995 to $10.5 billion
in September 1996 and to $9.7 billion in September 1997.\5

The portion of the portfolio held by delinquent borrowers also
declined over this period.  Specifically, as table 1 shows,
delinquent borrowers held $4.6 billion, or 40.7 percent, of the
outstanding principal in September 1995 and $2.7 billion, or 28.2
percent, of the outstanding principal in September 1997.\6



                                         Table 1
                         
                           Amount and Percentage of Outstanding
                           Direct Farm Loans Owed by Delinquent
                          Borrowers, September 30, 1995, Through
                                    September 30, 1997

                                  (Dollars in billions)

                                             Owed by delinquent      Percentage owed by
                   Outstanding principal         borrowers         delinquent borrowers\a
                   ----------------------  ----------------------  ----------------------
                                                                               Percentage
                                Number of               Number of  Percentage          of
Fiscal year            Amount   borrowers      Amount   borrowers     of debt   borrowers
-----------------  ----------  ----------  ----------  ----------  ----------  ----------
1997                     $9.7     110,119        $2.7      18,558       28.2%       16.9%
1996                    $10.5     115,714        $3.6      24,316       34.2%       21.0%
1995                    $11.4     121,711        $4.6      29,669       40.7%       24.4%
-----------------------------------------------------------------------------------------
\a Percentages are based on whole numbers. 

Source:  GAO's analysis of records from FSA's Finance Office. 


--------------------
\5 The information presented in this section of the report covers the
outstanding principal owed on active direct farm loans and excludes
inactive loans, such as those involved in bankruptcy or foreclosure
proceedings.  Also, while collateral property reduces FSA's risk on
outstanding loans, we did not determine the extent to which the
government's investment in outstanding loans is protected by such
property. 

\6 If a borrower was delinquent (at least 30 days past due on loan
repayment) on any farm loan, the principal on all farm loans held by
the borrower was totaled to calculate the amount owed by the
delinquent borrower.  We do so because FSA considers all loans held
by borrowers when attempting to resolve delinquencies through its
various servicing tools. 


   MORE THAN $15 BILLION OF DIRECT
   FARM LOANS HAS BEEN WRITTEN OFF
------------------------------------------------------------ Letter :4

From fiscal year 1989 through 1997, $15.2 billion in principal and
interest was lost by reducing or forgiving the delinquent debt of
FSA's direct farm loan borrowers.\7 Of these losses, about $1.7
billion was debt written down when FSA restructured delinquent
borrowers' loans, and another $2.4 billion was debt written off when
delinquent borrowers, who did not qualify for restructuring, made
buyout payments.  Most of the losses during this 9-year period,
however--about $11.1 billion, or 73 percent--were write-offs that
resulted from debt settlements.  As we previously reported, debt
settlements generally occur after loan-security property has been
liquidated and frequently result in no payments being made to the
agency by the borrowers at the time of settlement.\8 For example, we
reported in May 1998 that 81.5 percent of the more than $2 billion
written off during a recent 3-year period was done with no payments
at the time of settlement. 

Table 2 summarizes the amount of debt written off during the fiscal
year 1989-97 period through each of the three tools available to FSA
for resolving delinquent loans.  (App.  I provides annual information
on write-offs by the type of loan-servicing action.)



                                Table 2
                
                Direct Farm Loan Losses, by Type of Loan
                  Servicing, Fiscal Years 1989 Through
                                  1997

                         (Dollars in billions)

                                                             Number of
Type servicing                              Amount         borrowers\a
------------------------------  ------------------  ------------------
Restructured with write-down                  $1.7              10,994
Buyout with write-off                          2.4              11,638
Debt settled with write-off                   11.1              57,196
======================================================================
Total                                      $15.2\b              79,828
----------------------------------------------------------------------
\a The number of borrowers represents discrete borrowers--that is, if
servicing occurred for a borrower in more than 1 fiscal year over the
9-year period, the borrower is counted only once. 

\b The $15.2 billion of losses equals $17.4 billion in constant 1997
dollars. 

Source:  GAO's analysis of records from FSA's Finance Office. 

FSA has incurred losses on all types of direct farm loans.  The
highest losses, however, occurred with the agency's emergency
disaster loans, on which $7.5 billion was written off from 1989
through 1997.  Table 3, which summarizes the amount of debt written
off by the type of loan during this 9-year period, also shows that a
total of $4.9 billion was written off on the agency's farm ownership
and operating loans.  (App.  I provides annual information on
write-offs by the type of loan.)



                                Table 3
                
                 Direct Farm Loan Losses, by Loan Type,
                     Fiscal Years 1989 Through 1997

                         (Dollars in billions)

                                                             Number of
Loan type                                   Amount         borrowers\a
------------------------------  ------------------  ------------------
Farm ownership                                $1.9              23,970
Farm operating                                 3.0              48,124
Emergency disaster                             7.5              41,225
Other\b                                        2.8              23,441
======================================================================
Total                                      $15.2\c             136,760
----------------------------------------------------------------------
\a The number of borrowers includes some borrowers who are counted
more than once because they had more than one type of direct loan for
which losses were incurred. 

\b "Other" covers economic emergency, soil and water, and recreation
loans. 

\c The $15.2 billion of losses equals $17.4 billion in constant 1997
dollars. 

Source:  GAO's analysis of records from FSA's Finance Office. 

A large part of FSA's losses on farm loans occurred during the early
years of the fiscal year 1989-97 period.  Specifically, more than
half the losses--$7.9 billion, or about 52 percent of the total
losses--occurred during the first 3 fiscal years of this 9-year
period.  Another $4.4 billion, or about 29 percent, occurred in
fiscal years 1992 through 1994.  The balance, $2.8 billion, or about
19 percent, occurred in fiscal years 1995 through 1997.  (App.  I
provides annual information on write-offs.)


--------------------
\7 The $15.2 billion of losses equals $17.4 billion in constant 1997
dollars. 

\8 See, for example, Farm Service Agency:  Status of the Farm Loan
Portfolio and the Use of Three Contracting Provisions for Loan
Servicing (GAO/RCED-98-141, May 5, 1998) and Debt Settlements:  FmHA
Can Do More to Collect on Loans and Avoid Losses (GAO/RCED-95-11,
Oct.  18, 1994). 


   NEW FARM OPERATING LOANS WERE
   MADE TO CERTAIN BORROWERS WHO
   CAUSED PRIOR LOSSES
------------------------------------------------------------ Letter :5

Since enactment of the 1996 Farm Bill on April 4, 1996, through the
first three quarters of fiscal year 1998, FSA made or guaranteed
$54.2 million in new farm operating loans to borrowers whose prior
debts had been reduced when their loans were restructured.  A total
of 690 borrowers whose loans had been restructured with write-downs
obtained new farm operating loans since the passage of the 1996 Farm
Bill.  (We did not determine whether the loans received by these
borrowers were for annual operating purposes or for other authorized
purposes, such as acquiring livestock or farm equipment, refinancing
existing debts, or paying family living expenses.) Most of these
borrowers--77.4 percent--obtained direct farm operating loans, and
the other 22.6 percent obtained guaranteed loans.  Furthermore, as
table 4 shows, almost twice as many direct farm operating loans were
made in the first three quarters of fiscal year 1998 as were made in
fiscal 1997. 



                                         Table 4
                         
                           Direct and Guaranteed Farm Operating
                          Loans Made From April 4, 1996, Through
                             June 30, 1998, to Borrowers Who
                          Previously Had Loans Restructured With
                                     Debt Forgiveness

                                  (Dollars in millions)

                        Direct loans          Guaranteed loans          Total loans
                   ----------------------  ----------------------  ----------------------
                                                                                Amount of
                    Number of   Amount of   Number of   Amount of   Number of         new
Fiscal year\a       borrowers   new loans   borrowers   new loans   borrowers     loans\b
-----------------  ----------  ----------  ----------  ----------  ----------  ----------
1996                      103        $5.1          45        $6.2         148       $11.3
1997                      180         8.3          83        10.9         263        19.2
1998                      354        18.6          40         5.2         394        23.7
=========================================================================================
Total\b                   534       $32.0         156       $22.2         690       $54.2
-----------------------------------------------------------------------------------------
\a The time period covered in each fiscal year is as follows:  April
4, 1996, through September 30, 1996, for fiscal 1996; October 1,
1996, through September 30, 1997, for fiscal 1997; and, October 1,
1997, through June 30, 1998, for fiscal 1998. 

\b Figures may not add to the total amounts because of rounding. 
Also, the number of borrowers does not add to the total; rather, the
total represents discrete borrowers who received farm operating
loans--that is, if a borrower received a loan in more than 1 fiscal
year, the borrower is counted only once in the total. 

Source:  GAO's analysis of records from FSA's Finance Office. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :6

We provided a draft of this report to USDA for review and comment. 
We met with Farm Service Agency officials, including the Deputy
Administrator for Farm Credit Programs, the Director of the Loan
Servicing and Property Management Division, and the Deputy Director
of the Loan Making Division.  The agency generally agreed with the
material contained in the report and offered technical changes and
suggestions for clarifying the report.  We made these changes and
incorporated these suggestions as appropriate. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :7

To provide information on the portfolio, losses, and new farm
operating loans, we obtained and analyzed information from the
computerized databases in FSA's St.  Louis Finance Office, where
financial and statistical data on farm loans are maintained.  We did
not verify the accuracy of the information contained in these
databases.  In addressing the losses incurred by FSA on direct farm
loans and the new farm operating loans to borrowers who previously
received debt forgiveness when their loans were restructured, we
reviewed the basic statutory authority for the farm loan programs,
which is contained in the Consolidated Farm and Rural Development
Act, as amended, and our prior reports.  In addition, we reviewed the
farm loan provisions in the 1996 Farm Bill and in the act that
provided supplemental appropriations for USDA for fiscal year 1996. 
We performed our work from September through October 1998 in
accordance with generally accepted government auditing standards. 


---------------------------------------------------------- Letter :7.1

As agreed, unless you publicly announce its contents earlier, we plan
no further distribution of this report until 30 days from the date of
this letter.  At that time, we will send copies of this report to the
appropriate Senate and House committees; interested Members of
Congress; the Secretary of Agriculture; the Administrator of FSA; the
Director, Office of Management and Budget; and other interested
parties.  We will also make copies available to others upon request. 

Please call me at (202) 512-5138 if you or your staff have any
questions.  Major contributors to this report are listed in appendix
II. 

Sincerely yours,

Robert E.  Robertson
Associate Director, Food
 and Agriculture Issues


YEARLY INFORMATION ON WRITE-OFFS
OF FARM LOANS
=========================================================== Appendix I

This appendix contains information on the farm loans written off by
the Farm Service Agency (FSA) in each year from fiscal year 1989
through fiscal year 1997.\9 For example, table I.1 shows that more
than $1 billion was written off through debt settlements in 6
different years during this 9-year period.  Table I.2 shows that far
more borrowers had loans written off through the debt settlement
process each year than through the other two processes combined. 
Table I.3 shows that a larger amount was written off each year for
emergency disaster loans than for any other type of loan.  However,
table I.4 shows that more borrowers had farm operating loans written
off each year than any other type of loan. 



                               Table I.1
                
                Total Dollar Amount of Direct Farm Loan
                   Losses, by Type of Loan Servicing,
                     Fiscal Years 1989 Through 1997

                         (Dollars in millions)

                                                      Debt
                        Restructur                 settled
                           ed with      Buyout        with
                            write-        with      write-
Fiscal year                   down   write-off       off\a     Total\b
----------------------  ----------  ----------  ----------  ==========
1989                          $762        $913      $1,649      $3,323
1990                           353         643       1,830       2,825
1991                            94         255       1,404       1,753
1992                            63         178       1,440       1,681
1993                           213         182       1,171       1,566
1994                            96         116         964       1,176
1995                            52          45         847         944
1996                            30          74       1,146       1,250
1997                            17           9         612         638
======================================================================
Total\b                     $1,679      $2,413     $11,063   $15,155\c
----------------------------------------------------------------------
\a Debt settled with write-off includes borrowers whose accounts were
resolved through bankruptcy. 

\b Figures may not add to the total amounts because of rounding. 

\c The $15.2 billion of losses equals $17.4 billion in constant 1997
dollars. 

Source:  GAO's analysis of records from FSA's Finance Office. 



                               Table I.2
                
                 Number of Borrowers Whose Direct Farm
                Loans Were Reduced or Forgiven, by Type
                  of Loan Servicing, Fiscal Years 1989
                              Through 1997

                                                      Debt
                        Restructur                 settled
                           ed with      Buyout        with
                            write-        with      write-
Fiscal year                   down   write-off       off\a       Total
----------------------  ----------  ----------  ----------  ==========
1989                         4,601       4,376      11,900      20,877
1990                         2,486       2,788      12,323      17,597
1991                           646       1,207       7,786       9,639
1992                           344         707       7,346       8,397
1993                         1,855       1,244       6,177       9,276
1994                           847         681       4,675       6,203
1995                           451         295       3,950       4,696
1996                           275         281       3,486       4,042
1997                           160          59       2,948       3,167
======================================================================
Total\b                     10,994      11,638      57,196      79,828
----------------------------------------------------------------------
\a Debt settled with write-off includes borrowers whose accounts were
resolved through bankruptcy. 

\b The number of borrowers does not add to the total; rather, the
total represents discrete direct loan borrowers over the 9-year
period--that is, if loan servicing occurred for a borrower in more
than 1 fiscal year, the borrower is counted only once in the total. 

Source:  GAO's analysis of records from FSA's Finance Office. 



                               Table I.3
                
                Total Dollar Amount of Direct Farm Loan
                 Losses, by Type of Loan, Fiscal Years
                           1989 Through 1997

                         (Dollars in millions)

                          Farm      Farm  Emergenc
                      ownershi  operatin         y
Fiscal year                  p         g  disaster   Other\a   Total\b
--------------------  --------  --------  --------  --------  ========
1989                      $406      $651    $1,591      $676    $3,323
1990                       372       566     1,318       570     2,825
1991                       236       333       841       343     1,753
1992                       217       314       824       326     1,681
1993                       221       353       708       283     1,566
1994                       154       246       570       205     1,176
1995                       128       201       461       154       944
1996                       106       182       812       149     1,250
1997                        76       134       332        95       638
======================================================================
Total\b                 $1,917    $2,979    $7,458    $2,802  $15,155\
                                                                     c
----------------------------------------------------------------------
\a "Other" covers economic emergency, soil and water, and recreation
loans. 

\b Figures may not add to the total amounts because of rounding. 

\c The $15.2 billion of losses equals $17.4 billion in constant 1997
dollars. 

Source:  GAO's analysis of records from FSA's Finance Office. 



                               Table I.4
                
                 Number of Borrowers Whose Direct Farm
                Loans Were Reduced or Forgiven, by Type
                of Loan, Fiscal Years 1989 Through 1997

                          Farm      Farm  Emergenc
                      ownershi  operatin         y
Fiscal year                  p         g  disaster   Other\a     Total
--------------------  --------  --------  --------  --------  ========
1989                     5,222    11,643    11,156     6,309    34,330
1990                     4,657     9,902     8,622     5,082    28,263
1991                     2,913     5,432     4,709     2,818    15,872
1992                     2,579     4,812     4,235     2,434    14,060
1993                     2,990     5,506     4,357     2,463    15,316
1994                     1,953     3,598     2,909     1,609    10,069
1995                     1,537     2,863     2,086     1,107     7,593
1996                     1,193     2,449     1,871       918     6,431
1997                       926     1,919     1,280       701     4,826
======================================================================
Total\b                 23,970    48,124    41,225    23,441   136,760
----------------------------------------------------------------------
\a "Other" covers economic emergency, soil and water, and recreation
loans. 

\b The total number of borrowers includes some borrowers who are
counted more than once because they had more than one type of direct
loan for which losses were incurred. 

Source:  GAO's analysis of records from FSA's Finance Office. 


--------------------
\9 The information in this appendix covers debt relief provided on
farm loans by FSA, which currently operates the U.S.  Department of
Agriculture's (USDA) farm loan programs, or by a predecessor USDA
agency or office.  The information may differ somewhat from
previously published figures for direct farm loan losses as a result
of database adjustments. 


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix II

Charles M.  Adams, Assistant Director
Jerry D.  Hall
Patrick J.  Sweeney
Larry D.  Van Sickle


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