June 23, 1999

The Federal Agricultural Mortgage Corporation (Farmer Mac) has made progress fulfilling its statutory mission since the 1996 revisions in its charger, and officials want that known. "We believe several recent media items have misread" a report from the General Accounting office and "fixated on a few negative comments," says Farmer Mac President and CEO Henry D. Edelman.

GAO noted that by two key measures - the growth in loan purchases and issuing mortgage-backed securities - Farmer Mac has made progress. GAO also determined that Farmer Mac was financially viable at the end of 1998 based on a financial assessment that assumed outstanding guaranteed securities of only $1.5 billion and suggested that Farmer Mac's future viability would depend on continued growth and favorable conditions in the agricultural sector.

"Three short months after the end of the period studied by GAO, March 31, Farmer Mac had increased its outstanding guaranteed securities and mortgage loans held for sale to $1.87 billion. I think it's fair to say that GAO's scenario assuming no growth was mooted before they published their report on June 10," Edelman said.

Based on published financial reports, from the end of 1995 to the end of March 1999, Farmer Mac's outstanding guaranteed securities increased from $400 million to about $1.9 billion, and its capital increased from $12 million to $83 million. During 1998, Farmer Mac reported loan purchases had increased 67%, total outstanding securities had increased 46% and net income had increased 24%.