Farm Loan Delinquency at Historic Low

May 17, 2001

The Senate Agriculture Committee learned Wednesday that USDA's direct loan delinquency for farmers is the lowest in more than 20 years at 12.3%. Carolyn B. Cooksie, deputy administrator for farm loan programs at the Farm Service Agency, also said delinquent million dollar-plus direct loan accounts had been reduced from 748 at the end of fiscal year 1995 to 180 at the end of fiscal 2000. Delinquency in the guaranteed loan portfolio is at an all-time low of 1.83%, and dollar losses have remained low despite continuing growth of the portfolio, Cooksie added. In fiscal 2000, losses paid were only seven-tenths of 1% of the principal outstanding.

"This is particularly noteworthy because, at the same time, FSA loan volume has increased significantly--more than 65% in recent years," said Cooksie. In fiscal 1999 and 2000, FSA provided loans and loan guarantees totaling $7.5 billion to more than 71,000 family farmers. Of this total, 24,000 were beginning and socially disadvantaged farmers, who received assistance totaling $1.9 billion.

"I believe there is no single factor, but a combination of several different factors which led to these achievements," she said. One was that the 1996 farm law crated "strong incentives" for FSA borrowers to repay their loans. Also "the various payment and compensation programs enacted by Congress have affected many borrowers ability to repay FSA or their other creditors."