March 12, 1986
The President has authorized the Secretary of Agriculture to transfer $700 million from the Emergency Farm Loan Program to the Direct Operating Loan Program in order to assure that American farmers will have adequate financing to plant new crops this spring. The President made his decision yesterday afternoon after his meeting with the Economic Policy Council.
The demand for Farmers Home Administration direct operating loans will exceed the $1.5 billion that is available for this fiscal year so, thereby, the transfer of emergency loans. Fourteen states have already exhausted their FmHA direct operating loan allocations and cannot offer additional direct loans with the present funding.
The President also authorized an additional $50 million to be transferred from the Guaranteed Business and Industry Loan Program to the Guaranteed Operating Loan. The President also intends to sign the Food Security Improvements Act of 1986. These are technical corrections that are being made to the farm bill that was passed at the end of last year. We've had some serious questions about it, and we worked with Congress on it. And we're now satisfied that the bill has been modified to the point where we can accept it.
The most troublesome point to us was the advance loan provision, and we wanted it clarified. It was introduced by Senator Harkin, and we wanted to clarify it so that the provision would be discretionary, not mandatory. Mandatory would have been extremely costly. In fact, if it had been held as mandatory, it could have run anywhere from $500 million to $1 billion over the next 3 years. We are still concerned about the cost of the Harkin amendment. We will exercise discretion in this funding provision.
Note: Larry M. Speakes read the statement to reporters at 9:26 a.m. in the Briefing Room at the White House.