54 



I do make reference there on page 6 to the chairman's favorite 

 charts — his most famous charts that we have talked about earlier 

 this morning. Mr. Chairman, this is of great concern for us because 

 every time we talk about budget cuts, agriculture is the first on the 

 chopping block, as your charts well point out. 



Let me jump to page 7 with the charts. On figure 3 you will 

 notice that although it is showing somewhat of an increase in the 

 balance sheet for the agricultural sector, in real terms we see that 

 equity has declined from the $636 billion in 1988 to somewhere pro- 

 jected between $570 to $580 billion in 1993. 



This is a very bad trend for our folks. Many of them think they 

 are working harder and not seeing any increase in their income. 



If you will drop down to the bottom chart on that page, it looks 

 at who is making agricultural loans. You will see that short-term 

 loans with the commercial banking institutions are going up. You 

 will see a slight increase in individuals and others. That is primary 

 suppliers offering operating loans to producers. Usually that is at a 

 much higher rate of interest than what they might get from the 

 old production credit associations or a commercial bank. 



Probably the worst figure on that is the Farmers Home Adminis- 

 tration role. You will see that it is declining there at a time when 

 Farmers Home should be getting in to help beginning and younger 

 farmers increase. Farmers Home has sent out some 31,579 notices 

 of service to its borrowers. Only 7,952 of those have responded. 

 That is, 75 percent have not responded. So we are going to see 

 them getting foreclosure notices and we're going to have another 

 go-around, Mr. Chairman. 



Finally, the marketing loan program that has been developed as 

 a part of the Snap Act provision without the GATT is not going to 

 be workable in our estimation. We don't think the loan rate is high 

 enough. If it was high enough to actually operate, the cost would 

 be tremendous. 



Mr. Chairman, as I looked at your committee this morning, I saw 

 a lot of new faces. There has been change; there is a new adminis- 

 tration; the American voters have asked for change. If we do not 

 see a change, Mr. Chairman, we think the outlook is bleak for agri- 

 culture. We at Farmers Union stand ready to work with you and 

 the new Secretary of Agriculture to help develop that change for 

 the good of all America. 



Thank you, sir. 



[The prepared statement of Mr. Dunn appears at the conclusion 

 of the hearing.] 



The Chairman. Thank you very much. We appreciate your excel- 

 lent testimony. It will be very helpful to us. 



Mr. Buntrock. 



STATEMENT OF GRANT BUNTROCK, DIRECTOR, WASHINGTON 

 OFFICE, NATIONAL FARMERS ORGANIZATION 



Mr. Buntrock. Thank you, Mr. Chairman. 



On behalf of the National Farmers Organization, I too want to 

 commend the chairman and vice chairman for allowing us the op- 

 portunity to appear before you today. 



