no 



time, this farmer is supposed to show a positive cash flow and positive 

 i-cpayabiiity. The 10 calves we lost didn't represent a forty percent loss, but 

 we were able to show a positive cash flow. We recommend that the 

 eligibility requirements for emergency loans be changed to be workable for 

 actual farm loss situations. 



Many farmers in South Dakota lost much more than forty percent of their 

 crops last year and this year. If the program doesn't change from last year, 

 most won't get their loans in time for spring planting in 1994. Last year in 

 Deuel County, South Dakota, seventeen producers applied for FmHA 

 emergency loans in the fall of the year, but six tnonths later still didn't have 

 word from their FmHA office. This is supposed to be a "fanner friendly" 

 administration, and we believe the FmHA emergency loan program must 

 change to live up to this claim. I wonder if the foreign countries receiving 

 billions of dollars in assistance from the U.S. government have had to go 

 through as much paperwork as America's family famiers. 



Our major concern is that farmers who won't be able to make tlieir 

 principal and interest payments to tlie FmHA this year due to the disaster be 

 allowed to defer the payments and put them on tlie end of their loan, without 

 having to become delinquent. This could be done by allowing producers 

 who are not yet delinquent, but who.se payments are coming due and who 

 can demonstrate an inablity to pay due to the weather disaster, the ability to 

 defer before becoming delinquent. Our members have met with the state 

 director of FmHA in South Dakota and the acting national FmHA director 

 and there are differences of opinion as to whetlier the law now allows FmHA 

 to do this. Tliere is no central policy for this type of deferral, but it is a 

 common sense forebearance option that the Farpi Credit System is now using 

 in disaster areas. 



Many dairy producers in my area have had their FmHA payments taken 

 out of their milk checks, so they are current on their loans, but they are in a 

 very tight spot financially. We recommend that those who can demonstrate 

 lost income due to the disaster be allowed to defer payments in 1994 to allow 

 them time to get back on their feet this year. 



We ask Congress to pass legislation allowing this type of deferral for 

 FmHA loans, without forcing a famier to become delinquent and go tlirough 

 the very costly, time consuming and bureaucratic loan servicing procedures 

 within FmHA. Once that happens, a producer's credit standing is 



