34 



Larifl Planning Report 



had been affected by an unusual climatic disturbance, 

 such as drought, storm, or hail. The appropriation 

 for 1931, occasioned by the widespread drought of 

 1930, was the first one to cover a very extensive area. 

 In 1 932 there was a departure from the previous poUcy 

 of hmiting loans to designated areas which had been 

 affected by unusual climatic distm-bances and loans 

 were authorized in any part of the United States where 

 farmers were unable to obtain loans for crop production. 



Table II summarizes the loan operations which, until 

 the organization of the Farm Credit Administration, 

 were administered by the Secretary of Agricvdture. 



Over very large areas in the northern Great Plains, a 

 substantial majority of the farmers have received seed 

 loans. In portions of the Dakotas, seed loans have 

 been recjuired in more than half the years of the last 

 decade. The cost to the Federal Government in 

 extending this type of emergency credit has been very 

 liigh because in the majority of instances these seed 

 loans have not and are not likely to be repaid. For 

 example, in 1 community selected at random in New 

 Mexico 34 seed loans were made in 1932. Of these, 

 only three were ever repaid, and then from other 

 sources than farm profits. Of all the loans nuide during 



1921 to 1933, inclusive, only 69 percent of the principal 

 had been collected by August 31, 1934. While subse- 

 f(uent collections will probably raise this ratio slightly, 

 it is evident that appreciable losses will be incurred. 

 The cost of making and collecting these lonns has been 

 substantially greater than the amount of interest 

 received. According to the first annual report of the 

 Farm Credit Administration, the administrative costs 

 for loans nuule in 1931 and prior years, exceeded interest 

 collected by $5()0,2S6 on December 31, 1933. Total 

 administrative expenses for the 1932 loans exceed 

 interest income by $2,462,822 and for 1933 loans, by 

 $1,141,857. 



These seed and crop production loans have been 

 available in 7 different years in the States of Montana 

 North Dakota, and Florida. Such loans have been 

 available for 6 years in South Carolina, North Carolina, 

 Georgia, Alabama, Virginia, New Mexico, Idaho, and 

 Washington. The frequency of the Federal emergency 

 loans, on a county basis, is indicated in figure 4. The 

 largest amount loaned in any one State during the 

 1921-34 period was $20,637,237 in North Dakota. The 

 next largest amounts went to Georgia, Arkansas, South 

 CaroliuM, ;ind North Carolina, in the order named. 



U S DEPARTMENT OF AGRICULTURE 



BUREAU OF AGRICULTURAL ECONOMICS 



Figure 4.— From 1921 to 1934 Federal seed loan funds were availahle in lu ditTerent years. The.se funds have been available most frequently in the spring-wheat-growing States 



and in the Southeastern cotton-growing States. 



