House Bill Would Boost Loan
Availability For Ag Sector

WASHINGTON —(AP)— The House is trying to ease a farm credit crunch by making as much as $500 million available to guarantee loans to farmers and ranchers.

Under a bill passed Tuesday by voice vote, the money is not to be lent directly to farmers but is to be used to back up loans and ward off default.

The Agriculture Department is running out of money to make loans at a time when demand for them is high because of natural disasters and low commodity prices.

The money also is intended to help farmers until Congress has a chance to vote on whether to grant President Clinton's request for $153 million in extra money this year for emergency loans and for hiring temporary government workers to handle a heavy demand for disaster help.

Use of the money targeted in Tuesday's House bill is limited until April 1 to a program for beginning farmers and ranchers. After that, the government may make it available to anybody eligible for USDA-guaranteed loans.

The House bill would make the money available for loan guarantees immediately because the funds are not being used and are not expected to be used, according to a statement released by the Republican House Conference.

``Freeing up the Beginning Farmer guaranteed loan money, which is not being used, will be of great benefit to agricultural producers,'' Rep. Harold Rogers, R-Ky., said.

``We have to take action to make sure they survive and give them an opportunity to prosper,'' said Rep. Bob Etheridge, D-N.C.

The legislation also requires the agriculture secretary to give priority to guaranteed loan applications from beginning farmers and ranchers under any additional money Congress allocates for this fiscal year.

No corresponding bill has yet been introduced in the Senate.

The House measure's sponsor, Agriculture Committee chairman Rep. Larry Combest, R-Texas, said he's holding Washington bureaucrats accountable for ``failing to deliver farms disaster aid to producers authorized by Congress nearly four and a half months ago.''

The department's plans for distribution of disaster relief payments means farmers probably won't see the money until May. ``Help is many months past producers' expectations and the department's own promises,'' Combest said.

On Friday, Clinton said economic turmoil in Asia and elsewhere continues ``to make it difficult for American farmers and ranchers to export their goods overseas.''

The president's proposal would provide $1.1 billion in direct loans or loan guarantees for an estimated 10,000 producers who can't get credit from private sources.

The bill is H.R. 882.