Saxby Chambliss: “The particular provision deals with direct operating loans made by the Farm Service Agency to farmers versus guaranteed…”

“The particular provision deals with direct operating loans made by the Farm Service Agency to farmers versus guaranteed operating loans that are made by the Farm Service Agency that are guaranteed by banks. The problem that I seek to address with this particular provision is that the default rate on loans, direct loans made by the Federal Government, is somewhere historically in the 10 to 12 to 14 percent range, whereas the default rate on guaranteed loans has historically been more in the range of 1 to 2 to 3 percent. Now, that is a lot of money that the Federal Government is losing because of the direct operating loans made by the bank. What we simply sought to do was to basically get the government out of the farm lending business and let the financial institutions make those loans.”