Farmers Home Administration: Farmer Program Assistance to Beginning Farmers

GAO discussed the Farmers Home Administration's (FmHA) assistance to individuals interested in starting farming operations. GAO noted that: (1) in fiscal year (FY) 1988, 81 percent of the $2.2 billion that FmHA loaned or guaranteed went to individuals who already held FmHA loans and were not likely to be just starting farming operations; (2) only 19 percent of FmHA loans went to new customers who may or may not have been beginning farmers; (3) FmHA sold 37 of 72 selected farm properties that were in inventory or that were sold from inventory between January 1989 and May 1990; (4) new farmers purchased only 5 of the 37 properties and, of the remaining properties, previous owners purchased 14 and established farmers purchased 18; (5) factors that explain why so few beginning farmers purchased FmHA properties include past FmHA sale practices that give previous owners a preference over beginning farmers, the possibility that few beginning farmers are entering the market, and the appropriateness of the FmHA inventory property for beginning farmers; (6) only 11 of the 72 properties reviewed were appropriate for beginning farmers; and (7) the 1990 Farm Bill added beginning farmers to those given preference in purchasing FmHA farm properties, but may be limited since such properties are not always appropriate for them and former owners have preference in purchasing such properties.