The Nation : Farm Credit Crunch Seen

Agriculture Secretary John R. Block, predicting “another round of severe credit problems” for farmers in coming months, said the Farmers Home Administration will be unable to accept new borrowers. As a result of the credit crunch earlier this year, Farmers Home made a record $3 billion in operating loans. Block said the agency hopes to direct new borrowers to banks and credit associations for loans, which would be supported by federal guarantees. The Farm Credit System, the cooperative farm lending entity that holds one-third of farm debt, is also experiencing financial problems. Block said the system has more than $6 billion of its own reserves, but may require future federal aid.