In an Aug. 27 editorial arguing against a Farmer Mac -- a secondary market for farm mortgages -- The Post makes tongue-in-cheek suggestions for a ''Steely Mac'' for steel, ''Greasy Mac'' for oil and ''Threaddie Mae'' for textiles that, though humorous, completely miss the point.

The point is that farmers need and deserve access to a greater variety of lenders and loan terms. A secondary market is essential to give them that access. Increased availability of long-term credit would address one of the most pressing problems farmers face today: the cost of loans and the terms under which they are available. That is why the concept has broad-based bipartisan support among more than a dozen national farm and commodities organizations.

A secondary market for farm mortgages would promote competition among agricultural lenders and would ensure that American farmers do not become dependent on a single source of long-term credit. The track record of existing secondary markets for residential homes shows that taxpayers have not had to shoulder the costs of defaults.

A bill currently before Congress (H.R. 3030) would set up a secondary market for agricultural mortgages on terms that would require all commercial lenders to be responsible forlosses up to 10 percent of the value of mortgages in any pool they put together. This approach would give taxpayers a much lower risk of loss than they have under the current system.

The steady erosion of the commercial lenders' share of the farm mortgage market that has occurred during the past two decades must be stopped. A secondary market for farm mortgages would open up agricultural mortgage lending to the whole financial community.

Congress has an opportunity to modernize agricultural lending and to preserve the value of farm land by creating a secondary market for farm mortgages. To remove the provision from the House Agriculture Committee bill would do a serious disservice to farmers and to other taxpayers. RICHARD V. MINCK Executive Vice President American Council of Life Insurance Washington