The Farmers Home Administration has run out of operating-loan money in 17 states, raising the possibility that farmers in those areas will be unable to finance their 1983 plantings unless the White House orders emergency remedies.
Department of Agriculture officials made the disclosure yesterday to a Senate Appropriations subcommittee reviewing the USDA's fiscal 1984 budget proposals.
Undersecretary Frank W. Naylor Jr. and FmHA Administrator Charles W. Shuman dropped the bombshell as subcommittee members, led by three Republicans, were giving them a verbal going-over on farm loan, housing and rural electrification issues.
Naylor declined to describe the loan situation as a crisis, but he said there was no immediate solution to the money shortage for the 17 states that have exhausted loan funds for the third quarter, which began last Friday.
The states are allotted FmHA loan money on a quarterly basis. Although Naylor and Shuman acknowledged that fourth-quarter money remains in the coffers, they insisted that it could not be advanced to carry the states through the crucial spring high-demand period.
Naylor said that discussions were going on in the administration about the situation, but said no decision has been made on how to deal with the shortfall. Naylor and Shuman gave no indication of how many farmers might be denied loans in the 17 states.
But Shuman said he expects an additional 12,000 or so farmers to be approved nationally for 1983, with many of them, presumably, in the states where the third-quarter money is gone. Shuman said that $1 billion of the $1.4 billion operating loan fund has been committed for fiscal 1983.
Visibly disturbed, Sen. Thad Cochran (R-Miss.), the subcommittee chairman, told the officials that Congress "assured farmers the current budget was sufficient to service all of them. That is a commitment that has to be kept. We want some action soon to be sure adequate money is available."
"What if you fail to get additional money for those 17 states?" he asked. "Are you asking the Office of Management and Budget for a supplemental appropriation?"
"We're having discussions now on the amount needed," Naylor said. "When the administration completes its review, we will advise you."
The affected states are Alabama, Arkansas, Georgia, Illinois, Louisiana, Mississippi, Montana, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, Tennessee, Texas, Washington and Wyoming.