Farm-state congressmen are drafting a bipartisan federal financial-aid package for the beleaguered Farm Credit System, although the administration continues to give no hint that it will support such help.
Rep. Ed Jones (D-Tenn.), chairman of the House Agriculture subcommittee on conservation, credit and rural development, said yesterday that the bill would provide an as-yet undetermined amount of federal aid, contingent on management reforms in the farmer-owned lending system.
Officials of the Farm Credit System, which holds about one-third of the nation's $214 billion agricultural debt, have told Congress that they need a $5 billion federal loan before year's end to keep the nationwide financial network afloat.
The bailout proposal, to be introduced in the next few days, comes amid reported disagreement among top administration officials about whether federal aid should be given to the FCS, and if so, how much.
Last week, President Reagan approved a position paper from his Economic Policy Council that would require FCS management changes and more regulatory muscle for the Farm Credit Administration before consideration of financial aid.
A senior administration official vigorously denied reports on Capitol Hill and elsewhere that White House chief of staff Donald T. Regan quashed an Economic Policy Council proposal to extend a $3 billion line of credit to the FCS.
"It's a dead issue," this official said. "There is no real difference." He described the internal debate as more tactical than substantive, with agreement on requiring the FCS structural changes before financial aid is considered.
But a key congressional Republican, Rep. Edward R. Madigan (Ill.), ranking GOP member of the Agriculture Committee, said: "They have analyzed the situation, and they know some money is going to be necessary, but they are hard-lining it to make sure they get the reforms that they want. I think that is a responsible position."
Madigan said he supports the line-of-credit idea and quick congressional action on FCS reforms because he and other farm-state Republicans and Democrats "are concerned about the ability of the Farm Credit System to continue to issue bonds at competitive rates . . . there is a necessity to send a signal that Congress is prepared to act on this."
Jones said he will attempt to move his legislation to passage before Congress adjourns this year, although he conceded that Senate action would be more problematic. "We have the votes to do it, but I don't know what the Senate would do," he said.
Jones added, "If the House acted soon, it would help the bond market and stop the foreclosures that the FCS is carrying out around the country. We have got to do something very soon or this Congress will be out of business."
Donald E. Wilkinson, governor of the Farm Credit Administration, told Congress last week that the FCS will need at least $6 billion of federal aid within the next 18 to 24 months to avoid collapse.
Analysts say the system of 37 banks and more than 700 lending associations, plagued by a growing portfolio of bad debts, faces more trouble with the prospect of continuing low farm prices and abandonment of the system by its more solvent borrowers.
Recurrent reports of distress in the FCS have touched off a flurry of activity on Capitol Hill during the last month, with farm-state Republicans, wary of the 1986 elections, increasing pressure on the administration to help the system.