Conservationists, charging that agricultural lenders have ignored basic soil conservation steps in managing their multimillion-acre inventory of foreclosed farm land, urged Congress yesterday to tie federal farm credit assistance to new conservation requirements.
Their urgings were warmly received by a Senate Agriculture subcommittee, whose chairman, Sen. Wyche Fowler Jr. (D-Ga.), called the hearing in reaction to reports of increasing environmental abuses on land held by insurance companies, private banks, the Farm Credit System and the federal Farmers Home Administration (FmHA).
By most estimates, these lenders have accumulated more than 10 million acres of land -- much of it marginal and unproductive -- as a result of the rash of farm foreclosures and bankruptcies since 1982.
"I don't know if we can make the banks and insurance companies understand that the value of land is not the same thing as its price, that money is not always the ultimate measure of worth, but we've got to try, in this case," Fowler said.
Sen. Christopher S. (Kit) Bond (R-Mo.) agreed in part. Bond said it was "very important" for lenders' inventoried land to be returned to family farmers as soon as possible because "an owner has a better incentive to be a steward than a tenant."
Their remarks were punctuated by testimony from Ron Kroese of the Land Stewardship Project in Minnesota and farmer Randy Railsback of Hamilton, Mo., who described examples and showed slides detailing conservation deterioriation and increased erosion on land taken back from farmers by insurance firms.
"Production on these lands has become No. 1 rather than conservation," Kroese said. "It is impossible to separate degradation of soil and water from the economic problems of agriculture. . . . We urge that conservation requirements be added to any bailout legislation."
Other witnesses, including Kenneth A. Cook of the Conservation Foundation and Ralph Grossi of the American Farmland Trust, agreed. Cook said, "Farm credit assistance legislation offers an opportunity to establish a consistent set of conservation policies for the majority of farm lending -- a level playing field on which all lenders would play by the same rules now in place for FmHA."
The House Agriculture Committee has begun final action on legislation that would provide an infusion of federal money to the failing Farm Credit System, which has an inventory of about 2.5 million acres, and federal guarantees for a secondary market for farm real estate loans.
The committee continued work yesterday, still undecided on the secondary market issue, which is opposed by the Reagan administration, and structural reforms of the Farm Credit System. Also at issue were a source of funds for the credit system bailout, which could require $6 billion, and more changes in FmHA procedures, which also are opposed by the White House.
Chairman E (Kika) de la Garza (D-Tex.) indicated that he expects the panel to complete its work this week so that the House can take up the measure after Labor Day and send it to the Senate for final action before fall adjournment.
At the Senate hearing, however, insurance and Farm Credit System representatives took issue with charges that they had ignored conservation in managing inventories of foreclosed lands. Instead, they said, Congress should modify federal law to make inventoried land eligible for the federal Conservation Reserve Program.
John M. Lord, a second vice president of the John Hancock Co., a major holder of farm land, and Charles Miehe, representing the Farm Credit System's St. Paul district, said that land sales are discouraged by a requirement that new owners must wait three years before they can bid land into the reserve, which pays farmers to idle highly erodible land for 10 years.