SHORT TERM CREDIT INVESTMENT FUND

This fund is available to the Governor of the Farm Credit Administration as a revolving fund for investment in the Class A capital stock of the Federal intermediate credit banks and Class A and Class C stock of the production credit associations.

On December 31, 1968, the Government's investment in the Class A stock of the Federal intermediate credit banks was retired in full, thus making them privately owned. Of the $107,496,625 paid the Treasury for the capital stock, $43,839,120 was credited to proprietary receipts of the general fund and $63,657,505 was returned to the revolving fund. The last of the Government's investment in the production credit associations was also repaid. There is now $111,707,505 available in this fund but no investment of Government capital in the Federal intermediate credit banks and production credit associations is anticipated in the near future.

BANKS FOR COOPERATIVES INVESTMENT FUND

This fund is available to the Governor of the Farm Credit Administration for investment in Class A capital stock of the banks for cooperatives.

The last of the Government's investment in the banks for cooperatives was retired on December 31, 1968, which made them privately owned. The amount in the fund available to the Governor is $148,091,211. No investment of the Government capital in any of the banks is anticipated in the near future.

PASSENGER MOTOR VEHICLES

The Farm Credit Administration hires one automobile. This automobile is used primarily by the Governor's office for transportation to and from official meetings and conferences in Washington, D. C., with other Government officials, and with congressional bodies.

The 1975 budget estimates do not include funding for the purchase of any autos.

FARM CREDIT ORGANIZATION

Mr. JAENKE. The Chairman of the Federal Farm Credit Board will cover our organization and some highlights of last year.

Mr. ATKINSON. Thank you, Governor, Mr. Chairman, and members of the committee: I, too, express my appreciation to the committee for the privilege of meeting with you, and make a few remarks on the structure of the farm credit system, how we are doing and where we are going.

First, I would like to say thank you to the Members of Congress on behalf of the Federal Farm Credit Board and Farm Credit Administration for the splendid cooperation that we have had from the Congress in recent years. You gave us additional tools that we need to better serve the farmers, ranchers, and cooperatives of this country.

I am referring primarily to the Farm Credit Act of 1971 which we have now been operating under for 2 years.

I am going to now use a chart or two to outline the structure of the farm credit system.

[The information follows:]

Mr. ATKINSON. We have 12 farm credit districts in the country. The number of States in a district varies from one to eight. The Springfield district serves the eight New England States.

The Springfield district, which is district No. 1, is represented by Mr. Luther Jennejahn from Hilton, N.Y. He is a fruit and dairy farmer.

The second district is represented by Mr. Homer Remsberg from Middleton, Md. He is a dairy farmer.

I represent the third district, which consists of the two Carolinas, Georgia and Florida with district offices in Columbia, S.C.

The fourth district, the Louisville district, is represented by Mr. Kenneth Probasco, who is from Worthington, Ohio. He is general manager of Landmark Cooperatives.

The fifth district, which is the New Orleans district, is represented by Mr. Ernest Spivey from Jackson, Miss.

The sixth district, the St. Louis district, is represented by Mr. Melvin Sims.

The seventh district is represented by Mr. Alfred Underdahl from North Dakota.

The eighth district is represented by Mr. Everett Spangler, who is going off the Board this year along with Mr. Remsberg from the second district. The President is now in the process of selecting two new directors.

The ninth district, Wichita, is represented by Mr. James Dean, Hutchinson, Kans.

The 10th district is represented by Mr. E. G. Schuhart II from Dalhart, Tex.

The 11th district, Berkeley, is represented by Mr. Earl Smittcamp, I from Clovis, Calif.

The 12th district is represented by Mr. Riddell Lage, of Hood River, Oreg.

The State of Hawaii is served by the Berkeley district. A new PCA was organized in Hawaii just last November. This is the first newly chartered PCA for some time.

Alaska is served by the Spokane district and Puerto Rico is served by the Baltimore district.

This will give you some idea as to the overall scope.

Two directors are appointed by the President each year for a 6year term. They are not eligible for reappointment.

We have a 13th member, Mr. Elton Smith from Caldonia, Mich., appointed by the Secretary of Agriculture and who serves at the pleasure of the Secretary

Now, the district and association organization. Each district has a board of directors consisting of seven members. Two members are elected by the Production Credit Associations; two members are elected by the Federal Land Bank Associations; two members are elected by the patrons of the Banks for Cooperatives; and the seventh member is appointed by the Governor of the Farm Credit Administration.

FUNCTIONS OF THE BOARD

These district boards adopt policies within guidelines set by the Farm Credit Administration and the Federal Board. These district policies regulate activities of district banks and associations.

The 13-member Federal Farm Credit Board is a part-time board. The Board appoints the governor, and the governor, in turn, employs a staff. The governor of the Farm Credit Administration is responsible for supervision, and examination of the districts. The district banks also review credit and operations activities of the associations. During 1973, we improved some of the policies and regulations of the Farm Credit Administration. We defined more clearly the role of the Farm Credit Administration in the Farm Credit System.

ROLE OF FARM CREDIT ADMINISTRATION

The primary purpose of the System is to improve the economic wellbeing of farmers, ranchers, and their cooperatives by providing them the best possible credit service at the lowest possible cost, consistent with sound operations.

In addition to policies established by regulation, the Federal Board has established policies to direct the functions of the Farm Credit Administration.

We have streamlined the supervision aspect. We have improved the examination function. We adapted a three-region approach throughout the country on examinations. One region is housed in Columbia, S.C., another in St. Louis, and the third in St. Paul. Each regional examination staff is responsible for the examination of four farm credit districts.

We have tried to improve the coordination of lending and management, service policies, and activities of the institutions of the system vital to the goal of efficient credit service to the borrowers.

The Farm Credit Administration will continue to represent the system at the national level-with the Congress, Government agencies, investors, and the general public in the dissemination of information and making reports. It shall, in accordance with the law, recommend legislation after appropriate consultation with the district boards, the grassroots level, the bank management, national committees, and other interested groups.

We keep the public interest in mind at all times to see that it is protected through comprehensive regulation, supervision, and examination of farm credit institutions and their activities. We try to provide the necessary leadership to assure that the system maintains the highest standards of good corporate citizenship and responsive service to present and future borrowers.

REGULATIONS REVISED

During 1973 we spent a great deal of time improving the regulations. The act was signed into law in December of 1971. We had to draw up a complete new set of regulations in 1972. Naturally, some errors were made. So during 1973 we reviewed our regulations drawn up in 1972 and tried to improve these regulations.

We kept in mind, in updating these regulations, our goal of giving more authority back to the districts, thereby getting the Farm Credit Administration just about completely out of the approval of loans. Another area for which a new regulation came into effect during the year 1973 covered the financing of feedlots. We realized that possibly we were not doing the job that we should be doing in financing feed