Opening Statement for
Senator Richard Lugar

Hearing on Availiability of Credit in Rural America

The Committee meets today to examine the availability of credit in rural America. Many changes are taking place in rural America today that are likely to have a tremendous impact on the economies, and the credit needs, of rural Americans. Agricultural sectors are consolidating, as are financial institutions and retail businesses.

Recent studies have looked at the performance of rural financial markets and how those markets may be improved. The studies will help Congress evaluate and address the ever-changing needs of rural enterprises, both agricultural and non-agricultural.

This Committee has a particular interest in rural credit issues, including both the agricultural and non-agricultural sectors, as shown by direction to the Department of Agriculture in last year's farm bill. The Federal Agriculture Improvement and Reform Act of 1996 required the Secretary of Agriculture to study and report on the demand for and availability of credit in rural areas for agriculture, housing and rural development. We will be hearing from USDA regarding the results of that study. In addition, representatives from the Federal Reserve Bank of Kansas City and the Rural Policy Research Institute will discuss their recently published reports and studies. This morning's hearing will allow us to discuss their findings on rural credit needs and the improvements needed in credit delivery.

Our distinguished colleague from Utah, Senator Robert Bennett, has taken a special interest in addressing the credit needs of rural America. Senator Bennett will be testifying shortly on his experience with rural credit needs and possible solutions to those needs. I thank the Senator and I look forward to working with him on this important matter.

We also look forward to hearing from representatives of the Federal Agriculture Mortgage Corporation (Farmer Mac), the Independent Bankers Association of America, the Farm Credit Council and the American Bankers Association who will provide insight into their ideas and concerns about the availability of rural credit.

As we listen to the various perspectives represented here today, it is the responsibility of this committee to balance the desire to provide additional credit availability with any increased risk to the taxpayer.

Before we turn to Senator Bennett, I yield to the distinguished ranking member of our committee, Senator Harkin.