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GGD-86-5 1 (1985-10-18)

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 REPORT BY THE US.




 General Accounting Office









 Farm Credit Administration's Liquidation of

 Production Credit Associations


 Eight Members of Congress asked GAO to review
the liquidation of insolvent borrower-owned coop-
eratives within the Farm Credit System that provide
short- and intermediate-term credit to farmers and
ranchers. In examining four associations during
1983 and 1984, GAO found that

  --the Farm Credit Administration's criteria for
  determining whether an association is insolvent
  and should be liquidated were based on its abil-
    ity to comply with the terms of its financial obli-
    gations with its federal intermediate credit
    banks,

  --the liquidation procedures used were consist-
  ent with those used by other financial regula-
  tors,
                                                            128167
  --although some delays occurred in granting new
  loans to customers residing in the service area
  of the associations in liquidation, loans were
  available from adjoining associations, and

  --the Farm Credit Administration's decision not to
  use a revolving fund to assist the insolvent
  associations was a proper decision.



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                                                            GAO/GGD-86-5
              0                                         OCTOBER 18, 1985

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