One Federal Land Bank Says It’s Nearly Broke; Stock Frozen
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WASHINGTON — The Federal Land Bank based in Jackson, Miss., one of the Farm Credit System’s troubled lending institutions, announced that it is nearing a state of zero net worth and has frozen borrower stock.
The bank also must suspend normal lending, but Chairman J. A. McDaniel said in a letter to borrowers that it would explore interim credit possibilities “until financial assistance is provided by legislation.”
House and Senate negotiators met briefly this week to attempt to resolve sharply differing blueprints for a federal bailout of the $50-billion Farm Credit System approved by the two houses.
Senate Agriculture Committee Chairman Patrick J. Leahy (D-Vt.) said he still hoped to send a bailout bill to President Reagan’s desk this year, but there was uncertainty that the task could be accomplished in the dwindling time before Congress breaks for the holidays.
The Jackson institution is one of 12 federal land banks in the 70-year-old Farm Credit System, a $50-billion network of borrower-owned banks and associations that represent the nation’s largest agricultural lender.
The farm crisis of the early 1980s, combined with borrowing at high interest rates to get lending capital, has caused $4.8 billion in losses in the last two years.
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