S643JUN17

TheWeekInCongress.com

Week Ending June 17, 2005

S 643 to amend the Agricultural Credit Act of 1987 to reauthorize State mediation programs.

BRIEF

The bill would continue for another five years the program that, upon request, allows mediators from the State to intervene when a conflict arises between the US Department of Agriculture and agriculture producers.

Representative Frank D. Lucas (R-OK-3rd) and Representative Stephanie Herseth (D-SD-At Large) explained the bill. (Mr. Lucas sponsored an identical bill in the House.)

Rep/ Lucas-"What is the Certified State Mediation Program? When producers and the USDA are in disagreement regarding loans, wetlands remediation, conservation compliance, grazing, pesticides, and other issues deemed appropriate by the Secretary of Agriculture, any State with a program can allow a mediator to help solve the differences between the producers and USDA. Both sides must agree to the mediator chosen to help resolve the dispute.

"Mediators can only help reach an agreement that both sides agree to abide by. The mediators are not arbitrators whose decisions are legally enforceable. The mediators work to find consensus. If the two sides involved in the dispute cannot reach agreement, they still have all the legal options available to them. States that decide to participate in the program must go through a certification process and provide 30 percent of the program's operating costs.

"The program is authorized to spend up to $7.5 million per year but, in 2004, only $3,950,000 was needed to operate the program in over 30 States. The program provides a great deal of bang for the buck and has been highly successful and useful.

"The USDA's Farm Service Agency, FSA, works with States to ensure that their mediation programs are meeting all required standards, and it also helps those States that are interested in becoming certified to navigate and complete the approval process. One of the most important aspects of the program is that it provides strict confidentiality for those who decide to use the mediation program.

"I have a breakdown of the States that are currently certified mediation States and the amount of money they received in 2004, I am happy to make that information available to any interested Member.

"I urge my colleagues to vote ``yes'' on S . 643 to ensure that an extremely practical and cost-efficient program continues to be utilized.

"Madam Speaker, I reserve the balance of my time."

Rep. Herseth-"Madam Speaker, I also rise today in strong support of S . 643 , which is the companion legislation of H.R. 1930 introduced by my distinguished colleague on the Committee on Agriculture, the gentleman from Oklahoma (Mr. Lucas).

"This legislation would extend the authorization for the State Mediation Grant Program carried out by USDA's Farm Service Agency to provide Federal matching grants to State mediation programs.

"Currently 32 States, including my home State of South Dakota, are certified to receive matching funds under this program, and two more States are working on becoming certified. To receive Federal funding, a State program must meet certain criteria and have at least a 30 percent match in State funding.

"This program was created in 1987 as a result of the credit crisis facing agriculture in the mid-1980s. Since its inception, an original intent of dealing with credit and loan disputes, Congress has expanded its scope to cover a number of other issues stemming from farm program participation, everything from wetland determinations to commodity program eligibility and pesticide drift.

"Early on, leaders in South Dakota recognized the value that such a program could provide to the farmers, ranchers, and lenders in our State, and they created a program in 1988 to deal with agricultural credit disputes. It has been a resounding success. In the more than 16 years that the South Dakota Department of Agriculture has operated its mediation program, it has received more than 4,500 requests for mediation.

"In South Dakota, mediation is available for agricultural credit disputes involving any amount of money. However, a creditor must submit to mediation in any credit dispute involving more than $50,000.

"This popular program provides many benefits to both agricultural borrowers and lenders in many States across the country. We all know that lending disputes can become contentious, and this program enables participants to negotiate and create their own mutually agreeable solutions to such disputes.

"Also, the cost of mediation is much less than the formal appeals process at USDA, averaging less than $700 per year, as opposed to the thousands of dollars it can cost to go through the National Appeals Division. The length of time to reach conclusions is also much shorter, normally several days, in contrast to appeals cases that can stretch for months.

"Mediation works because it is a time-saving and affordable alternative to litigation and appeals. It also promotes communication between disputing parties rather than confrontation and animosity. And, in my communications with the South Dakota Department of Agriculture staff, mediation generally results in more successful and enduring resolution to most credit disputes.

"This program has worked for farmers and agricultural lenders in South Dakota and across the country for almost 20 years, and I am pleased to support S . 643 to extend the authorization of this program through 2010."

Sponsor: Senator Pat Roberts (R-KS)

Vote: Passed Senate by Unanimous Consent (April 23, 2005) Passed House 371 to 2 (June 13, 2005) Signed into law by President Bush (June 29, 2005)

Cost to the taxpayers: $7.5 million per year is authorized. According to Rep. Lucas' comments, a little more than half of that amount was spent last year.