[Senate Hearing 111-800]
[From the U.S. Government Publishing Office]
S. Hrg. 111-800
NOMINATION OF JILL LONG THOMPSON
TO BE A MEMBER OF THE FARM CREDIT
ADMINISTRATION BOARD, FARM CREDIT ADMINISTRATION
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HEARING
before the
COMMITTEE ON AGRICULTURE,
NUTRITION, AND FORESTRY
UNITED STATES SENATE
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
NOVEMBER 18, 2009
__________
Printed for the use of the
Committee on Agriculture, Nutrition, and Forestry
Available via the World Wide Web: http://www.agriculture.senate.gov
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COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY
BLANCHE L. LINCOLN, Arkansas, Chairman
PATRICK J. LEAHY, Vermont SAXBY CHAMBLISS, Georgia
TOM HARKIN, Iowa RICHARD G. LUGAR, Indiana
KENT CONRAD, North Dakota THAD COCHRAN, Mississippi
MAX BAUCUS, Montana MITCH MCCONNELL, Kentucky
DEBBIE STABENOW, Michigan PAT ROBERTS, Kansas
E. BENJAMIN NELSON, Nebraska MIKE JOHANNS, Nebraska
SHERROD BROWN, Ohio CHARLES GRASSLEY, Iowa
ROBERT CASEY, Jr., Pennsylvania JOHN THUNE, South Dakota
AMY KLOBUCHAR, Minnesota JOHN CORNYN, Texas
MICHAEL BENNET, Colorado
KIRSTEN GILLIBRAND, New York
Robert Holifield, Majority Staff Director
Jessica L. Williams, Chief Clerk
Martha Scott Poindexter, Minority Staff Director
Anne C. Hazlett, Minority Chief Counsel
(ii)
C O N T E N T S
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Page
Hearing(s):
Nomination of Jill Long Thompson to be a Member of the Farm
Credit Administration Board, Farm Credit Administration........ 1
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Wednesday, November 18, 2009
STATEMENTS PRESENTED BY SENATORS
Lincoln, Hon. Blanche L., U.S. Senator from the State of
Arkansas, Chairman, Committe on Agriculture, Nutrition, and
Forestry....................................................... 1
Chambliss, Hon. Saxby, U.S. Senator from the State of Georgia.... 2
Luger, Hon. Richard G., U.S. Senator from the State of Indiana... 2
Witness
Thompson, Jill Long, Nominee, to be a Member of the Farm Credit
Administration Board, Farm Credit Administration............... 3
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APPENDIX
Prepared Statements:
Chambliss, Hon. Saxby........................................ 10
Thompson, Jill Long.......................................... 12
Document(s) Submitted for the Record:
Committee questionnaire and Office of Government Ethics
Executive Branch Personnel Public Financial Disclosure
Report filed by Jill Long Thompson......................... 16
Addendum to U.S. Senate Committee on Agriculture, Nutrition,
and Forestry Questionnaire for Farm Credit Administration
Nominees................................................... 37
Public 5-day letter to Hon. Blanche L. Lincoln, Chairman,
Committee on Agriculture, Nutrition, and Forestry.......... 39
NOMINATION OF JILL LONG THOMPSON
TO BE A MEMBER OF THE FARM CREDIT
ADMINISTRATION BOARD FARM CREDIT ADMINISTRATION
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Wednesday, November 18, 2009
United States Senate,
Committee on Agriculture, Nutrition, and Forestry,
Washington, DC
The committee met, pursuant to notice, at 12:26 p.m., in
Room 106 Dirksen Senate Office Building, Hon. Blanche Lincoln,
Chairman of the committee, presiding.
Present or submitting a statement: Senators Lincoln,
Chambliss, and Lugar.
STATEMENT OF HON. BLANCLHE L. LINCOLN, U.S. SENATOR FROM THE
STATE OF ARKANSAS, CHAIRMAN, COMMITTEE ON AGRICULTURE,
NUTRITION, AND FORESTRY
Chairman Lincoln. We are going to move the committee to the
consideration of Congresswoman Jill Long Thompson to be a
member of the Farm Credit Administration Board.
Congresswoman, thank you so much for joining us today and
welcome to the Agriculture Committee. It is great to see you
again. Thanks for your willingness to continue your long and
distinguished career of public service, and I would especially
like to commend the commitment you have demonstrated to
America's farmers and ranchers.
One of the Senate's key constitutional obligations is to
advise and give consent on nominations, and we do take this job
very seriously, not only because our system of checks and
balances is so important, but because the sooner we confirm
qualified nominees, the sooner they can go to work.
Congresswoman Long Thompson has demonstrated a true passion
for our agriculture sector. She was raised on a family farm.
She and her husband, Don Thompson, currently share a family
farm near Argos in Indiana. Congresswoman Long Thompson has
also selflessly served the public, first as a member of the
Common Council at Valparaiso, Indiana, then as a member of the
United States House of Representatives, where she served on the
House Agriculture Committee, where I remember her from my days
on the House Agriculture Committee. Finally, she served as the
Under Secretary for Rural Development at the U.S. Department of
Agriculture.
The Congresswoman's experience in agriculture and in public
service will be invaluable in her position as a member of the
Board of the Farm Credit Administration. The Farm Credit
Administration's role in regulating and evaluating the banks,
associations, and related entities of the Farm Credit System is
crucial to the continued viability and growth in agriculture in
rural America.
The Farm Credit System provides loans to producers, farm-
owned cooperatives, processors, rural utilities, and so many
other entities, and it is imperative that the Farm Credit
Administration continue to ensure that agricultural interests
are provided with a safe and dependable source of credit. I am
pleased that Senator Chambliss mentioned that earlier in our
hearing and I was glad to echo that. As a member of the Board
of Directors of the Farm Credit Administration, I know the
Congresswoman will undertake her responsibilities bearing in
mind the key role of FCA and what it plays in providing credit
to agricultural interests.
So we look forward to hearing from you, to your statement
and answers to any questions that we may have.
I would like to now yield to my Ranking Member, Senator
Chambliss.
STATEMENT OF HON. SAXBY CHAMBLISS, U.S. SENATOR FROM THE STATE
OF GEORGIA
Senator Chambliss. Thank you, Madam Chairman, and welcome,
Ms. Thompson. I will submit my statement to the record, but
suffice it to say that Ms. Thompson has been a member of the
Hill for many, many years and her record speaks for itself. We
look forward to moving this process along and I look forward to
hearing from you today. Thank you.
[The prepared statement of Senator Chambliss can be found
on page 10 in the appendix.]
Chairman Lincoln. Thank you.
Senator Lugar.
STATEMENT OF HON. RICHARD G. LUGAR, U.S. SENATOR FROM THE STATE
OF INDIANA
Senator Lugar. Madam Chairman, thank you for holding this
very important hearing for the Farm Credit Administration Board
confirmation. It is a real privilege to welcome back Jill Long
Thompson to this committee.
In 1995, I had the distinct privilege of serving as
Chairman of this committee when we considered Jill Long
Thompson for Under Secretary of Agriculture for Rural,
Economic, and Community Development. In addition to serving as
the Under Secretary, Jill served also in the House of
Representatives, where she represented Indiana's Fourth
District from 1989 to 1995. She served ably on the House
Agriculture Committee and was elected by her peers to lead the
Congressional Rural Caucus at that time.
These experiences buttress Jill Long Thompson's long
connection to agriculture, formed in her earliest years. She
was raised on a grain and dairy farm in Whitley County,
Indiana, and was an active 4-H member in her youth. Notably,
she still serves and lives on a farm in Indiana, actually
manages her family's operations.
In addition to these many accomplishments, Jill has served
as the CEO of the National Center for Food and Agricultural
Policy and recently as an adjunct professor at her alma mater,
Valparaiso University. She also obtained an MBA and a Ph.D. at
Indiana University and served on the faculty or as an adjunct
professor in many of Indiana's excellent colleges and
universities.
I look forward to hearing her testimony today and I commend
the President on nominating her to this important Board.
Chairman Lincoln. Thank you, Senator Lugar.
Congresswoman, would you please rise and raise your right
hand.
Do you swear that the testimony you are about to present is
the truth, the whole truth, and nothing but the truth?
Ms. Thompson. Yes.
Chairman Lincoln. Secondly, do you agree that, if
confirmed, you will appear before any duly constituted
committee of Congress, if asked?
Ms. Thompson. Yes.
Chairman Lincoln. Great. Thank you so much. Please proceed
with your testimony.
TESTIMONY OF JILL LONG THOMPSON, OF INDIANA, NOMINEE TO BE A
MEMBER OF THE FARM CREDIT ADMINISTRATION BOARD, FARM CREDIT
ADMINISTRATION
Ms. Thompson. Chairwoman Lincoln, Ranking Member Chambliss,
and members of the committee, it is truly a privilege to appear
before you today as President Obama's nominee to become a
member of the Board of the Farm Credit Administration.
I am particularly pleased to appear before my former House
colleague, friend, and the first female Chair of the Senate
Agriculture Committee. Congratulations, Madam Chair. I think
that has a good ring to it, and if confirmed, I look forward to
renewing our association and working with you to the benefit of
American agriculture.
Ranking Member Chambliss, it has always been a privilege to
work with you. I didn't get to serve with you in the House, but
when I served as Under Secretary, I worked with you and your
staff a great deal on issues very important to the State of
Georgia and very much appreciate your commitment to
agriculture.
And Senator Lugar, you know you are one of my two favorite
Senators and I thank you so much for your kind and generous
introduction. You make us proud in Indiana every day. You serve
not just Hoosiers with distinction, you serve this country with
distinction. Thank you. It is such an honor that you introduced
me here today. Thank you very much.
I also especially thank my husband, who is sitting in the
back row here today, and thank him for being here with me and
for his support and commitment to the many things that are
important to me and particularly American agriculture.
It is an honor to be selected by President Obama to serve
on the Board of the Farm Credit Administration. My appreciation
for the agriculture industry has been life encompassing. From
my childhood days on our family farm to those I now share with
my husband on our farm near Argos, Indiana, I have a firsthand
understanding and respect for the millions of individuals who
work in and for the betterment of American agriculture.
I hold this nomination close to my heart as a tribute to my
commitment and public service to America and to the prosperity
of agriculture in the United States. I have had
the great privilege to serve on the U.S. House Committee on
Agriculture as a representative of the Fourth District of
Indiana and as President Clinton's Under Secretary for Rural
Development in the United States Department of Agriculture.
Most recently, I served as the CEO and Senior Fellow at the
National Center for Food and Agricultural Policy. And I want to
assure you that I will use these experiences and the knowledge
that I have gained and apply them as a Board member of the Farm
Credit Administration, if I am confirmed to serve.
The Farm Credit Administration's role as the Farm Credit
System's safety and soundness regulator is very important for
agriculture and rural America. The presence of the Farm Credit
System in agricultural lending provides farmers, ranchers, and
their cooperatives a source of dependable and competitive
financing. As owners and operators of our own family farming
operation, my husband and I know the importance credit
availability plays in production agriculture. And so it is the
Farm Credit Administration's duty to ensure the system remains
safe and sound so that it can serve the generations of farmers
and ranchers to come.
Every American is keenly aware of the importance of prudent
and effective regulation of financial markets. Last year's
near-collapse of Wall Street sent shock waves throughout the
world, and we are still recovering from the effects. While
there were many reasons for the crisis, it could have been at
least partly mitigated by more effective financial regulatory
oversight.
If confirmed to serve on the FCA Board, I assure this
committee that I will take my responsibility seriously to be an
effective arms-length regulator of the Farm Credit System and
Farmer Mac.
Madam Chair, Ranking Member Chambliss, and members of the
committee, this concludes my statement and I welcome your
questions.
[The prepared statement of Ms. Thompson can be found on
page 12 in the appendix.]
Chairman Lincoln. Thank you, Congresswoman. We are
delighted you are here and look forward to working with you.
Just one brief question, and I know certainly with what we
have seen in Arkansas and surrounding States with the
devastation of floods in the spring and floods in the fall, and
as you and I both know, growing up in farm families, there are
all kinds of unbelievable vulnerabilities that are beyond the
control of our American farm families.
But the Farm Credit System lends to a single industry,
agriculture, and it is therefore very vulnerable to the
economic volatility and risk in that industry, and since there
is an awful lot there that they have little control over. And
while certainly the Farm Credit System remains generally safe
and sound, recent adversity in several major commodity groups
has caused deterioration in a number of the Farm Credit
institutions.
How would you just ensure that the system will be able to
withstand such vulnerabilities in the long term and remain safe
and sound?
Ms. Thompson. Well, I think the legislation that was passed
in 1987, the major reforms of the Farm Credit System, have
played a key role in keeping the system sound over the last 20-
some years. Having said that, agriculture, production
agriculture, and marketing and value-added, those are
industries that are changing all the time and it becomes very
important for any laws and regulations to be updated. And
certainly it is the Congress that determines the direction, but
it is the role of the Farm Credit Administration to make sure
that you are aware of any challenges or forthcoming challenges
when they first begin. If I am privileged to serve on this
Board, it will be my commitment to ensure that you here at the
committee have the information you need.
In addition to that, the Farm Credit Administration
conducts regular audits, about every 18 months, I believe it
is, of the banks and associations. In addition to that, there
are quarterly reports that are compiled. And from those, you
can determine if there are some issues that need to be
addressed, and certainly we will do what we have--if I am
serving, I will do what I have in my power to make sure that
those issues get addressed, but also make sure that you are
among the first to have the information.
Chairman Lincoln. Thank you.
Senator Chambliss.
Senator Chambliss. Thank you.
Ms. Thompson, agriculture, though challenged by turmoil as
every other industry has been by the U.S. economy over the last
year or so, has weathered pretty well, considering. With your
experience in agriculture, accounting, and finance, you have
seen the ups and downs from a financial standpoint in the area
of agriculture. How would you compare this past year's troubles
to what agriculture faced in the past, especially during the
1980s credit crisis, and what challenges and opportunities do
you see ahead for agriculture?
Ms. Thompson. You could about write a dissertation on that,
I think. But I do think that there were some very wise
decisions made by Congress in the late 1980s as things had
begun to unfold in agriculture and there was such a downturn in
commodity prices and there were droughts and floods and
different issues. And so I think that so many of the problems
in farm lending, certainly in the Farm Credit System, were
addressed at that time, and I think that that has helped to
ensure that the lending on the part of the Farm Credit System
has truly been to creditworthy borrowers.
And I also think the changes in policy and regulations have
helped not just the industry at large, but it has helped
individual farmers to make better decisions regarding financing
of their operations. And I think that because of that, we
haven't seen the widespread kinds of issues that we dealt with
in the 1980s. I think it is very important to continue to
update policy to address problems of the future.
Senator Chambliss. Thank you. Thank you, Madam Chairman.
Chairman Lincoln. Senator Lugar.
Senator Lugar. Congresswoman Long Thompson, this past year,
farmers have faced, because of the huge increases in the price
of fertilizer and seed, a special need for credit. Likewise,
however, their confidence was undermined by the volatile price
of corn and soybeans, to take two examples, of soybeans going
to $15 and back to $8, or corn to $7 and back to $3.50 or so
forth. So as a result, in the agriculture sector, at least in
the Midwest, with which your farm and my farm are familiar,
this has been an extraordinary period.
Now, complaints have come that given the problems of local
banks as they strive for liquidity and safety, that credit has
not been forthcoming in the manner to which--and even if it
was, many farmers said, we are beginning this year with fear
that we may not have a profit, that the expenses up front of
the seed and fertilizer may exceed whatever we are going to get
at the end of the trail, if we are on the downside of the
commodity markets.
As you have studied the role that you will play in this, to
what extent does the Board try to surmise what the lay of the
land is out there, quite apart from the responsibility of the
various institutions, whether they are managed well and whether
they are fiscally sound? To what extent do you look at markets,
do you look at problems of regular farmers who are facing the
markets and the credit problems?
Ms. Thompson. Well, if I am privileged to serve on the
Board of Farm Credit Administration, it will be a significant
part of my job to read what is coming out of the Land Grant
Universities, Purdue University and others, so that we can
always be as effective as we can to stay ahead of the curve of
those downturns in agriculture, or the volatility in
agriculture. And I think that having that information is
probably the best way that you can effectively regulate the
banks and the associations that are making the loans and to
ensure that the loans, in fact, are creditworthy. And that is
how I will approach this position, if I am privileged to serve.
Senator Lugar. Well, that is the view of the future. Now,
in taking a look at the past, what is the situation currently
in terms of defaults by agriculture, either individual farmers
or are there groups of farmers or what have you? How many
people are in arrears and what is--we have been hearing about
the disaster with the earlier panel today, but how does this
stack up in agricultural America?
Ms. Thompson. Well, I don't have the information on lending
in general, but Farm Credit is a major lender, somewhere,
depending upon whether it is for real estate or for operation,
anywhere from about 31 percent, I think, to 39 percent of
agriculture lending, depending upon specifically the facet that
you are looking at.
Senator Lugar. Comes out of your agency, the Farm Credit
Administration?
Ms. Thompson. Yes. Yes. And, in fact, the report for the
first three quarters of 2009, while there are some concerns,
the loans are, in general, very sound and the system is
performing very well.
Senator Lugar. Well, that is very salutary information. At
least as you approach this responsibility, the system appears
to be working well, and the question now is to have the
foresight to make certain that continues.
I wish you every success.
Ms. Thompson. Thank you. Thank you.
Senator Lugar. Thank you, Madam Chairman.
Chairman Lincoln. Thank you, Congresswoman. We all
appreciate you being here today and certainly do wish you the
best success.
We would also like to leave the record open if other
members of the committee might wish to make statements or ask
questions or anything else, so we will leave it open for five
days and that way if there are any other questions, we will
make sure that we make those available to you, obviously, for
you to answer.
Ms. Thompson. Thank you.
Chairman Lincoln. But we thank you so much for taking time
to be here, and again look forward to working with you. It is
great to see you again.
Ms. Thompson. It is great to see you. It is great to see
all of you. Thank you.
Chairman Lincoln. Thank you very much.
The committee is adjourned.
[Whereupon, at 12:43 p.m., the committee was adjourned.]
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A P P E N D I X
November 18, 2009
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