FARMERS HOME ADMINISTRATION (FMHA)

In 1946 Congress replaced the Farm Security Administration (FSA) with the Farmers Home Administration (FmHA). Congress's action grew out of its wartime investigations of the FSA, in which the agency was criticized for deliberately disregarding congressional intent and misusing funds to establish and maintain resettlement projects, cooperative farms, and land purchase associations. Congressional disillusionment with these unconventional programs reflected legislators' broader retreat from New Deal reforms and their more traditional approach to domestic issues during and after the war. In creating the FmHA, Congress authorized it to insure loans, as well to lend money directly. Although some FSA programs, including loans to low-income individuals who lacked other sources of credit for farm purchase, farm operating and rehabilitation loans to individuals, and loans for rural water systems, were continued by the new agency, the FSA's more controversial rural rehabilitation and resettlement projects, migratory labor camps, and loans to cooperative associations for land purchase were discontinued. The FmHA also continued the emergency crop and feed loan program formerly administered by the Farm Credit Association.

In the ensuing decades the scope of the FmHA's programs expanded. The Federal Housing Act of 1949 broadened the agency's role in issuing and guaranteeing loans to farmers for housing. In 1961 Congress authorized the agency to finance housing for nonfarm rural residents and general water projects for rural municipalities. Soon thereafter the FmHA extended credit for construction of low-cost rural apartments and certain types of rural recreational facilities. Increasingly during the 1960s the agency shifted away from direct loans for housing and toward insuring loans from private sources. During the 1970s, concerns about revitalizing rural regions led to additional changes. In 1972, the agency began loaning funds for health facilities and public buildings such as fire stations and community centers in rural areas. Two years later the agency became involved in guaranteeing private loans to businesses in an effort to encourage business and industrial development in the countryside. By 1983 the agency had invested $52.9 billion in programs for farmers, such as farm operating, ownership, and emergency loans; $42.1 billion for rural housing; $13.3 billion for development of community facilities, most notably water and sewage systems; and nearly $5.5 billion in guaranteed loans to rural businesses. In 1994, in an attempt to streamline rural services, the Rural Development Mission Area within the Department of Agriculture was created to replace agencies including the FmHA.

See Also: FARM POLICY; FARM SECURITY ADMINISTRATION (FSA); HOUSING.

BIBLIOGRAPHY

Baldwin, Sidney. Poverty and Politics: The Rise and Decline of the Farm Security Administration. 1968.

Benedict, Murray R. Farm Policies in the United States, 1790–1950: A Study of the Origins and Development. 1953.

United States Department of Agriculture. A Brief History of the Farmers Home Administration. 1984.

Brian Q. Cannon