We are pleased to be here today to discuss the Farmers Home Administration's (FmHA) farm loan programs and, as you requested, to offer our views on H.R. 4906--the proposed Agricultural Credit Improvement Act of 1992. The bill, among other things, proposes the establishment of a program to aid beginning farmers and the revision of certain FmHA loan-processing procedures. Our testimony is based primarily on our recently issued report,1 which examined FmHA's direct and guaranteed farm loan programs and the agency's management of farm inventory properties from the perspective of their vulnerability to fraud, waste, abuse, and mismanagement. In summary, we concluded in our report that the federal investment in farm loans is not adequately protected and that FmHA has not been effective in improving the financial condition of borrowers so that they can obtain commercial credit, as was originally intended. (KAR).