Gathering Storm

hile he waits for about 100 farmers to file into the Abilene, Texas, civic center one bright October morning, Parks Shackelford, the assistant deputy administrator for farm programs at the Agriculture Department's Farm Service Agency is, he admits, "itchy."

Shackelford knows that many of the people in the room are angry. He manages the Conservation Reserve Program (CRP), which Congress established in 1985 to pay farmers for a period of 10 years to idle their land to reduce a glut of grain and cotton and improve the environment. In 1996, Congress rewrote the program, making environmental protection and creation of wildlife habitat the top priorities for CRP land, and since then Shackelford's office has rejected bids from many of the west Texas land owners to continue participating in the program.

But after Shackelford explains the new rules and urges the farmers to "do the maximum you can" to enhance bids by offering to plant native grasses that government scientists say will be better for wildlife, the farmers are surprisingly polite, asking mostly technical questions.

Perhaps the farmers are impressed that their congressman, Rep. Charles Stenholm, D-Texas, has delivered this high-ranking federal official to meet with them. But it's more likely they get the feeling they have little to fear from Shackelford. He is, they may sense, the kind of man whose Washington office is decorated with the heads of deer and moose he has shot, along with a photo of John Wayne-not exactly the kind of items that would be found in the typical office at, say, the Environmental Protection Agency.

Shackelford, after all, represents, FSA, which farmers trust because it is a direct descendant of the federal agencies that saved their ancestors from the Great Depression and have distributed federal farm subsidies ever since. That faith is undergirded by a network of county offices managed by committees elected by farmers in the counties. The farmer-elected committees hire the county executive directors, who, in turn, hire the local staffs who calculate and distribute federal farm benefits.

This system has created one of the most unusual employment situations in the federal government. FSA has only 5,900 direct employees, but through its county committees pays the salaries of 10,000 county employees around the country.

Now the entire FSA structure from Washington down to the county committee system is under fire as never before. Under budget pressure from both Congress and the Office of Management and Budget, USDA has reduced the number of county offices from 3,700 to 2,500 and wants to close or consolidate even more. Civil rights advocates have charged that all-white, often all-male, county committees have discriminated against minority and women farmers. Management experts have argued that the county committee system is rife with conflicts of interest and abuse.

Agriculture Secretary Dan Glickman has proposed federalizing the nearly 10,000 county employees, giving them full federal employment status and federal years of credit for their years of county employment. But Glickman's proposal has run into criticism from all sides. Representatives of minority farmers and USDA employees say it would give federal status to employees who were hired under racist regimes. The Federal Managers Association opposes making federal employees of workers who have not had to go through Uncle Sam's rigorous job application process.

On Oct. 23, Kenneth Hood, a Mississippi farmer who heads the National Association of Farmer-Elected Committees, told the House Agriculture Committee that the system of farmer-elected county committees and their staffs exercising "grass roots control over program delivery at the local level" is a shining symbol of the kind of government that Vice President Al Gore has promoted as part of his National Performance Review.

Caught in the middle, the National Association of FSA Committee Employees (NASCOE), which represents the county employ ees, has taken no position on the proposal. But NASCOE president Dan Sundseth, a county office director from Targent, Ore., says that most members believe that federalization will reduce the efficiency with which the local offices serve the farmers.

Stenholm, meanwhile, notes that the future of the county committees and their employees is part of a larger battle over FSA's future. Stenholm says a majority of members of Congress want to end farm programs and close down FSA when the current farm bill expires in 2002. If FSA and its system of local committees are going to survive and be vital institutions in the 21st century, Stenholm says, the agency and the state and county committee members must develop "a defensible farm policy," cooperate more with local conservation officials and even consider forming partnerships to play a role in the delivery of the food stamp program the Agriculture Department administers.

FSA offices could become the federal government's "service center for rural America," says David Senter, the Washington lobbyist for the National Association of Farmer Elected Committees.

The problems of FSA and the county committee system can be traced back to the way President Franklin Roosevelt's administration set up farm programs in the 1930s and the Clinton administration's attempts, beginning in 1994, to reorganize the Agriculture Department.

When FDR became President in 1933, about one-third of Americans lived on farms, agricultural prices were low, the soil had been depleted by poor farming practices, and most farms did not have electricity. FDR's New Deal included a series of farm programs that attempted to control farm production to avoid surpluses and to stabilize farmers' incomes through various payments.

These programs required extensive records on every farmer in the nation and calculations to determine benefits. To administer the programs, Congress set up a system of farmer-elected county committees. The name of the USDA division that ran the programs was known as the Agricultural Stabilization and Conservation Service (ASCS).

Roosevelt's legislation also created state-level ASCS committees and an executive director in each state. The executive director is appointed by the President and the Secretary of Agriculture, but by tradition is selected by the senior member of the state's congressional delegation who is a member of the same party as the President. Advocates for a professional civil service, including many USDA employees, say this system makes it difficult for FSA to manage the county offices, because the state executive directors owe their loyalty to members of Congress.

In addition to ASCS, the New Deal reforms created three more farm agencies: the Farmers Home Administration (FmHA), which made loans to farmers with troubled credit ratings, for land purchases, operating expenses and construction of houses on their farms; the Soil Conservation Service (SCS), which helped farmers improve and maintain the productivity of their land; and the Federal Crop Insurance Corp. (FCIC), which managed federally subsidized crop insurance programs.

The New Deal farm program allowed farmers to take out loans on their grains and cotton and, if the prices remained low, forfeit them to the government. ASCS was

given authority to manage the commodities the government received through forfeiture, buy other commodities in order to raise prices, and inspect the warehouses that held them. After the establishment of the school lunch program in 1946 and overseas food aid programs in 1954, ASCS also began handling the government's purchasing of commodities for those programs.

By the time Mike Espy, President Clinton's first Agriculture secretary, began advocating reorganization of the Agriculture Department five years ago, farmers had long complained that they had to make separate stops at ASCS, FmHA, SCS and private crop insurance agencies. In an attempt to set up "one stop shopping" for farmers, a 1994 law merged the operations of ASCS and FCIC into the new Farm Service Agency and split Farmers Home into two divisions, with the farm loan division going to FSA and the home and business loan division going to another new organization, the Rural Development Agency. FSA retained ASCS' commodity purchasing and warehouse inspection responsibilities.

From the beginning, though, FSA's road was rocky. Because Congress had become worried about the cost of disaster relief for farmers, the 1994 act also required all landowners and producers to take out federal crop insurance. This ended up requiring even widowed landowners in nursing homes to sign up for the program. In 1996, under pressure from both landowners unhappy that they had to sign up for the insurance and crop insurers who believed they were losing business, Congress made crop insurance voluntary, took the program away from FSA and created the Risk Management Agency to manage it. The decision was a blow to the concept of "one stop shopping," since farmers were forced to go to private insurance agencies to get policies.

FSA's greatest difficulty, however, has been the attempt to merge FmHA's farm loan division with ASCS' various farm programs. Carolyn Cooksie, the deputy administrator in charge of farm loan programs, acknowledges that putting two agencies together "has not been the marriage made in heaven that people thought it would be."

Both Congress and Clinton administration officials reasoned that ASCS and FmHA could be joined because both served farmers. In reality, Cooksie says, the functions and cultures of the two agencies were very different. ASCS distributed subsidies and disaster payments that, in most cases, did not need to be repaid, while FmHA has always demanded repayment of its loans.

Federalization Fight

The greatest conflict in the merger, however, has been that FmHA employees, who have always been direct employees of the federal government, have now been placed in county offices-at a time when offices are downsizing or closing.

Some former FmHA employees, says Cooksie, are so afraid their jobs will be eliminated that they have resisted training former ASCS employees to analyze loan applications. Many county executive directors believe that loan officers should answer to them, even when the county directors have never worked with loan programs. Cooksie notes that it's against the law for a federal employee to be supervised by a county employee and says Glickman has issued a regulation that county employees are not supposed to make judgments on whether farm loans are approved.

The General Accounting Office has also noted that the merger has placed county employees in a position of making decisions on loans for themselves and their relatives. In the past, Agriculture Department rules allowed farm subsidy recipients to work in USDA offices, but did not allow FmHA employees to be eligible for loans.

For now, Cooksie says, FSA offices are a "hodgepodge": Some have fully integrated former ASCS and FmHA operations and others are still separate. Cooksie said that relations between the two divisions have been hurt by the view of many former ASCS employees that FmHA simply became a part of their agency rather than merging with them to create a new entity.

Even at USDA headquarters in Washington, many office signs still read "ASCS" rather than "FSA," Cooksie notes. Cooksie says many county employees do not respect Farmers Home programs but want to become loan officers in the hopes it will help them keep their jobs.

Former FmHA employees, through the National Association of Credit Specialists, are opposing the federalization of county employees and making farm credit specialists subject to supervision by county directors. "County employees want career status because the programs they administer are scaled back and USDA is downsizing," Millie Turner, a 14-year USDA employee and president of the National Association of Credit Specialists, told the House Agriculture Committee recently. "Crediting their county time would allow them to 'bump' existing federal employees out of their positions in inevitable reductions-in-force."

The opposition of the credit specialists to the county employees' federalization has offended county employees, says Sundseth. County employees are also angered by Glickman's decision to hire 300 new credit specialists rather than train county employees to do the work. Despite the supposed integration of the FSA offices, the credit specialists are being told that they will not have to perform non-credit functions.

Federalizing the county employees would require congressional action. Rep. Eva Clayton, D-N.C., has introduced a bill to do so. The bill also would provide more money for farm credit programs and seek to improve civil rights in the Agriculture Department. (See "The Last Plantation.")

Stenholm has endorsed Clayton's bill, but he also advocates allowing county committees to exercise authority over federal employees. House Agriculture Committee Chairman Bob Smith, R-Ore., has introduced a bill that would merge NRCS with FSA and create a position of county credit director in each FSA office. Smith's plan would require the county credit director to consult with the county committee, but not make that person answerable to the county committee.

Clayton's bill also would give the Agriculture Secretary authority to appoint minority members of county committees in areas where there are substantial numbers of minority farmers and no minorities are elected. Glickman has asked Congress for that authority. Smith's bill provides for the appointment of two nonvoting members.

With so many varying options floating around, Congress may prefer to maintain the status quo. Senate Agriculture Committee Chairman Richard Lugar, R-Ind., has repeatedly said that he has little interest in USDA reorganization so soon after passage of the 1994 law. But Sundseth says that the two-tier personnel system, with credit specialists in the same office with county employees, but not answerable to the county director or county committee, is making management of the offices difficult.

Keith Kelly, a former Montana and Arizona state agriculture commissioner hired by Glickman to be FSA administrator last summer, says creating one management system-whether federal or county-is vital, but he prefers federalization because it will allow him to promote skilled county employees to Washington without subjecting them to USDA's three-year probation period.

But Sundseth says the national nature of federal employment is one reason farmers believe local control over FSA personnel is still important. Oregon farmers don't want people in "Birkenstock sandals and silk shirts" running their county offices, Sundseth notes, and said they also fear that, if the county employee system is federalized, ambitious federal workers will come to a county for a few years and then move on.

Sundseth says federalization advocates would have a hard time arguing that the federal system is more efficient. Last year, county employees got compliments from Congress and federal officials for implementing the new farm program within six weeks after Congress passed it. A Clinton administration appointee concedes that studies have shown that the county committees can hire employees faster and more cheaply than the federal government. Sundseth also points out that there are more civil rights complaints against FmHA, which was always federal, than against decisions by county employees.

FSA's Future

Glickman, Kelly, Stenholm and other Clinton administration officials are also focusing on FSA issues beyond the county committee system. The 1996 farm bill simplified farm programs by providing a series of guaranteed-but declining-payments to grain and cotton farmers over seven years regardless of what they plant.

The new farm program was designed to dramatically reduce the paperwork in FSA offices, but GAO has reported that the workload has not decreased as much as expected. The 1996 bill requires, for example, that if a landowner changes tenants, that information must be reported to the FSA office so that the payment can be split properly between landowner and tenant. The 1996 bill also kept tobacco and peanut allotment programs, and farmers must still sign up for those programs. In addition, farmers must go to their county offices to apply for conservation programs.

In the 1996 farm bill, Congress said it expects farming to become more market-oriented, but Congress did not repeal the 1938 and 1949 farm acts, which form the basis of the farm program. Like other farm bills since the 1950s, the 1996 bill only suspended those acts. That means Congress must engage in another debate over farm programs in 2002.

This year, when floods struck the Upper Midwest, Congress passed a program to pay ranchers for lost animals and called upon county FSA offices to analyze ranchers' records to prove they had lost animals and to distribute money. If those offices were closed, USDA would not have the local presence to carry out such programs.

The National Association of Farmer Elected Committeemen has also suggested that FSA offices could issue electronic food stamp benefit cards, conduct the agricultural census, help the Federal Emergency Management Agency process applications and keep records for the Risk Management Agency.

The chaos surrounding reorganization has caused tremendous morale problems at FSA and within the county committee system, but Clinton administration officials say they hope that they can inspire FSA employees-whether they are county or federal-to maintain the agency's mission to help rural Americans and people around the world in need of food.

If there are pressures to close down the agency in 2002, says Vicki Hicks, FSA's deputy administrator for commodity operations, "I want the employees to fight for the continued service to the farmer, the school child, the elderly and the malnourished overseas."