July 13, 2006

Mr. Galen Van Vleet

USDA/FSA, Loan Making Division

1400 Independence Avenue, SW.,

Stop 0522

Washington, DC 20250-0522

RE:  Guaranteed Loan Fees – Proposed Increases

Dear Mr. Van Vleet:

The Independent Bankers Association of Texas (IBAT) joins multiple other banking and agriculture trade groups in voicing our strong opposition to proposed increases the costs of guaranteed farm loan programs.  IBAT represents over 500 community banks in Texas, and as you can likely surmise, a number of these banks are located in predominately rural areas dependent upon the health of the agriculture and livestock sector.

Many farmers and ranchers are struggling to continue as a vital link in our nation’s food chain, and as you are aware, do so facing difficult circumstances – volatile commodity prices, weather, expanding competition from foreign providers, loss of lucrative export markets, exponentially higher fuel and fertilizer costs and others.  Those relying upon USDA farm loan programs to fund their operations will, in many cases, be significantly impacted by these proposed fee increases.

The family farm and ranch operations are, like many small businesses, struggling to compete in an ever-consolidating and regulated environment.  The USDA farm loan programs have played a very important role in providing an opportunity for many of these small operations to remain viable businesses.  Additionally, the leverage effect of this relatively small guarantee program has a significant impact on rural economies all across America.

We strongly urge you to reject any attempts to raise the fees on this important program. 

Thank you for considering our views on this important issue.