from their American counterparts at last week's North American Agricultural Lenders Conference, except for an occasional telltale pronunciation like "oat" instead of "out." In fact, attendees from the American Bankers Association and Canadian Bankers Association's agriculture divisions found much common ground as they explored agricultural banking issues in general and in light of the North American Free Trade Agreement. The conference drew nearly 800 people to Des Moines' convention center, including 150 from Canada. "Both of our countries face many of the same finance and management issues relating to agriculture," said James M. Culberson Jr., chairman of First National Bank and Trust Co., Asheboro, N.C., and the ABA's current president. Bankers in both countries anticipate changes and cuts in government farm subsidies. And both are exploring new trends in technology and delivery systems. However, the predominantly rural community bankers who do much of America's farm lending are worlds apart from the enormous banks that are Canada's predominant farm lenders. Canada has six huge banks with offices throughout its 10 provinces and two territories, said William T. Brock, vice chairman of Toronto Dominion Bank. But like U.S. banks, Canadian farm lenders have seen increased loan competition from manufacturers and dealers such as John Deere, which don't face the same regulation and taxation as banks.

*** As bankers discussed how their governments' trade agreements have opened up new markets and opportunities for their customers, U.S. bankers also continued to anticipate the 1995 Farm Bill. Various versions are currently being debated in Congress. Decreased farm subsidies are expected in any case, which some farmers welcome in order to be freer of government hands, but which also will constitute a challenge for agriculture lenders. "Farm program payments were a safety net for lenders as well as farmers," said Wythe Willey, president of the Iowa Cattlemen's Association, at a session on the future of farming with less government involvement. In a different session, Ron Knutson, director of the Agricultural and Food Policy Center at Texas A&M University, said he prefers the Senate version of the bill, which maintains some tie-ins between production and subsidies. Another version would not base subsidies on current price or yield. "I think there's a role in government programs in stabilizing agriculture," Mr. Knutson said.

*** Farm banks also continued to gripe about competition from the Farm Credit System. The system's overall market share of farm loans had declined to about 24% in 1994 from 31% in 1980, and banks' has grown to 40% from about 20%, according to Mark Drabenstott, vice president and economist at the Federal Reserve Bank of Kansas City. Nonetheless, some bankers questioned the entity's existence. "I think there's adequate funding available in the banking system," said G. Roger Burgess, senior agricultural loan officer of $225 million-asset 1st National Bank of York, Neb. When the Farm Credit System contracted after problems and downsizing related to the 1980s farm crisis, "The banking system just soaked it up." And despite bankers' recurring desire for access to the entity's wholesale funding markets and a recent ABA-Independent Bankers Association of America proposal to help do so, Farm Credit remains uninterested. "We believe the proposal is unacceptable and we are opposed to it," said James D. Kirk, president of AgAmerica, the Spokane, Wash.-based Farm Credit Bank, during a session on cooperative lending. But he defended the agency's own proposal seeking expanded lending authorities, which has angered farm bankers.

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