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Branstad Takes Farm Credit System To Court

October 3, 1986

DES MOINES, Iowa (AP) _ Gov. Terry Branstad went to court Friday to block an Ida County farm foreclosure, saying it was the first step in halting ″criminal″ foreclosures by federal lenders throughout Iowa.

″I think it’s criminal for that system to foreclose on that farm and then turn around and sell it for 10 percent down at 10 percent interest,″ Branstad said at a Statehouse news conference announcing the court action.

″We expect that this will set a precedent to stop foreclosures against other farmers in Iowa. That has been our goal from the very beginning.″

Court papers filed Friday asked an Ida County District Court to block the Federal Land Bank of Omaha, Neb., an arm of the Farm Credit System, the nation’s largest farm lender, from foreclosing on the 320-acre farm owned by Henry Brueck near Battle Creek.

Brueck, appearing with Branstad at the news conference, said he owed the Land Bank $132,000, including interest.

Branstad has long been critical of the federal lender, saying Congress has approved legislation which requires the agency to practice forbearance, extending time for debt payments, when dealing with financially pressed farmers.

Halting foreclosures throughout the state would put pressure on the Farm Credit System to show more sympathy to farmers, he said.

Branstad rejected suggestions that the move was politically motivated, coming just one month before the November elections.

Ron Hanser, a Land Bank Spokesman in Omaha, said officials wanted to study the action before commenting. However, he said, Land Bank officials make ″assertive efforts to practice forebearance.″

″We are following the law,″ Hanser said. ″The governor’s action is puzzling.″

Hanser said Land Bank officials consider foreclosure a last resort, but said the law requires that farmers be able to show they have a shot at eventually working their way out of debt.

″With the current farm situation in Iowa, it’s difficult for them to show the ability to work out of debt,″ Hanser said.

″Branstad’s action now is like calling the doctor after the patient’s blood pressure has dropped to zero,″ said Joe O’Hern, campaign manager for Democratic contender Lowell Junkins. ″It deals with the symptom and not the disease. The disease is a lack of profit in farming. No court action will help farmers until they get a decent price for the food and fiber they produce.″

The move is the latest clash between Republican Branstad and GOP officials who formulate federal farm policies. As those policies have come under increasing criticism in Iowa, Branstad has moved to distance himself.