A General Accounting Office report says that despite progress, the Federal Agricultural Mortgage Corp. still needs to pay greater attention to risk management, its mission, and corporate governance.The GAO noted that Farmer Mac's income has increased since 1999 and its capital exceeds required levels, but the government-sponsored enterprise has also developed a "more complex risk profile," the GAO said. Specifically, the GAO said that if rapid growth in Farmer Mac's off-balance-sheet "standby agreements" continues and Farmer Mac faced a stressful economic environment, it "could face substantial liquidity risk." The report says that since 1999, Farmer Mac has significantly reduced the ratio of investments not related to its mission of helping provide long-term financing to farmers and ranchers. The stock market reacted positively to the report, however, with Farmer Mac's share price rising $2.68 to close at $29.36 Oct. 17 after the GAO report was released.

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