DES MOINES (AP) - Opposition to the proposed foreign ownership of Farm Credit Services of America is spreading among farmers in Iowa, the largest of four states served by the Omaha-based farm lending cooperative.

Rabobank, a Dutch banking giant, announced on July 30 it will pay $1.4 billion for the cooperative.

Neil Harl, an Iowa State University agricultural economist and lawyer, said the deal has touched off a flood of phone calls from farmers expressing their anger, frustration and opposition to the sale.

"I've rarely taken so many angry calls," he said. "They've vastly underrated the opposition," he added, referring to the directors of the cooperative.

The transaction would include $600 million that would go to the borrowers who own the Omaha cooperative and an additional $800 million "exit fee" that would be paid to the federal government if the deal goes through and the Omaha lender pulls out of the government's farm credit system.

More than 40 percent of Farm Credit Services' loans are to Iowa borrowers.

Merlyn Groot, a farmer from Manson and former director of Farm Credit Services, said he has had about a dozen phone calls from farmers who have loans with the Omaha lender. Groot said he hasn't been able to find out much about the proposed sale, even though he was member of the board of directors from 1990 through last December.

"There's been a gag order" imposed on the directors, Groot said. "I can't find out anything."

What he has been able to find out about the proposal on the Internet has not impressed Groot.

"I think it's a bad business decision," he said. "It abandons the mission of the farm credit system, which was chartered to serve agriculture on an ongoing basis. When you sell out to a foreign bank, then it no longer qualifies as a farm credit institution and can't fulfill that mission."

Paul Folkerts, a Davenport, Neb., farmer and chairman of the Farm Credit Services board, acknowledged that there is opposition to the sale.

"Most people are curious, but there is some opposition because of a lack of understanding," he said.

Folkerts predicted that after the proposed deal is fully explained to the 51,000 farmer-borrowers of the Omaha cooperative, they will approve the sale.

When stockholders vote on the sale, each stockholder will have one vote. Proceeds from the $600 million transaction will be divided based on the size of a borrower's loan. That means large borrowers will get more money from the sale than small borrowers.

If the sale is approved by stockholders and government regulators, Farm Credit Services will have to leave the national farm credit system.

A new lending institution would be chartered to cover its former territory of Iowa, Nebraska, South Dakota and Wyoming, said Nancy Pellett, the Atlantic woman who is the chief executive officer of the Farm Credit Administration, which has offices in McLean, Va.