The Agriculture Department announced an additional $130 million in assistance to financially distressed borrowers on Monday, boosting total farm loan relief for producers to approximately $1.1 billion since last fall. Agriculture Secretary Tom Vilsack said Congress wanted aid delivered quickly “and that is what we are delivering to help producers across the country stay on their land.”
More than 20,000 distressed borrowers are being aided, said the USDA. Some have gone through loan restructuring; others were more than 60 days late in payment.
Lawmakers earmarked $3.1 billion in the 2022 climate, health and tax law for “farm loan immediate relief for borrowers with at-risk agricultural operations.” The USDA released $800 million last October to borrowers who were delinquent on direct and guaranteed loans. On March 27, it said $123 million in additional automatic assistance would be released to borrowers facing financial risk.
In May, USDA’s Farm Service Agency will begin reviewing individual requests for assistance from borrowers who missed a recent installment payment or are unable to make their next scheduled payment on a loan directly from USDA. Also in May, FSA will alert borrowers to the opportunity to receive financial assistance if they took extraordinary steps to avoid delinquency on their loans, such as selling property, cashing out retirement accounts or taking out new loans.
Vilsack said the USDA “is hard at work to provide our most vulnerable producers the opportunity to generate long-term stability and success.”
The $3.1 billion for at-risk operators of all backgrounds replaced a $4 billion loan forgiveness program for farmers of color that was being challenged in court. Minority-group farmers filed suit last year to force the government to carry out the 2021 debt relief offer.
Along with the $3.1 billion in assistance for financially distressed producers, Congress set aside $2.2 billion for farmers, ranchers and forest landowners who experienced discrimination in USDA farm loan programs in the past, with the money to be administered by outside entities. Maximum aid was set at $500,000 per person.
When USDA began assistance to at-risk producers last October, it estimated $1.3 billion would be spent to reduce their debts on USDA farm loans. Vilsack said the remaining money would be devoted to oversight and new administration tools — “a new pathway and new tools” — so USDA loan officers could step in and help borrowers through a difficult patch, rather than demand crippling payments or propose foreclosure. “The star of the show is the farmer,” he said. “The government’s job is to serve.”
The USDA webpage about assistance to distressed borrowers is available here.
