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USDA Provides Payments of Nearly $800 Million in Assistance to Help Keep Farmers Farming
Immediate Help for Over 13,000 Distressed USDA Farm Loan Borrowers; Begins Process to Provide Up to $500 Million More for Up to 23,000 Additional Borrowers
WASHINGTON, October 18, 2022 - The U.S. Department of Agriculture (USDA) today announced that distressed customers with qualifying USDA farm loans have currently gotten nearly $800 million in assistance, as part of the $3.1 billion in support for distressed farm loan customers provided through Section 22006 of the Inflation Reduction Act (IRA). The IRA directed USDA to speed up support to distressed debtors of direct or guaranteed loans administered by USDA's Farm Service Agency (FSA) whose operations face monetary risk.
Today's statement kicks off a process to supply help to distressed farm loan debtors using a number of complementary methods, with the goal of keeping them farming, getting rid of challenges that presently avoid a number of these customers from going back to farming, and improving the manner in which USDA approaches borrowing and servicing. Through this support, USDA is focused on generating long-term stability and success for distressed debtors.
"Through no fault of their own, our nation's farmers and ranchers have dealt with exceptionally tough circumstances over the last couple of years," stated Agriculture Secretary Tom Vilsack. "The funding consisted of in today's announcement assists keep our farmers farming and provides a new beginning for manufacturers in tough positions."
Work has already started to bring some relief to distressed farmers. As of today, over 13,000 debtors have actually already taken advantage of the resources supplied under the Inflation Reduction Act as follows:
- Approximately 11,000 overdue direct and ensured customers had their accounts brought current. USDA likewise paid the next scheduled yearly installation for these direct loan debtors giving them assurance in the near term.
- Approximately 2,100 borrowers who had their farms foreclosed on and still had remaining financial obligation have had this financial obligation resolved in order to cease debt collections and garnishment eliminating that burden that has made getting a fresh start more challenging.
In addition to the automated support currently provided, USDA has likewise outlined actions to administer up to an additional $500 million in payments to benefit the following distressed debtors:
- USDA will administer $66 million in separate automatic payments, using COVID-19 pandemic relief funds, to support approximately 7,000 direct loan customers who utilized FSA's disaster-set-aside option during the pandemic to move their arranged payments to the end of their loans.
- USDA is likewise starting two case-by-case procedures to offer extra support to farm loan customers. Under the first brand-new process, FSA will review and assist with delinquencies from 1,600 complex cases, consisting of cases in which debtors are facing personal bankruptcy or foreclosure. The second new process will include a brand-new option using existing direct loan servicing requirements to intervene quicker and help an approximated 14,000 economically distressed debtors who request support to avoid even ending up being overdue.
More information on each of the categories of support, consisting of a downloadable reality sheet, are readily available on the Inflation Reduction Act web page on farmers.gov.
Similar to other USDA support, all of these payments will be reported as income and debtors are motivated to consult their tax advisors. USDA also has resources and partnerships with cooperators who can provide additional support and help customers browse the process.
The announcement today is only the very first action in USDA's efforts to offer support to distressed farm loan borrowers and react to farmers and to improve the loan maintenance efforts at USDA by adding more tools and relaxing unnecessary constraints. Additional announcements and investments in help will be made as USDA institutes these extra modifications and enhancements.
This effort will ultimately also consist of adding more tools and unwinding unneeded constraints through help made possible by Congress through the IRA. Further support and modifications to the technique will be made in subsequent stages.
Background
USDA offers access to credit to roughly 115,000 manufacturers who can not get sufficient business credit through direct and guaranteed farm loans, which do not include farm storage center loans or marketing support loans. With the funds and direction Congress provided in Section 22006 of IRA, USDA is doing something about it to right away offer relief to qualifying distressed customers whose operations are at monetary danger while dealing with making transformational changes to how USDA tackles loan servicing in the long run so that debtors are provided the flexibility and opportunities required to deal with the fundamental risks and unpredictability associated with agricultural operations and remain in good monetary standing.
In January 2021, USDA suspended foreclosures and other adverse actions on direct farm loans due to the pandemic and urged ensured lending institutions to do the same. Recently, USDA restated this demand to guaranteed lending institutions to offer time for the complete set of IRA distressed debtor support to be provided before lenders take irreparable actions.
Producers can check out offered loan choices using the Farm Loan Discovery Tool on farmers.gov (likewise available in Spanish) or by contacting their local USDA Service Center. Producers can likewise call the FSA call center at 877-508-8364 in between 8 a.m. and 7 p.m. Eastern. USDA has tax-related resources readily available at farmers.gov/ taxes.
