The U.S. Department of Agriculture announced on May 1 it has “nearly $130 million in additional, automatic financial assistance” for qualifying farm loan program borrowers “who are facing financial risk.”
The announcement “is part of the $3.1 billion to help distressed farm loan borrowers that were provided through Section 22006 of the Inflation Reduction Act (IRA),” a USDA release said.
“Since the IRA was signed by President Biden in August 2022, including the payments announced today, USDA is providing approximately $1.1 billion in immediate assistance to more than 20,000 distressed borrowers.”
Agriculture Secretary Tom Vilsack said, “Through the Inflation Reduction Act, Congress directed USDA to deliver financial assistance to distressed farm loan borrowers as quickly as possible, and that is what we are delivering to help producers across the country stay on their land. USDA is hard at work to provide our most vulnerable producers the opportunity to generate long-term stability and success.”
Vilsack added, “Our goal is to make sure we provide producers access to the tools they need to help get back to a financially viable path and ultimately succeed as thriving agricultural businesses.”
Borrowers who received these automatic payments include Farm Service Agency (FSA) direct loan borrowers whose interest exceeded principle owed on outstanding debts; borrowers who had a balance up to 60 days past due as of Sept. 30, 2022, and remained delinquent; and borrowers with a recent restructure between Feb. 28, 2020, through March 27, 2023, or who had accepted an offer to restructure on or before March 27, 2023, but had not yet closed that restructure.”
This month the FSA will “begin accepting and reviewing individual distressed borrower assistance requests from direct loan borrowers who missed a recent installment or are unable to make their next scheduled installment,” the release said. “All FSA borrowers should have received a letter detailing the process for seeking this type of assistance even before they become delinquent. As the letter details, borrowers who are within two months of their next installment may seek a cashflow analysis from FSA using a recent balance sheet and operating plan to determine their eligibility.”
Also during May FSA borrowers will receive a letter detailing a new opportunity to receive assistance “if they took certain extraordinary measures to avoid delinquency on their loans, such as taking on or refinancing more debt, selling property, or cashing out retirement or college savings accounts. FSA also plans to begin working through these types of cases in May,” the release noted.
“As USDA learns more about the types of situations financially distressed farmers are facing, the Department will continue to update borrowers and the public about new eligibility criteria. USDA will also provide regular updates about its progress in deploying this funding to farmers who need it.
USDA is an equal opportunity provider, employer and lender,” the release concluded.
