WASHINGTON, DC – The United States Department of Agriculture (USDA) has announced that defaulting borrowers with eligible USDA agricultural loans will receive $3.1 billion in assistance to defaulting agricultural loan borrowers provided through Section 22006 of the Farm Code. As part of that, we announced that we have already received nearly $800 million in support. Inflation Reduction Act (IRA). The IRA has directed USDA to expedite assistance to borrowers of direct or insured loans administered by USDA’s Farm Service Agency (FSA) facing financial risk.
This announcement begins the process of providing assistance to distressed agricultural loan borrowers using several complementary approaches. Its purpose is to preserve agriculture, remove the obstacles that currently prevent many of these borrowers from returning to agriculture, and improve the way USDA borrows. service. Through this assistance, USDA focuses on long-term stability and success for distressed borrowers.
“Our country’s farmers and ranchers have faced some very tough times over the past few years, and it’s not their fault,” said Agriculture Secretary Tom Vilsack. of agriculture and help provide a fresh start for struggling growers.”
Work has already begun to bring some relief to needy farmers. As of today, more than 13,000 borrowers benefit from resources provided under the Inflation Control Act, including:
• Approximately 11,000 delinquent direct and guaranteed borrowers have reinstated their accounts. USDA is also giving these direct loan borrowers the next scheduled annual installments, giving them peace of mind in the short term.
• Approximately 2,100 borrowers whose farms have been foreclosed and are still in debt have settled their debts to stop the debt collections and foreclosures that make fresh starts more difficult.
In addition to the automatic assistance already provided, USDA also outlines procedures for administering up to $500 million in additional payments to benefit needy borrowers such as:
• USDA will use the COVID-19 Pandemic Relief Fund to manage $66 million in individual automatic payments and the FSA’s Contingency Option to keep scheduled payments through the end of the loan during the pandemic. Supports up to 7,000 round-up direct loan borrowers. .
• USDA is also initiating two case-by-case processes to provide additional assistance to agricultural loan borrowers. Under the first new process, the FSA will review and assist delinquencies from 1,600 complex cases, including those where borrowers are facing bankruptcy or foreclosure. A second new process will use existing Direct Loan Service standards and add new options to intervene more quickly to reach an estimated 14,000 financially distressed borrowers seeking help to avoid delinquency. We support.
For more information on each category of assistance, including downloadable fact sheets, visit the Farmers’ Inflation Reduction Act web page.government
As with other USDA assistance, all of these payments are reported as income and borrowers are advised to consult their tax advisor. USDA also has resources and partnerships with collaborators who can provide additional assistance and help borrowers navigate the process.
Recent announcements are just the first steps in USDA’s efforts. USDA will improve its lending services efforts at USDA by providing assistance to needy agricultural loan borrowers, accommodating farmers, adding more tools, and easing unnecessary restrictions. increase. Additional announcements and investments in support will be made as USDA implements these additional changes and improvements.
This effort will also eventually include adding more tools and easing unnecessary restrictions through support made possible by Congress through the IRA. Further assistance and changes to the approach will be made in subsequent phases.
Background USDA provides access to financing for approximately 115,000 growers who are unable to obtain sufficient commercial credit through direct and guaranteed farm loans, not including farm storage facility loans and marketing assistance loans. The funds and direction Congress provided in Section 22006 of the IRA allow the USDA to qualify its operations for financial risk while undertaking work that will, in the long term, transform the way the USDA provides loan services. has taken steps to provide relief to some distressed borrowers. Borrowers are provided with the flexibility and opportunity they need to manage the inherent risks and unpredictability of farming and maintain good financial standing.
In January 2021, the USDA suspended foreclosures and other adverse actions on direct agricultural loans because of the pandemic, urging insured lenders to follow suit. Last week, the USDA issued a request to insured lenders to provide time to make available full assistance to distressed borrowers in the IRA before lenders take irreversible action. repeated.
Growers can use the Farm Loan Discovery Tool on farmers.gov (also available in Spanish) or contact your local USDA Service Center to explore available loan options. Producers may also call the FSA Call Center (8am to 7pm ET) at 877508-8364. USDA has tax resources available at farmers.gov/taxs.