The U.S. Department of Agriculture (USDA) has announced that beginning in April it will provide approximately $123 million in additional, automatic financial assistance for qualifying farm loan program borrowers who are facing financial risk. The relief is part of the $3.1 billion to help distressed farm loan borrowers that was provided through Section 22006 of the Inflation Reduction Act (IRA).
The announcement builds on financial assistance offered to borrowers through the same program in October 2022. The IRA directed USDA to expedite assistance to distressed borrowers of direct or guaranteed loans administered by USDA’s Farm Service Agency (FSA) whose operations face financial risk. For example, in the October payments, farmers that were 60 days delinquent due to challenges such as natural disasters, the pandemic or other unexpected situations were brought current and had their next installment paid to give them breathing room.
FSA intends to provide the new round of relief starting in April to additional distressed borrowers. This will include approximately $123 million in automatic financial assistance for qualifying Farm Loan Program (FLP) direct loan borrowers who meet certain criteria. Similar to the automatic payments announced in October 2022, qualifying borrowers will receive an individual letter detailing the assistance as payments are made. Distressed borrowers’ eligibility for these new categories of automatic payments will be determined based on their current circumstances, USDA said.
More information about the new categories that make up the $123 million in assistance and the specific amount of assistance a distressed borrower receives can be found described in the fact sheet “IRA Section 22006: Additional Automatic Payments for Distressed Borrowers.”
To continue to make sure producers are aware of relief potentially available to them, all producers with open FLP loans will receive a letter detailing a new opportunity to receive assistance if they took certain extraordinary measures to avoid delinquency on their FLP loans, such as taking on more debt, selling property or cashing out retirement accounts. The letter will provide details on eligibility, the specific types of actions that may qualify for assistance, and the process for applying for and providing the documentation to seek that assistance.
“In too many cases, the rules surrounding our farm loan programs may actually be detrimental to helping a borrower get back to a financially viable path. As a result, some are pushed out of farming and others stuck under a debt burden that prevents them from growing or reacting to opportunities,” said Agriculture Secretary Tom Vilsack. “Loan programs for the newest and more vulnerable producers must be about providing opportunity and tailored to expect and manage stumbles and hurdles along the way. Through this assistance, USDA is focusing on generating long-term stability and success for distressed borrowers.”
