The United States Department of Agriculture will roll out a $1.3 billion debt relief program to farmers facing foreclosure or who are behind on loan payments.
Approximately 36,000 farmers are eligible for the funding made available through the Inflation Reduction Act, which set aside $3.1 billion to assist borrowers of direct or guaranteed USDA loans.
“With the funds and direction Congress provided in Section 22006 of IRA, USDA is taking action to immediately provide relief to qualifying distressed borrowers whose operations are at financial risk while working on making transformational changes to how USDA goes about loan servicing in the long run so that borrowers are provided the flexibility and opportunities needed to address the inherent risks and unpredictability associated with agricultural operations and remain in good financial standing,” the agency said in its announcement on Oct. 19.
The USDA reports that $800 million have already been distributed to eligible loan holders. Using the COVID-19 relief fund, the agency will make automatic payments for 7,000 borrowers totaling $66 million.
“About 11,000 farm borrowers delinquent on direct or guaranteed loan payments for 60 days or longer are receiving automatic electronic payments to get them current on their loans. Each farmer with a direct loan received about $52,000 and those with guaranteed loans received about $172,000,” per ABC News.
“Through no fault of their own, our nation’s farmers and ranchers have faced incredibly tough circumstances over the last few years,” said Agriculture Secretary Tom Vilsack. “The funding included in today’s announcement helps keep our farmers farming and provides a fresh start for producers in challenging positions.”
Roughly 115,000 farmers and livestock providers who cannot afford a commercial loan have USDA loans. Droughts, transportation issues, and COVID-19 regulations have financially hurt the agricultural industry, making it difficult for some to make loan payments.
At the start of the pandemic, the USDA announced it would invest billions of dollars in a plan to support the national food supply chain, which had been impacted by outbreak-related regulations. The agency also agreed to spend $3 billion buying produce, dairy, and meat from local and regional distributors for food banks, aid organizations, and churches.
“The decision comes amid rising pressure from the U.S. farm lobby for government purchases as growers and ranchers struggle to get their goods to market because of disruptions caused by the pandemic, forcing some to throw out supplies,” reported Reuters at the time.
President Donald Trump also authorized $16 billion in direct payments for the mass purchase of produce, meat, and other agricultural products from farmers in America.
“This first round of payments is focused on ‘stopping the bleeding’ and helping to ensure distressed farm loan borrowers can stay in or re-enter the business of agriculture and continue feeding their communities,” the USDA said of the Oct. 18 announcement, promising further assistance in subsequent phases.
