The U.S. Department of Agriculture (USDA) Tuesday announced that distressed borrowers with qualifying USDA farm loans have already received nearly $800 million in assistance, as part of the $3.1 billion in assistance for distressed farm loan borrowers provided through Section 22006 of the 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.
Tuesday’s announcement will begin the process of providing assistance to struggling agricultural loan borrowers using several complementary approaches. This is intended to preserve agriculture, remove the barriers that currently prevent many of these borrowers from returning to agriculture, and improve how the USDA deals with loans and provides services. With this support, USDA focuses on long-term stability and success for struggling borrowers.
United States Agriculture Secretary Tom Vilsack talks about the provisions in the Inflation Reduction Act, and the directives given to USDA.
Vilsack says the goal is to help distressed borrowers find a way to be able to get assistance before a loan must be collected on. It?s more of an intervention procedure. USDA doesn?t want to be seen as a predatory lender, but as an organization meant to help our farmers.
Over 13,000 borrowers have already benefited from the resources provided under the Inflation Reduction Act as follows:
- Approximately 11,000 delinquent direct and guaranteed borrowers had their accounts brought current. USDA also paid the next scheduled annual installment for these direct loan borrowers giving them peace of mind in the near term.
- Approximately 2,100 borrowers who had their farms foreclosed on and still had remaining debt have had this debt resolved in order to cease debt collections and garnishment relieving that burden that has made getting a fresh start more difficult.
Vilsack says that there is also going to be set aside to help roughly 14,000 borrowers who may be facing difficulties with their USDA loans soon, and whom the agency expects to apply for some assistance. Whether those are river terminals or other impacted by drought or other natural phenomenon. $500 million has also been set aside for those cases.
More details on each of the categories of assistance, including a downloadable fact sheet, are available on the Inflation Reduction Act webpage on farmers.gov.
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 partnerships with resources and collaborators that provide additional assistance and help borrowers navigate the process.
Today’s announcement boosts lending services efforts at the USDA by aiding struggling agricultural loan borrowers, accommodating farmers, adding more tools, and easing unnecessary restrictions. It’s just the first step in USDA’s effort to improve their situation.
Ultimately, this effort will also include adding more tools and easing unnecessary restrictions through the support that Congress has made possible through the IRA. Further assistance and change of focus will come at a later stage.
