Some 4,650 financially distressed farmers who owe money on USDA direct and guaranteed loans will share $250 million in payments from the government, said the Agriculture Department on Monday. With the assistance, “more than 4,600 producers across the country will see another production season,” said Zach Ducheneaux, Farm Service Agency administrator.
The USDA said it has provided roughly $2.4 billion in assistance, including that announced on Monday, to 43,900 distressed borrowers with funding from the 2022 climate, healthcare, and tax law. The new round of money will go to borrowers who did not receive assistance previously. It would be split into $235 million for delinquent loans and $15 million for borrowers with shared appreciation agreements on their guaranteed loans.
“USDA continues to invest in the future of producers with our loan portfolio,” said Ducheneaux, who pointed to revisions this fall in USDA loan programs. ‘We’re also creating a more resilient and supportive loan system for the future.”
For farmers with direct loans, the USDA will pay the amount of outstanding delinquencies as of Sept. 30. A check jointly payable to borrower and lender will be issued for guaranteed loans that are at least 30 days’ delinquent. The USDA described differing courses of action for shared appreciation agreements depending on whether the agreement has matured or not.
Under rules that took effect on Sept. 25, the USDA amended its farm loan programs to allow more flexibility in repayment terms for producers and to reduce the collateral required when they borrow money. By law, the USDA is the lender of last resort to credit-worthy producers who cannot get financing elsewhere. It offers direct and guaranteed loans for operating costs and purchase of farmland.
The USDA issued $2 billion in payments in July to more than 43,000 farmers who suffered discrimination when they applied for farm loans in the past. More than half of recipients were producers in Mississippi and Alabama, who received a combined $905.5 million. Congress provided funds for the Discrimination Financial Assistance Program, open for claims based on race, sex, gender identity, age, disability, marital status, and other categories, in 2022 after lawsuits stymied a debt-relief plan aimed at farmers of color.