A congressionally created $3.1 billion debt relief program for financially distressed farmers who borrowed money through USDA programs could be in place within weeks, said Agriculture Secretary Tom Vilsack on Wednesday. Speed is vital, he said, because a moratorium on debt collections and foreclosures could expire in October.
“We know we have to act quickly,” said Vilsack during a teleconference. “It could be a phased-in program” that begins with borrowers in the most precarious positions and then be broadened to encompass other at-risk operators.
Lawmakers earmarked $3.1 billion in “farm loan immediate relief for borrowers with at-risk agricultural operations” in the climate, healthcare, and tax law enacted this month. It replaces a $4 billion loan forgiveness program for farmers of color that was being challenged in court. Black farm groups were disappointed by repeal of the $4 billion program. “To acknowledge and correct racism is not unconstitutional or racist,” said the National Black Farmers Association.
In the same legislation, Congress provided $2.2 billion in financial assistance of up to $500,000 apiece to farmers, ranchers, and forest landowners who had experienced discrimination in USDA farm loan programs in the past. The spending would be administrated by entities outside the USDA.
“It’s a new program, which requires a lot of thought. We want to make sure we do it right,” said Vilsack, who noted that lawmakers did not define who they meant by “distressed borrowers of direct or guaranteed loans” administered by the Farm Service Agency.
The Black and other socially disadvantaged farmers targeted for loan forgiveness in the 2021 program could be among the farmers, including whites, deemed to be distressed borrowers.
Early this year, the USDA temporarily suspended past-due debt collections and foreclosures of financially distressed borrowers under its direct farm loan and farm storage facility loan programs. The suspension, affecting more than 12,000 borrowers, was expected to remain in place until the government ended the pandemic health emergency that was declared in January 2020 and is still in place. The government could allow the declaration to expire on Oct. 13, said the law firm Morgan Lewis last month.
Also on Wednesday, the USDA said it would spend up to $550 million on projects to enable underserved farmers to access land, credit, and markets and to train a diverse next generation of agricultural professionals. Vilsack said the funding would advance “equity for all, including people who have been underserved, marginalized, and adversely affected by persistent poverty and inequality.” Some $300 million would be devoted to projects to increase access to land, capital, and markets, and $250 million would go to colleges serving minority students.
A video of Vilsack’s announcement of the $550 million for underserved producers and next-generation ag professionals is available here.