1 USDA Announces Additional Assistance For Distressed Farmers Facing Financial Risk
Alejandro Blaxland edited this page 2 weeks ago


1. Home 2. News & Events 3. FSA News 4. USDA Announc ...

Back to News Releases

USDA Announces Additional Assistance for Distressed Farmers Facing Financial Risk

WASHINGTON, March 27, 2023 - The U.S. Department of Agriculture (USDA) today revealed that beginning in April it will offer roughly $123 million in extra, automatic financial support for certifying farm loan program borrowers who are dealing with financial risk, as part of the $3.1 billion to assist distressed farm loan customers that was offered through Section 22006 of the Inflation Reduction Act (IRA). The statement constructs on monetary help used to borrowers through the same program in October 2022.

The IRA directed USDA to speed up help to distressed debtors of direct or surefire loans administered by USDA's Farm Service Agency (FSA) whose operations face financial danger. For example, in the October payments, farmers that were 60 days overdue due to difficulties like natural disasters, the pandemic or other unforeseen scenarios were brought existing and had their next installation paid to provide them breathing room.

"In too lots of cases, the guidelines surrounding our farm loan programs may really be destructive to assisting a debtor return to an economically practical course. As a result, some are pressed out of farming and others stuck under a debt problem that prevents them from growing or responding to opportunities," stated Agriculture Secretary Tom Vilsack. "Loan programs for the latest and more vulnerable manufacturers need to be about supplying opportunity and tailored to expect and handle stumbles and obstacles along the way. Through this help, USDA is focusing on generating long-term stability and success for distressed borrowers."

In October 2022, USDA provided around $800 million in preliminary IRA assistance to more than 11,000 overdue direct and guaranteed borrowers and roughly 2,100 borrowers who had their farms liquidated and still had staying debt. USDA shared that it would conduct case-by-case evaluations of about 1,600 complex cases for potential preliminary relief payments, consisting of cases of borrowers in foreclosure or bankruptcy. These case-by-case reviews are underway.

At the very same time in October 2022, USDA announced that it prepared for payments using separate pandemic relief financing amounting to roughly $66 million on over 7,000 direct loans to customers who utilized the USDA Farm Service Agency's disaster-set-aside option throughout the COVID-19 pandemic. Most of these payments have actually been processed and USDA expects it will finish all such payments in April 2023.

New Assistance for Distressed Borrowers

FSA intends to provide the new round of relief beginning in April to additional distressed borrowers. This will consist of approximately $123 million in automated monetary support for certifying Farm Loan Program (FLP) direct loan customers who fulfill specific criteria. Similar to the automatic payments announced in October 2022, qualifying customers will receive a specific letter detailing the assistance as payments are made. Distressed borrowers' eligibility for these brand-new classifications of automatic payments will be figured out based upon their scenarios since today. More information about the brand-new classifications that comprise the $123 million in assistance announced today and the specific quantity of assistance a distressed debtor gets can be found explained in this reality sheet, IRA Section 22006: Additional Automatic Payments, Improved Procedures, and Policy Recommendations.

To continue to make sure producers are aware of relief potentially readily available to them, all producers with open FLP loans will receive a letter detailing a brand-new opportunity to receive support if they took specific amazing procedures to prevent delinquency on their FLP loans, such as handling more financial obligation, offering residential or commercial property or squandering retirement accounts. The letter will provide details on eligibility, the particular kinds of actions that may qualify for help, and the process for requesting and providing the documents to look for that help.

These steps become part of a process USDA revealed in addition to the October payments that is concentrated on helping customers unable to make their next scheduled installation. Earlier this year, all customers ought to have received a letter detailing the procedure for seeking this type of assistance even before they end up being delinquent. Borrowers who are within two months of their next installation may look for a cashflow analysis from FSA using a recent balance sheet and running plan to identify their eligibility.

Tax Resources

USDA will continue to deal with the Department of Treasury to assist customers comprehend the prospective tax ramifications from the invoice of an IRA payment, including that options might be available to possibly avoid or alleviate any tax burden incurred as an outcome of receiving this financial support.

In early April, USDA will send a particular set of modified tax documents, educational products and resources to borrowers that got help in 2022, including a link to a webinar hosted by a group of farm tax specialists to on the choices offered. USDA can not supply tax suggestions and motivates debtors to consult their own tax expert, but FSA is supplying instructional products for customers to be familiar with the choices. USDA has tax-related resources readily available at farmers.gov/ taxes.

Improved Procedures and Policy Recommendations

FSA is settling changes to its policy handbooks to eliminate unnecessary difficulties, improve loan making and loan maintenance and supply more flexibility on how loans are structured to make the most of the chances for debtors. Additional details on those changes can be discovered in the connected truth sheet and are the start of a broader set of procedure improvements. The fact sheet likewise supplies info on the 8, no-cost legal proposals consisted of in the 2024 President's Budget that are developed to improve the debtor experience.

USDA touches the lives of all Americans each day in many positive ways. In the Biden-Harris Administration, USDA is transforming America's food system with a greater concentrate on more resilient local and local food production, fairer markets for all producers, guaranteeing access to safe, healthy and healthy food in all communities, developing brand-new markets and streams of earnings for farmers and manufacturers using climate smart food and forestry practices, making historical investments in infrastructure and tidy energy capabilities in rural America, and devoting to equity throughout the Department by eliminating systemic barriers and developing a labor force more representative of America. To learn more, see www.usda.gov.