Inflation Reduction Act provides payments to farm loan borrowers
By: Sydney Sheffield
The United States Department of Agriculture (USDA) has announced $800 million in debt relief to distressed USDA farm loan borrowers. The loans will assist approximately 115,000 producers who cannot obtain sufficient commercial credit through direct and guaranteed farm loans. The funding is part of the $3.1 billion Inflation Reduction Act.
“Through no fault of their own, our nation’s farmers and ranchers have faced incredibly tough circumstances over the last few years,” said USDA 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.”
At this time, farmers do not need to apply to benefit from the initiatives announced by USDA for distressed borrowers. In addition to automatic payments, USDA is working through local lenders to identify the borrowers on a case-by-case basis to receive relief. The initial $800 million in assistance was automatically issued to distressed borrowers to help cure delinquencies and resolve uncollectable farm loan debts. USDA is notifying the borrowers of the payments they have received and how they will impact future payments and due dates.
Through the Inflation Reduction Act, over 13,000 farmers have already benefited from provided resources. Approximately 11,000 delinquent direct and guaranteed borrowers had their accounts brought current and USDA paid the next scheduled annual installment for these direct loan borrowers giving them peace of mind in the near term. USDA also cleared the debt of roughly 2,100 borrowers who have had their farms foreclosed on and remain in debt. These payments will allow farmers burdened by outstanding debts to find their financial footing and continue farming.
Direct loan borrowers will receive an average of $52,000 in debt relief, while borrowers whose loans have been referred to the Treasury Department will receive an average of $101,000 in relief. For borrowers receiving loans through the guaranteed loan program, the average relief is $172,000. USDA has also announced that it will release another $500 million in payments for farmers at risk of bankruptcy or foreclosure in the coming months.
USDA has also launched a new online tool to help farmers and ranchers better navigate the farm loan application process. This change streamlined and simplified direct loan application, created an interactive online direct loan application, and established an online direct loan repayment feature that relieves borrowers from the necessity of calling, mailing, or visiting a local Service Center to pay a loan installment.
Check out the new farmer loan assistance tool here.