USDA begins providing relief to thousands of farmers with operations at financial risk
By Chandelis Duster, CNN
(CNN) -- The US Department of Agriculture has begun providing debt relief to thousands of farmers whose operations are financially struggling, the agency announced on Tuesday.
The announcement comes nearly two months after the Inflation Reduction Act was signed into law, which provides $3.1 billion for "distressed borrowers" whose farming operations are at financial risk.
According to the USDA, more than 13,000 borrowers have received the relief, totaling nearly $800 million of the allocated amount under the IRA so far.
This includes 11,000 farmers with past due direct and guaranteed farm loans that were 60 or more days past due as of September 30 and now have their loan accounts current, the agency said. The next scheduled annual installment for direct loan borrowers has also been paid, and 2,100 borrowers whose farms were foreclosed but had outstanding debt also had their debts paid.
The agency also said it is launching two case-by-case processes to give additional relief to farmers with farm loans. The first process will review 1,600 "complex cases" in which borrowers are delinquent and facing foreclosure or bankruptcy. The second process will add a new option to quickly assist an estimated 14,000 financially at risk borrowers to help them avoid delinquency.
"Through no fault of their own, our nation's farmers and ranchers have faced incredibly tough circumstances over the last few years," Agriculture Secretary Tom Vilsack said in a statement Tuesday, adding that the funding "helps keep our farmers farming and provides a fresh start for producers in challenging positions."
In addition to the relief for distressed borrowers, the USDA also announced $66 million in automatic payments for up to 7,000 direct loan borrowers who used a measure under the Farm Service Agency to move their scheduled payments to the end of their loans during the coronavirus pandemic.
During a call with reporters on Tuesday, FSA Administrator Zach Ducheneaux said the average relief amount for distressed borrowers so far is about $52,000 for direct loan borrowers and the average is around $172,000 for guaranteed loan borrowers.
At this point in the process, Vilsack said on the call, he does not anticipate or expect an application process for borrowers. He also explained that a "distressed borrower" includes those who have not been able to make a farm loan payment, at risk of losing their operations, in bankruptcy or in foreclosure, or have been struggling to make payments.
A provision in the Inflation Reduction Act aims to provide financial relief to farmers of color who have faced discrimination from the USDA. The provision changes a section of the American Rescue Plan that allocated funds for creation of the USDA's Equity Commission and $1 billion to provide general assistance. It now includes $2.2 billion for a program to give "financial assistance, including the cost of any financial assistance, to farmers, ranchers, or forest landowners determined to have experienced discrimination" prior to January 1, 2021, in USDA farm lending programs.
The provision allows any farmer, of any race, to receive assistance up to $500,000 "as determined to be appropriate based on any consequences experienced from the discrimination." It also repeals another section of the American Rescue Plan that allocated debt relief and repayments for tax liabilities and other fees associated with debt payments for socially disadvantaged farmers and ranchers -- a group that includes Black and other minority farmers -- that had been the subject of several lawsuits from some White farmers.
In an announcement on Thursday, the USDA said it was looking for input from the public on how it should "design and implement" the program for discrimination relief because "we cannot do this right without input from farmers, ranchers, and forest landowners."
The-CNN-Wire
™ & © 2022 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.
