US offers $1.3 billion in debt relief to struggling farmers and ranchers

DES MOINES, Iowa – The federal government last week announced a program that will provide $1.3 billion in debt relief to approximately 36,000 farmers who have fallen behind on loan repayments or are facing a seizure.

The U.S. Department of Agriculture announced the Agricultural Loan Relief Program funded from $3.1 billion set aside in the Inflation Reduction Act allocated to help distressed direct loan borrowers or guarantees administered by the USDA. The law was passed by Congress and signed by President Joe Biden in August.

The USDA provides loans to approximately 115,000 farmers and ranchers who cannot obtain commercial credit. Those who have missed payments, are in foreclosure, or are heading into default will receive help from the USDA. Farmers’ financial difficulties can be caused by a variety of problems, including drought and transportation bottlenecks.

“Throughout their fault, our country’s farmers and ranchers have faced incredibly difficult circumstances over the past few years,” Agriculture Secretary Tom Vilsack said. “The funding included in today’s announcement keeps our farmers working and provides a fresh start for producers in difficult positions.

About 11,000 agricultural borrowers in arrears on direct or guaranteed loans for 60 days or more are receiving automatic electronic payments to be current on their loans. Each farmer with a direct loan received about $52,000 and those with guaranteed loans received about $172,000. The total cost for this group is nearly $600 million. Farmers who have received this assistance will receive a letter notifying them that their payments have been made and they will remain up to date until their next annual payment is due in 2023, Vilsack said.

An additional $200 million was used to immediately help 2,100 agricultural borrowers after their loans were foreclosed, but who still owed money and whose refunds of taxes and other resources were collected by the US Treasury. The money will be used to pay the money these farmers owe to give them a fresh start, Vilsack said. The USDA said farmers in this category received an average of $101,000.

An additional $571 million will be used to help several additional groups, including:

• 7,000 farmers who during the COVID pandemic delayed loan repayments until their loans ended. It will cost $66 million.

• 1,600 farmers facing bankruptcy or foreclosure will be assisted on a case-by-case basis with one-on-one meetings to assess their problem and find solutions at a cost of $330 million.

• 14,000 agricultural borrowers in financial difficulty and facing cash flow problems who request assistance to avoid missing a loan repayment will receive additional assistance. Vilsack said those issues could be caused by drought or low levels on the Mississippi River that slow down barge traffic, causing grain transportation issues. Up to $175 million will be available for this program.

The recently announced money is the first round of payments to ensure farmers stay in business or return to farming.

The rest of the $3.1 billion will be used to help ease unnecessary lending restrictions and provide additional aid to be announced later, the USDA said.

The USDA found that farmers assisted by the program were distressed borrowers hard hit by pandemic-induced market disruptions, exacerbated by more frequent and intense climate-driven natural disasters, the USDA said.

President Joe Biden and his administration continue to face criticism for enacting a program to cancel certain college loans, but some of the Republican politicians who have criticized the program did not respond to questions about whether they support the agricultural loan assistance.

The USDA also provided $31 billion to help nearly a million farmers offset declining sales, prices and other losses due to the coronavirus pandemic in 2021 and 2022, the US Government said. Accountability Office.

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