Over 12,800 Farmers to Receive Aid, Continuing USDA’s $2.5 Billion Support Initiative
The U.S. Department of Agriculture (USDA) has finalized the distribution of approximately $300 million in assistance aimed at supporting over 12,800 distressed direct and guaranteed farm loan borrowers.
This substantial aid is part of Section 22006 of the Inflation Reduction Act, underscoring the USDA’s ongoing commitment to helping farmers and ranchers navigate financial challenges. The announcement, made on December 20, 2024, marks a significant milestone in the USDA’s efforts to sustain agricultural operations across the nation.
Since President Biden signed the Inflation Reduction Act into law in August 2022, the USDA has proactively provided around $2.5 billion in assistance to more than 47,800 distressed borrowers.
This latest tranche of $300 million is expected to further alleviate the financial burdens farmers and ranchers face, enabling them to retain their land and continue their vital agricultural activities. According to a Produce BlueBook report, the USDA has demonstrated swift and effective action over the past two years to support those in the agricultural sector experiencing economic distress.
Agriculture Secretary Tom Vilsack emphasized the USDA’s dedication to the farming community, stating:
“USDA has always been committed to standing by our nation’s farmers and ranchers, especially in their most challenging times.”
He further highlighted that the recent payments would provide essential relief, helping producers stay on their land and maintain their farming operations. Vilsack also noted the USDA’s broader efforts to enhance the loan system, ensuring that farmers have the necessary tools for current and future success.
The $300 million assistance package encompasses various forms of support tailored to different borrower needs. A significant portion, $168.5 million, is allocated to cover outstanding delinquencies on qualifying direct loans as of November 30, 2024, for borrowers who are one or more days delinquent.
Additionally, $5 million is designated for guaranteed loans with delinquencies of fewer than 30 days as of September 30, 2024, addressing those who were previously ineligible for assistance announced on October 7, 2024.
Further allocations include $67.3 million to cover the next installment due on all Farm Loan Programs (FLP) direct loans for borrowers who received delinquency assistance under IRA 22006.
Another $35 million is set aside for borrowers who have restructured their loans or accepted offers to restructure, ensuring that their next installment payments are manageable. Emergency funds amounting to $9 million and $4.1 million are also included to address outstanding direct Emergency Loans and protective or emergency advances, respectively.
Moreover, $3.9 million is earmarked to pay outstanding interest for direct borrowers whose interest exceeds their principal debt, and $1.8 million is allocated for outstanding Economic Emergency (EE) loans for borrowers with both EE and qualifying Consolidated Farm and Rural Development Act loans. A smaller portion, $109,000, is dedicated to paying outstanding non-capitalized interest for all direct borrowers as of November 30, 2024.
Eligibility for FLP payments is determined on a loan-by-loan basis, allowing distressed borrowers to receive assistance under multiple categories if they have multiple qualifying loans. However, each loan may only receive one payment, with priority given to the option that provides the greatest payment amount. This ensures that the most critical financial needs are addressed first.
In addition to the financial assistance, the USDA has introduced several improvements to the Farm Loan Programs. The Enhancing Program Access and Delivery for Farm Loans rule includes the Distressed Borrower Set-Aside program, which allows qualifying distressed borrowers to set aside up to a full loan installment at a reduced interest rate of 0.125%. These policy changes aim to expand opportunities for farmers to increase profitability and make strategic investments in their agricultural operations.
The Farm Service Agency (FSA) has also undertaken initiatives to streamline and automate customer-facing processes. Innovations such as the Loan Assistance Tool, an online Loan Application, and an online direct loan repayment feature have been implemented to make accessing and managing loans more efficient.
Additionally, the FSA has launched the Distressed Borrowers Assistance Network, providing personalized support to financially distressed farmers and ranchers to help them regain stability.
