$1 bil. debt relief ahead for 36,000 farmers
DES MOINES, Iowa — The federal government announced last week a program that will provide $1.3 billion in debt relief for about 36,000 farmers who have fallen behind on loan payments or face foreclosure.
The U.S. Department of Agriculture announced on Tuesday the farm loan relief program funded from $3.1 billion set aside in the Inflation Reduction Act allocated toward assisting distressed borrowers of direct or guaranteed loans administered by USDA. The law was passed by Congress and signed by President Joe Biden in August.
The USDA provides loans to about 115,000 farmers and livestock producers who cannot obtain commercial credit. Those who have missed payments, are in foreclosure or are heading toward default will get help from the USDA. Financial difficulties for farmers may be caused by a variety of issues including drought and transportation bottlenecks.
“Through no fault of their own, our nation’s farmers and ranchers have faced incredibly tough circumstances over the last few years,” said 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.”
About 11,000 farm borrowers delinquent on direct or guaranteed loan payments for 60 days or longer are receiving automatic electronic payments to get them 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 received this help will get a letter informing them that their payments have been made and they will remain current until their next annual payment is due in 2023, Vilsack said.
Another $200 million has been used to immediately help 2,100 farm borrowers after their loans had been foreclosed but who still owed money and had their tax refunds and other resources taken by the U.S. 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.
The money announced Tuesday is the first round of payments designed to help ensure the farmers stay in business or re-enter farming.
President Joe Biden and his administration continue to endure criticism for enacting a program to forgive some college loans but some of the Republican politicians who have criticized that program did not respond to questions about whether they support the farm loan help.
The USDA also provided $31 billion to help nearly a million farmers offset lower sales, prices and other losses due to the coronavirus pandemic in 2021 and 2022, the U.S. Government Accountability Office has said.