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USDA PROVIDES PAYMENTS OF NEARLY $800 MILLION IN ASSISTANCE TO HELP KEEP FARMERS
FARMING



Immediate Help for Over 13,000 Distressed USDA Farm Loan Borrowers; Begins
process to provide up to $500 million more for up to 23,000 additional borrowers


RELEASE & CONTACT INFO

Press Release
Release No. 0223.22

Contact: USDA Press
Email: press@usda.gov

WASHINGTON, Oct. 18, 2022 - The U.S. Department of Agriculture (USDA) today
announced that distressed borrowers with qualifying USDA farm loans have already
received nearly $800 million in assistance, as part of the $3.1 billion in
assistance for distressed farm loan borrowers provided through Section 22006 of
the Inflation Reduction Act (IRA). The IRA directed USDA to expedite assistance
to distressed borrowers of direct or guaranteed loans administered by USDA’s
Farm Service Agency (FSA) whose operations face financial risk.

Today’s announcement kicks off a process to provide assistance to distressed
farm loan borrowers using several complementary approaches, with the goal of
keeping them farming, removing obstacles that currently prevent many of these
borrowers from returning to farming, and improving the way that USDA approaches
borrowing and servicing. Through this assistance, USDA is focused on generating
long-term stability and success for distressed borrowers.

“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.”

Work has already started to bring some relief to distressed farmers. As of
today, over 13,000 borrowers have already benefited from the resources provided
under the Inflation Reduction Act as follows:

 * Approximately 11,000 delinquent direct and guaranteed borrowers had their
   accounts brought current. USDA also paid the next scheduled annual
   installment for these direct loan borrowers giving them peace of mind in the
   near term.
 * Approximately 2,100 borrowers who had their farms foreclosed on and still had
   remaining debt have had this debt resolved in order to cease debt collections
   and garnishment relieving that burden that has made getting a fresh start
   more difficult.

In addition to the automatic assistance already provided, USDA has also outlined
steps to administer up to an additional $500 million in payments to benefit the
following distressed borrowers:

 * USDA will administer $66 million in separate automatic payments, using
   COVID-19 pandemic relief funds, to support up to 7,000 direct loan borrowers
   who used FSA’s disaster-set-aside option during the pandemic to move their
   scheduled payments to the end of their loans.
 * USDA is also initiating two case-by-case processes to provide additional
   assistance to farm loan borrowers. Under the first new process, FSA will
   review and assist with delinquencies from 1,600 complex cases, including
   cases in which borrowers are facing bankruptcy or foreclosure. The second new
   process will add a new option using existing direct loan servicing criteria
   to intervene more quickly and help an estimated 14,000 financially distressed
   borrowers who request assistance to avoid even becoming delinquent.

More details on each of the categories of assistance, including a downloadable
fact sheet, are available on the Inflation Reduction Act webpage on farmers.gov.

Similar to other USDA assistance, all of these payments will be reported as
income and borrowers are encouraged to consult their tax advisors. USDA also has
resources and partnerships with cooperators who can provide additional
assistance and help borrowers navigate the process.

The announcement today is only the first step in USDA’s efforts to provide
assistance to distressed farm loan borrowers and respond to farmers and to
improve the loan servicing efforts at USDA by adding more tools and relaxing
unnecessary restrictions. Additional announcements and investments in assistance
will be made as USDA institutes these additional changes and improvements.

This effort will ultimately also include adding more tools and relaxing
unnecessary restrictions through assistance made possible by Congress through
the IRA. Further assistance and changes to the approach will be made in
subsequent phases.

Background

USDA provides access to credit to approximately 115,000 producers who cannot
obtain sufficient commercial credit through direct and guaranteed farm loans,
which do not include farm storage facility loans or marketing assistance loans.
With the funds and direction Congress provided in Section 22006 of IRA, USDA is
taking action to immediately provide relief to qualifying distressed borrowers
whose operations are at financial risk while working on making transformational
changes to how USDA goes about loan servicing in the long run so that borrowers
are provided the flexibility and opportunities needed to address the inherent
risks and unpredictability associated with agricultural operations and remain in
good financial standing.

In January 2021, USDA suspended foreclosures and other adverse actions on direct
farm loans due to the pandemic and encouraged guaranteed lenders to follow suit.
Last week, USDA reiterated this request to guaranteed lenders to provide time
for the full set of IRA distressed borrower assistance to be made available
before lenders take irreparable actions.

Producers can explore available loan options using the Farm Loan Discovery Tool
on farmers.gov (also available in Spanish) or by contacting their local USDA
Service Center. Producers can also call the FSA call center at 877-508-8364
between 8 a.m. and 7 p.m. Eastern. USDA has tax-related resources available at
farmers.gov/taxes.

USDA touches the lives of all Americans each day in so many positive ways. In
the Biden-Harris Administration, USDA is transforming America’s food system with
a greater focus on more resilient local and regional food production, fairer
markets for all producers, ensuring access to safe, healthy and nutritious food
in all communities, building new markets and streams of income for farmers and
producers using climate smart food and forestry practices, making historic
investments in infrastructure and clean energy capabilities in rural America,
and committing to equity across the Department by removing systemic barriers and
building a workforce more representative of America. To learn more, visit
www.usda.gov.

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USDA is an equal opportunity provider, employer, and lender.

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