The U.S. Department of Agriculture provided $2.3 billion in debt assistance to distressed farmers, a new report shows. The debt relief was part of the $3.1 billion appropriated under the Inflation Reduction Act of 2022.
Farm Service Agency officials say they are using $250 million of the remaining funds to assist about 4,600 additional borrowers.
Those same officials said that the agency would consider using the remaining estimated balance of nearly $300 million for those distressed by natural disasters.
The Government Accountability Office published the report evaluating the U.S. Department of Agriculture’s debt relief initiatives for distressed borrowers.
The report highlighted key successes and challenges in implementing the loan debt assistance program, designed to assist farmers and ranchers facing financial hardships.
The USDA’s Farm Service Agency administers these programs. FSA directly loans producers and guarantees loans from USDA-approved commercial lenders and credit associations. From October 2022 to November 2023, the agency distributed assistance in six phases.
The report was conducted from September 2023 through December 2024.
FSA officials say the agency aims “to assist qualifying distressed farmers as quickly as possible.” The agency provides the delinquent loan amount and covers the scheduled loan installment without borrowers incurring additional debt.
According to the report, about 25% of qualified borrowers received less than $25,000, while less than 2% received assistance of $500,000 or more.
The FSA’s Farm Loan Program offers direct and guaranteed loan programs created as a safety net for agricultural producers. It provides credit when farmers and ranchers can’t secure commercial loans.
According to FSA officials, as of May 6, 2024, the agency held around 136,000 direct loans and nearly 50,000 guaranteed loans. Farmers and ranchers can have multiple direct or guaranteed loans with FSA.
Disruptions from the COVID-19 pandemic and climate-related weather events put agricultural producers at additional risk of falling behind on loan payments, potentially losing their farms or ranches.
According to the report, half of the assistance distributed went to borrowers in the Plains and South regions, where the delinquent farm loan amounts were highest.
FSA officials who were interviewed said that 83 loan borrowers refused assistance after FSA assisted the borrower.
The GOA continues to monitor the programs as they evolve.
