The U.S. Department of Agriculture (USDA) has announced an additional $130 million in automatic financial assistance for eligible farm loan program borrowers who are experiencing financial difficulties. This funding is part of $3.1 billion allocated under Section 22006 of the Inflation Reduction Act (IRA). Including the newly announced payments, USDA has provided approximately $1.1 billion in immediate assistance across 20,000 distressed borrowers since the IRA was signed by President Biden in August 2022.

Agriculture Secretary Tom Vilsack emphasized that USDA is committed to delivering financial aid to distressed farm loan borrowers promptly to help producers across the country sustain their agricultural operations. The ultimate goal is to provide vulnerable producers with the necessary resources and tools to regain financial stability and thrive as successful agricultural businesses.

Automatic payments are granted to different groups of borrowers, including those with Farm Service Agency (FSA) direct loans whose interest exceeds the principal owed, borrowers who were up to 60 days past due as of September 30, 2022, and remained delinquent, and borrowers who recently underwent loan restructuring or accepted offers for restructuring. These payments are intended to alleviate their financial burden and offer support through challenging times.

Starting in May, FSA will begin accepting individual distressed borrower assistance requests from direct loan borrowers who have missed recent installments or are unable to make their upcoming payments. FSA borrowers should have received a letter outlining the process for seeking this type of assistance, even before becoming delinquent. Borrowers who are within two months of their next installment can request a cashflow analysis from FSA using a recent balance sheet and operating plan to determine their eligibility.

Additionally, FSA borrowers will receive a letter in May providing details about a new opportunity for assistance if they have taken extraordinary measures, such as assuming more debt, selling property, or tapping into retirement or college savings accounts, to avoid loan delinquency.

As USDA gains further insights into the financial challenges faced by distressed farmers, the department will continue to update borrowers and the public regarding new eligibility criteria. Regular progress reports will be provided on the deployment of this funding to farmers in need.