28 January 2021

3 minute read

North America

Due to the national public health emergency caused by COVID-19, the US Department of Agriculture announced the temporary suspension of past-due debt collections and foreclosures for distressed borrowers under the Farm Storage Facility Loan and the Direct Farm Loan programs administered by the Farm Service Agency (FSA).

USDA will temporarily suspend non-judicial foreclosures, debt offsets or wage garnishments, and referring foreclosures to the Department of Justice; and USDA will work with the US Attorney’s Office to stop judicial foreclosures and evictions on accounts that were previously referred to the Department of Justice.

Additionally, USDA has extended deadlines for producers to respond to loan servicing actions, including loan deferral consideration for financially distressed and delinquent borrowers. In addition, for the Guaranteed Loan program, flexibilities have been made available to lenders to assist in servicing their customers.

This announcement by USDA expands previous actions undertaken by the Department to lessen financial hardship. According to USDA data, more than 12,000 borrowers—approximately 10 percent of all borrowers—are eligible for the relief announced today. Overall, FSA lends to more than 129,000 farmers, ranchers and producers.

Statement from Deputy Chief of Staff, Robert Bonnie

“USDA and the Biden Administration are committed to bringing relief and support to farmers, ranchers and producers of all backgrounds and financial status, including by ensuring producers have access to temporary debt relief,” said Robert Bonnie, Deputy Chief of Staff, Office of the Secretary.

“Not only is USDA suspending the pipeline of adverse actions that can lead to foreclosure and debt collection, we are also working with the Departments of Justice and Treasury to suspend any actions already referred to the applicable Agency. Additionally, we are evaluating ways to improve and address farm related debt with the intent to keep farmers on their farms earning living expenses, providing for emergency needs, and maintaining cash flow.”

The temporary suspension is in place until further notice and is expected to continue while the national COVID-19 disaster declaration is in place.

National Farmers Union says debt relief will ensure farmers can stay in business

The announcement comes as a relief to National Farmers Union (NFU), which has been pushing legislators and administration officials to provide family farmers and ranchers with the support they need to withstand the added challenges caused by the pandemic. In a statement, NFU President Rob Larew lauded the action, saying that it will be particularly beneficial to beginning and socially disadvantaged farmers:

“With so many factors beyond their control, farmers know to be prepared for a bad year here and there. But it hasn’t just been just one bad year because of the pandemic – it’s been five bad years because of trade wars, climate change, and stubbornly low prices. Even the most established farmers may not have the reserves to cope with this kind of enduring financial strain – and beginning and historically underserved farmers almost certainly do not.

“As a country, we really can’t afford to lose these farmers. The agriculture industry has already experienced rapid consolidation over the last several decades, to the detriment of rural communities and national food security. The pandemic could have accelerated this trend – but fortunately, the USDA’s ongoing support will likely prevent the worst-case outcome. By suspending debt collections and foreclosures, the agency will help struggling farmers stay on their land and continue growing food for their fellow Americans.”

TheCattleSite News Desk