On October 18, the U.S. Department of Agriculture (USDA) announced $800 million in debt relief to distressed USDA farm loan borrowers. The funding is part of the $3.1 billion authorized through the Inflation Reduction Act (IRA) to aid financially distressed farmers.

USDA farm credit programs provide a crucial lifeline for farmers across the country. Because many farmers cannot access sufficient levels of credit necessary to fund their operations from traditional commercial lenders, USDA administers a series of guaranteed and direct loan programs for agricultural producers. Through these programs, the Department provides access to credit to approximately 115,000 agricultural producers. 

USDA announced that over 13,000 borrowers have already received payments through the program. Over 11,000 borrowers over 60 days behind on their direct or guaranteed loans have had their accounts brought current and their upcoming loan payment paid off. USDA also paid the next scheduled installment. USDA also cleared the debt of roughly 2,100 borrowers who have had their farms foreclosed on and remain in debt. These payments will allow farmers burdened by outstanding debts to find their financial footing and continue farming. 

Direct loan borrowers will receive an average of $52,000 in debt relief, while borrowers whose loans have been referred to the Treasury Department will receive an average of $101,000 in relief. For borrowers receiving loans through the guaranteed loan program, the average relief is $172,000. USDA has also announced that it will release another $500 million in payments for farmers at risk of bankruptcy or foreclosure in the coming months. 

Agriculture and related agribusiness remain a vital part of the U.S. economy and are a major contributor to economic activity throughout the world. To maintain the fiscal health of many counties dependent upon agriculture, NACo supports federal initiatives such as USDA’s farm credit programs that provide relief to distressed and at-risk farm operations. NACo will continue to work with federal partners to ensure that farmers can continue to access robust and affordable sources of credit. 

County officials interested in learning more about USDA’s farm loan programs can access more information through usda.gov.