USDA suspends debt collection from farmers impacted by COVID-19
Farmers adversely impacted by the effects of the coronavirus pandemic earned a bit of a reprieve this week as the USDA announced that it is temporarily suspending debt collections, foreclosures and other activities on certain farm loans.
The action applies to distressed borrowers under the Farm Storage Facility Loan and the Direct Farm Loan programs administered by the Farm Service Agency (FSA).
Other suspensions include non-judicial foreclosures, debt offsets or wage garnishments, and referring foreclosures to the Department of Justice. The USDA adds that the agency will work with the U.S. Attorney’s Office to stop judicial foreclosures and evictions on accounts that were previously referred to the Department of Justice.
Additionally, the agency plans to halt foreclosures and evictions that are already underway, as well as debt offsets or wage garnishments. The USDA is also extending deadlines for producers to respond to loan servicing actions.
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.
Approximately 12,000 farmers, representing 10 percent of Farm Service Agency borrowers, will be eligible for this assistance.
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.
“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," said NFU President Rob Larew. "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.
Larew says that as a country, the public can't afford to see these farms go out of business.
"The agriculture industry has already experienced rapid consolidation over the last several decades, to the detriment of rural communities and national food security," he said. "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.”