USDA gives debt-ridden farmers $800 million to make them current on debt payments or clear tax refunds from IRS

The Agriculture Department has given about $800 million in debt relief to more than 13,000 farmers as part of a $3.1 billion appropriation in the Inflation Reduction Act, Democrats' name for the last big spending bill they passed through Congress.

Payments were made Tuesday to farmers "who were facing the loss of their operations," reports Spencer Chase of Agri-Pulse. "Ag Secretary Tom Vilsack detailed a handful of investments he said would help make about 11,000 farmers current on their loans and help some 2,100 others facing Treasury Department action to direct tax refunds to debt repayment.

“The first order of business was to keep people on the land,” Vilsack told reporters. Chase notes, "USDA has had a foreclosure moratorium in place since the earliest days of the Biden administration in January 2021. That moratorium cites the national public health emergency due to Covid-19, and lifting of that emergency could also reinstate regular debt servicing protocols by the department."

USDA plans to use about $434 million to help producers that it expects "to have tough financial times," Chase reports. "A department release identified 1,600 'complex cases' where borrowers are on the brink of bankruptcy or foreclosure and another 14,000 cases where producers could receive help to 'avoid even becoming delinquent'." The cases will be worked by local Farm Service Agency loan officers.

"Vilsack said USDA is also working on a separate program, funded through a different IRA allocation, to help borrowers who feel they have faced discrimination from USDA," Chase reports. "A previous debt forgiveness program was challenged in the courts and was repealed in the IRA."