For Immediate Release
Contact: Laura Zaks
National Sustainable Agriculture Coalition
press@sustainableagriculture.net
Tel. 347.563.6408
Release: New Lending Rule Signals More Savings for Farmers
Washington, DC, August 7, 2024 – The National Sustainable Agriculture Coalition (NSAC) applauds Farm Service Agency (FSA) Administrator Zach Ducheanauex for the announcement of a new final rule: Enhancing Access and Delivery for Farm Loans.
“It is clear that the rule, in addition to a suite of actions from the agency in the last three years, aims to address challenges farmers experience by improving loan accessibility and flexibility to keep farmers on the land,” said Billy Hackett, Policy Specialist. “The provisions will act together to make FSA more responsive to the needs of farmers at the beginning of a lending relationship, invest in farmers’ long-term financial health, and reduce instances of default.”
Specifically, the final rule includes provisions that:
- Support farmers with optional business plans tailored to their farm and flexible repayment terms which include smaller interest-only payments for one year with longer loan terms;
- Lower collateral requirements from a maximum of 150 percent to 125 percent of direct loan amounts and reduce scenarios where a farmer needs to pledge their home as collateral; and
- Establish the Distressed Borrower Set-Aside Program, which will allow a borrower to defer one annual loan installment per existing loan at a reduced interest rate.
In announcing the rule, Administrator Ducheanauex remarked: “The changes in this rule signal a producer-centric approach to finance. Our tools can now be used to provide borrowers the financial freedom and flexibility to improve profitability and resilience. Allowing the borrower the opportunity and means to save for long-term needs and make strategic investments from their existing production income can help demonstrate that when the terms of finance meet the “actual needs” of the producer, everybody wins; it’s akin to giving our producers a raise.”
USDA is seeking public comments on the final rule, which goes into effect on September 25, 2024. The comment period will end on October 7.
The full text of the final rule can be found here.
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The National Sustainable Agriculture Coalition is a grassroots alliance that advocates for federal policy reform supporting the long-term social, economic, and environmental sustainability of agriculture, natural resources, and rural communities. Learn more and get involved at: https://sustainableagriculture.net
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