WASHINGTON (WENY) – A provision in the Build Back Better package recently drafted by the House of Representatives includes a provision that could provide debt relief to local farmers.
Many farmers suffered major financial losses as a result of reduced demand and supply chain disruptions caused by the pandemic.
“Before the pandemic, many of New York’s farmers and farmers across the country were deeply in debt and facing financial hardship, and the pandemic substantially worsened their financial situation,” said Senator Kirsten Gillibrand, who is also the chair of the Senate Agriculture Subcommittee on Livestock, Dairy, Poultry, Local Food Systems, and Food Safety and Security. “Thankfully, relief is on the way. The Build Back Better package will deliver transformative debt relief to farmers in New York and across the nation and will help them pay their workers, upgrade their equipment, and keep food on our tables. I am grateful for Congressman Maloney’s partnership on this important bill and look forward to working with him to pass it into law.”
According to Gillibrand, roughly 90% of New York State’s Farm Service Agency (FSA) direct loan borrowers will receive either full or partial debt relief under the legislation. Additionally, the current bill also includes provisions that say borrowers will still be eligible for additional USDA loans.
Borrowers under the following categories will be deemed “economically distressed” and receive full debt forgiveness:
- Operates a farm or ranch headquartered in a county or zip code with a poverty rate of not less than 20% or on Tribal land held in trust
- 90 days or more delinquent on an eligible farm loan as of December 31, 2020 or April 30, 2021
- Undergoing bankruptcy, foreclosure, and other financially distressed categories as of July 31, 2021
- Received a USDA disaster set asides after January 1, 2020
- Restructured eligible farm debt on or after January 1, 2020
- Restructured eligible farm debt three or more times as of July 31, 2021
- Owes more interest than principal on eligible farm debt as of July 31, 2021
All FSA direct loan borrowers who do not fall under those categories will have their debt paid off in full if the debt is at or lower than $150,000, or otherwise they will receive a $150,000 payment. That payment will be reduced by the total amount of money the borrower received from the Market Facilitation Program in 2018 and 2019 and the Coronavirus Food Assistance Program in 2020.