Contact: Jessica Manly, Communications and Digital Advocacy Director
National Young Farmers Coalition
press@youngfarmers.org, 518-643-3564 x 722
(Washington, D.C., August 8, 2024) This week, the United States Department of Agriculture (USDA) published a final rule, seeking comment on a variety of updates to the Farm Service Agency’s (FSA) Farm Loan Programs (FLP) regulations. These updates reflect the same thoughtful and creative approach this Administration and USDA has taken regarding FSA programs in recent years.
FSA has listened carefully to what farmers need from the agency, and where they are experiencing challenges and process barriers. As stated in the text of the final rule: “The COVID-19 pandemic highlighted the need for FSA to undertake a culture shift in its approach to farm loans to expand virtual opportunities and implement loan processes to improve turnaround times on financial assistance. For example, for loans overall, recent investments in online education and application platforms are making the loan process simpler to navigate virtually, and new underwriting techniques based on financial benchmarking of FSA’s portfolio are expediting the loan process.”
The Enhancing Program Access and Delivery for Farm Loans Final Rule covers implementation of the Distressed Borrower Set-Aside (DBSA) Program, which will allow distressed borrowers to defer one annual loan installment at a reduced interest rate, as well as various clarifying amendments and both non-substantial and substantial policy changes to the existing regulations. A fact sheet from the agency is available here. Some notable changes include:
- Greater repayment term flexibility designed to support a holistic and viable financial picture for farmers. This includes smaller interest-only payments and longer loan terms.
- Reducing securitization requirements from 150% to 125% of the loan amount for direct loans.
- Removing a requirement that applicants list their primary residence as additional collateral for a new loan, and committing to releasing liens on additional security collateral once the borrower has established a track record of on-time payments.
Young Farmers applauds this record of addressing the nuts and bolts challenges many young farmers face in a thoughtful and effective way. Ebonee Stevenson, Access and Accountability Organizer for the National Young Farmers Coalition, shared, “In my role at Young Farmers, I am focused every day on increasing participation in FSA loan programs among young farmers and farmers of color in particular. I do this work within the heavy context of historical and ongoing discrimination, and moving the needle on participation means building trust between this new generation of farmers and the Department, and educating producers on all the ways in which FSA can support them.” Stevenson added, “I appreciate the intentional improvements that FSA has made under this Administration, including the Application Fast Track Program and this week’s regulatory updates — especially reducing the securitization requirement and allowing greater repayment term flexibility, as these have been pain points for farmers we serve. These changes demonstrate tangible actions FSA is taking in service of its mission of ‘equitably serving all farmers, ranchers, and agricultural partners through the delivery of effective, efficient agricultural programs for all Americans.’”
Young Farmers looks forward to more closely evaluating the full text of the final rule, and we encourage farmers throughout our network to do the same and to share any comments you may have. The final rule will take effect September 25, 2024. USDA will consider any comments received by October 7, 2024. To submit comments, navigate to the www.regulations.gov and search for docket ID FSA-2023-0003. Follow the instructions for submitting comments.
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The National Young Farmers Coalition (Young Farmers) is a national grassroots network of young farmers changing policy and shifting power to equitably resource the new generation of working farmers. Visit Young Farmers on the web at www.youngfarmers.org, and on Twitter, Facebook, YouTube and Instagram.