Farm Storage Facility Loan Borrowers Are Now Able to Defer Payment

by Tiverton 


The USDA’s Farm Service Agency (FSA) is now offering annual installment deferral options for farm storage facility loan borrowers who have experienced hardship from the pandemic or other production challenges. It’s a one-time annual installment payment deferral option with no fees or prepayment penalties for borrowers who choose this FSFL loan flexibility option.

 

Why it Matters: Farmers have experienced a devastating blow due to the pandemic, and the FSA is looking for ways to alleviate financial stress. 

 

What We Know: The FSFL installment payments will remain the same (except for the last year), and the original loan interest rate and annual payment due date will remain the same. Because the installment payment deferral is a one-year loan term extension, the final payment will be higher due to additional accrued interest.

Borrowers who are interested in exercising the one-time annual installment deferral option should contact FSA to make the request and complete the required forms.

Learn More: USDA Offers Annual Installment Deferral Option for Farm Storage Facility Loan Borrowers

While farm lending slows find the data trends from the first half of 2020

Commodity prices and closed markets aren’t the only effects of the pandemic. Farm lending has slowed and lends to a more pessimistic outlook for agricultural economic conditions. The slowdown is consistent across all types of loans, and delinquency rates on farm loans have steadily increased. 

 

Takeaway: Government lending programs likely supplemented the financing needs of some products, limited the severity of financial stress among farm borrowers, and direct aid payments may help offset declines in farm revenues in 2020.

Get the Stats: Agricultural Lending Consistently Slower

More farmers are declaring bankruptcy amidst pandemic

Despite a $7 billion injection from the Department of Agriculture to mitigate losses caused by the coronavirus pandemic, The Wall Street Journal reports that more U.S. farmers are filing for bankruptcy.

Why it Matters: Farmers are fighting for their livelihood as commodity values are plummeting, supply chains are being cut off, and markets are closing around the globe. The agricultural industry is now one of the industries hit hardest by COVID-19. 

The Facts: 

What’s Next: The Coronavirus Food Assistance Program included $16 billion in direct payments to farmers and ranchers and $3 billion in mass purchases of dairy, meat, and produce distributed through food banks.

According to the University of Missouri’s Food and Agricultural Policy Research Institute (FAPRI), the Trump administration is now expected to distribute a record $33 billion in payments to farmers this year.

Get the Full Scoop:  More Farmers Declare Bankruptcy Despite Record Levels of Federal Aid