USDA updates will increase financial freedom, resiliency and profitability for agricultural producers
On August 7, 2024, the U.S. Department of Agriculture (USDA) announced critical updates to the Farm Service Agency’s (FSA) Farm Loan Programs, effective September 25, 2024.
“As the Native Farm Bill Coalition has traveled throughout Indian Country, one of the most commonly raised barriers for Tribal producers is access to credit,” said NFBC Co-Chairs Cole Miller, Chairman of the Shakopee Mdewakanton Sioux Community, and Kari Jo Lawrence, Chief Executive Officer of the Intertribal Agriculture Council. “We applaud USDA Secretary Tom Vilsack and FSA Administrator Zach Ducheneaux and his team for not only listening to issues raised by these producers, but taking these monumental steps forward to increase access, remove barriers, provide flexibility, promote sustainability, reduce paperwork, and more. These improvements will help ensure that all producers, including those in Indian Country, can thrive on their lands, regeneratively producing food and fiber for generations to come.”
Changes to FSA’s Farm Loan Programs specifically benefiting Tribal producers include, but are not limited to:
Amending the definitions of:
“Family farm” in 7 CFR 761.2 to include commercial foraging operations for the purposes of operating loan assistance where commodities are foraged on Indian land and adds definitions for “commercially foraged,” “Indian land,” and “Indian Tribe.”
“Related by Blood or Marriage” and “Relative” in 7 CFR 761.2(b) to include additional familial relationships including: husband, wife, parent, child, brother, sister, uncle, aunt, grandparent, son, daughter, sibling, stepparent, stepson, stepdaughter, stepbrother, stepsister, half-brother, half-sister, son-in-law, daughter-in-law, father-in-law, mother-in-law, nephew, niece, cousin, grandson, granddaughter, or the spouses of any of those individuals. This will expand access to loan programs for operations owned by multiple individuals.
“Participated in the Business Operations of Farm” to clarify that owning a farm does not necessarily mean an individual has participated in the business operations of a farm (e.g., an absentee landowner, lessor, etc.). This definition relates to direct loan eligibility which currently requires certain managerial experience.
“Agricultural Commodity.”
“Feasible Plan.”
“Good Faith.”
“Youth Loan.”
Clarifying that the interest rate for the Microloan Program (ML), Operating Loan (OL) Program and Indian Tribal Land Acquisition Program (ITLAP) is equal to the existing OL rate and Farm Ownership Loan (FO) Program rate, but is not to exceed 5%.
The Distressed Borrower Set-Aside (DBSA) Program will administer a new loan servicing program for financially distressed borrowers that will allow for the deferral of one annual loan installment at a reduced interest rate. Borrowers do not have to suffer a loss from a declared disaster to qualify for DBSA.
Providing all eligible loan applicants access to flexible repayment terms which will support upfront positive cash flow that borrowers can use to increase working capital reserves and savings, including for retirement and education.
Reducing additional loan security requirements to enable borrowers to leverage equity.
Comments on the rule must be received within 60 days of being published in the Federal Register. Comments can be submitted at www.regulations.gov under docket ID FSA-2023-0003.
NFBC Resources:
To view the USDA’s Press Release, click here.
To view USDA’s updates to the Enhancing Program Access and Delivery for Farm Loans rule, click here.
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The Native Farm Bill Coalition (NFBC) brings togetherTribes, intertribal organizations, other Native organizations and non-Native allies around the country to advocate with a strong, unified voice to advance investments in Native agricultural production, ranching, nutrition programs, rural infrastructure, economic development, conservation, and forestry. The NFBC is the largest-ever coordinated effort in Indian County around federal food, agriculture and nutrition policy.
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