The U.S. Department of Agriculture (USDA) is moving forward with its plan to provide debt relief for socially disadvantaged borrowers. USDA recently published the first notice of funding availability (NOFA) under the American Rescue Plan Act of 2021 (ARPA). The NOFA lays out guidelines of loan payments for eligible farmers and ranchers that have qualifying direct farm loans. Sections 1005 and 1006 of ARPA provide USDA with new tools to help address inequities for socially disadvantaged borrowers.
“The American Rescue Plan has made it possible for USDA to deliver historic debt relief to socially disadvantaged farmers and ranchers beginning in June,” Agriculture Secretary Tom Vilsack said in a news release. “USDA is recommitting itself to gaining the trust and confidence of America’s farmers and ranchers using a new set of tools provided in the American Rescue Plan to increase opportunity, advance equity and address systemic discrimination in USDA programs.”
USDA is expecting payments to eligible farmers and ranchers to begin in early June and continue on a rolling basis. Section 1005 of ARPA authorizes USDA to pay up to 120 percent of direct and guaranteed loan outstanding balances as of January 1 of this year. Qualifying loans covered under the debt relief action include certain direct loans under the Farm Loan Programs and Farm Storage Facility Loan Program. Section 1006 of ARPA provides funding directed at working to provide equity within USDA. The agency will initially be making approximately 13,000 debt relief payments to minority farmers.
“For Black and minority farmers, the American Rescue Plan could represent one of the most significant pieces of civil rights legislation in decades,” said Vilsack. “That’s because deep within the law is a provision that responds to decades of systemic discrimination perpetrated against farmers and ranchers of color by the U.S. Department of Agriculture.”
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