A softening in the agricultural economy and decline in commodity prices has an increasing number of farmers turning to the Farm Service Agency (FSA) to help with their credit needs and even assist to restructure or re-service loans in the countryside.
FSA administrator Val Dolcini noted that, to date, the number of FSA loans is 21% more than the same time a year ago. Each day, approximately $20-50 million of new money is being loaned out to help out those operations in need of an infusion of credit. No region or commodity is experiencing greater need, Dolcini said, noting that there is heavy activity in all of the 800 credit teams at FSA’s 2,200 offices.
He said the agency projects a 30% increase in servicing activity for the fiscal year. So far, FSA has obligated $3.5 billion since the fiscal year started on Oct. 1, 2015, and is closing in on 75% of the available loan funding appropriated by Congress for the year. He said his hope is to obligate as many loans as there is demand for and that the agency doesn’t run out of money. If funds do run out in the late summer, his team plans to approve loans and then obligate once funds become available.
Dolcini stated that FSA has many tools at its disposal and can be creative and flexible within its authority to help farmers who might be feeling the credit squeeze. “The time is now to come in and talk with their FSA office if they feel like their operation is on the verge of not penciling out,” Dolcini said. “FSA farm loan officers are there to help and can have those collaborative conversations that can result in potential restructuring. We’re there, as we’ve always been, to weather these times whether it is natural disasters or price declines.”
He added that it’s important for farmers to begin those conversations with FSA offices at an earlier enough point for restructuring or re-servicing rather than at the end. He said if a farmer feels he can’t make this month’s payment, it’s better to come in sooner rather than later, before the scenario turns into a missed payment or two.
Microloans have provided up to $50,000 for ownership or operating loans to 20,000 operations since January 2013. “It has been a wonderful game-changer for farmers all across the country,” he said. In addition, 70% of those microloans have been given to new or beginning farmers, and 50% of those are first-time FSA customers.