USDA will work to modify loans
USDA officials are going to hold conference calls with major agricultural lenders this week, asking those banks and Farm Credit institutions to give struggling farmers more latitude in paying loans.
While we can’t force them to do this, we are going to jaw-bone them as best we can to explain to them it doesn’t do them any good to lose a customer,” Secretary of Agriculture Tom Vilsack told a farm crowd last Wednesday at the Iowa State Fair. “They need to figure out ways in which they can restructure these loans, delay payments, defer payments, forgive part of the principal, reduce the interest” to allow farmers who can make it to cash flow until prices return.
Vilsack’s rural tour visit to his home state of Iowa was set up by state officials stressing the economic crises facing both dairy and pork producers. State officials said they appreciate the work USDA has done so far to help producers, but also said they hope more can be done, especially for the state’s pork industry. Iowa leads the nation in pork production.
“There is no question American pork producers need relief,” said Lt. Gov. Patty Judge. She said pork producers appreciate the $62 million spent earlier this year on pork products, “But we also know, however, that more is needed.” Iowa Gov. Chet Culver and eight other governors wrote Vilsack earlier this month looking for more aid for the pork industry.
The National Pork Producers Council also pushed earlier last week for USDA to spend more money buying pork products. Vilsack told the crowd that the $1 billion fund he is given annually for such commodity purchases is running dry until October.
“We’re going to be there to help,” Vilsack said. But he noted the struggles right now go beyond some sectors of agriculture. “The reality is the entire economy is stressed.”
Vilsack said this week’s conference call will involve banks that provide loans to farmers using USDA’s loan guarantee program. Under that program, USDA agrees to back a certain percentage of a farmer or rancher’s loan, making banks more willing to lend to the operation.
USDA announced an effort earlier this month to help struggling farmers and rural businesses cope with loan debt. The program includes encouraging banks to help farmers with terms, as well as having the Farm Service Agency and USDA’s Rural Development restructure USDA’s direct loans or ease the terms temporarily. Craig Lang, president of the Iowa Farm Bureau, commended Vilsack for the initiative.
“I think it’s unprecedented,” Lang said. “What I have heard from dairymen and from pork producers is if we can get through this, if you can help us get through this, then we will be part of that future that you are talking about,” Lang said. — DTN