Gillibrand hails major debt relief for farmers included in Build Back Better package
Press Release, U.S. Sen. Kirsten Gillibrand
WASHINGTON, D.C. – Today, U.S. Senator Kirsten Gillibrand, chair of the Senate Agriculture Subcommittee on Livestock, Dairy, Poultry, Local Food Systems, and Food Safety and Security and Congressman Sean Patrick Maloney, member of the House Agriculture Committee, announced that the Build Back Better package drafted by the House includes transformative debt relief provisions for New York farmers, many of whom suffered massive financial losses due to reduced demand and supply chain disruptions during the coronavirus pandemic.
The Build Back Better package also includes important provisions to ensure that borrowers who receive this relief will still be eligible for further USDA loans and that producers receive no tax liability.
These provisions incorporate proposals from Gillibrand and Maloney’s Relief for America’s Small Farmers Act. The impact of the debt relief provisions in the Build Back Better package will be far-reaching in New York State, with approximately 98% of New York State’s FSA direct loan borrowers receiving either full or partial debt relief under the legislation.
“Before the pandemic, many of New York’s farmers and farmers across the country were deeply in debt and facing financial hardship, and the pandemic substantially worsened their financial situation,” Gillibrand said. “Thankfully, relief is on the way. The Build Back Better package will deliver transformative debt relief to farmers in New York and across the nation and will help them pay their workers, upgrade their equipment, and keep food on our tables. I am grateful for Congressman Maloney’s partnership on this important bill and look forward to working with him to pass it into law.”
Regarding the debt relief provisions in the framework, borrowers who fall under the following categories will be deemed economically distressed and will receive full debt forgiveness:
- Operates a farm or ranch headquartered in a county or zip code with a poverty rate of not less than 20% or on Tribal land held in trust
- 90 days or more delinquent on an eligible farm loan as of December 31, 2020 or April 30, 2021
- Undergoing bankruptcy, foreclosure, and other financially distressed categories as of July 31, 2021
- Received a USDA disaster set asides after January 1, 2020
- Restructured eligible farm debt on or after January 1, 2020
- Restructured eligible farm debt three or more times as of July 31, 2021
- Owes more interest than principal on eligible farm debt as of July 31, 2021
All Farm Service Agency (FSA) direct loan borrowers who do not fall in the above categories will have their debt paid off in full if the debt is equal to or lower than $150,000, or otherwise will receive a $150,000 payment. That $150,000 payment will be reduced by the total amount of money that borrower received from the Market Facilitation Program in calendar years 2018 and 2019 and the Coronavirus Food Assistance Program in calendar year 2020.