California Ag Network

Tag: Inflation Reduction Act

  • April USDA Lending Rates for Ag Producers

    The U.S. Department of Agriculture (USDA) announced loan interest rates for April 2023, which are effective April 3, 2023. USDA’s Farm Service Agency (FSA) loans provide important access to capital to help agricultural producers start or expand their farming operation, purchase equipment and storage structures or meet cash flow needs.

    Operating, Ownership and Emergency Loans

    FSA offers farm ownership and operating loans with favorable interest rates and terms to help eligible agricultural producers, whether multi-generational, long-time, or new to the industry, obtain financing needed to start, expand or maintain a family agricultural operation. FSA also offers emergency loans to help producers recover from production and physical losses due to drought, flooding, other natural disasters or quarantine.  For many loan options, FSA sets aside funding for underserved producers, including veterans, beginning, women, American Indian or Alaskan Native, Asian, Black or African American, Native Hawaiian or Pacific Islander, and Hispanic farmers and ranchers.

    Interest rates for Operating and Ownership loans for April 2023 are as follows:

    FSA also offers guaranteed loans through commercial lenders at rates set by those lenders.

    To access an interactive online, step-by-step guide through the farm loan process, visit the Loan Assistance Tool on farmers.gov.

    Commodity and Storage Facility Loans

    Additionally, FSA provides low-interest financing to producers to build or upgrade on-farm storage facilities and purchase handling equipment and loans that provide interim financing to help producers meet cash flow needs without having to sell their commodities when market prices are low.  Funds for these loans are provided through the Commodity Credit Corporation (CCC) and are administered by FSA.

    Simplified Direct Loan Application

    FSA developed a new, simplified direct loan application for producers seeking a direct farm loan. The new application, reduced from 29 to 13 pages, provides improved customer experience for producers applying for loans and enables them to complete a more streamlined application. Producers now also have the option to complete an electronic fillable form or a traditional paper application for submission to their local FSA service center.

    Pandemic and Disaster Support

    FSA broadened the use of the Disaster Set-Aside (DSA), normally used in the wake of natural disasters, to allow farmers with USDA farm loans who are affected by COVID-19, and are determined eligible, to have their next payment set-aside. Because of the pandemic’s continued impacts, producers can apply for a second DSA for COVID-19 or a second DSA for a natural disaster for producers with an initial DSA for COVID-19. The set-aside payment’s due date is moved to the final maturity date of the loan or extended up to 12 months in the case of an annual operating loan. Any principal set-aside will continue to accrue interest until it is repaid. Use of the expanded DSA program can help to improve a borrower’s cashflow in the current production cycle.

    FSA also reminds rural communities, farmers and ranchers, families and small businesses affected by the year’s winter storms, drought, hurricanes and other natural disasters, that USDA has programs that provide assistance. USDA staff in the regional, state and county offices are prepared to deliver a variety of program flexibilities and other assistance to agricultural producers and impacted communities. Many programs are available without an official disaster designation, including several risk management and disaster recovery options.

    Inflation Reduction Act Assistance for Distressed Producers

    On Aug. 16, 2022, President Biden signed the Inflation Reduction Act (IRA) into law. It is a historic, once-in-a-generation investment and opportunity for the agricultural communities that USDA serves. Section 22006 of the IRA provided $3.1 billion for USDA to provide relief for distressed borrowers with certain FSA direct and guaranteed loans and to expedite assistance for those whose agricultural operations are at financial risk.  In October 2022, USDA provided approximately $800 million in initial IRA assistance to more than 11,000 delinquent direct and guaranteed borrowers and approximately 2,100 borrowers who had their farms liquidated and still had remaining debt. In April 2023, USDA intends to provide a new round of relief starting that will include approximately $123 million in automatic financial assistance for qualified direct and guaranteed borrowers. Qualifying borrowers will receive an individual letter detailing the assistance as payments are made. Eligibility for these new categories of automatic payments include:

    • Assistance to direct loan borrowers who were past due on a qualifying direct loan as of September 30, 2022, but by fewer than 60 days, and remained delinquent on that loan as of March 27, 2023.
    • Assistance to borrowers who restructured a qualifying direct loan after February 28, 2020, through primary loan servicing available through FSA.
    • Assistance to borrowers whose interest owed on their qualifying direct loan debt exceeds the principal owed (on a loan-by-loan basis)

    For more information producers can contact their local USDA Service Center or visit farmers.gov/inflation-reduction-investments/assistance.

    More Information

    Producers can explore available options on all FSA loan options at fsa.usda.gov or by contacting their local USDA Service Center.

  • USDA Addresses Western Water Challenges with $1.5 Million in CA’s Central Valley

    As part of the Biden Administration’s commitment to making Western communities more resilient to the impacts of drought and climate change, the U.S. Department of Agriculture (USDA) announced new investments and strategies to help farmers and ranchers conserve water, address climate change and build drought resilience in the West, supported in part by funding from the Inflation Reduction Act (IRA).

    The Western Water and Working Lands Framework for Conservation Action is a comprehensive, multi-state strategy under USDA’s Natural Resources Conservation Service (NRCS) to address key water and land management challenges across 17 Western States. This is the latest NRCS-issued Framework for Conservation Action, all of which provide direction, support and coordination to address resource concerns and threats across state boundaries and leverage new scientific tools to guide strategic program implementation on the ground. The Framework includes guidelines for identifying vulnerable agricultural landscapes and 13 strategies to help NRCS state leaders, water resource managers, and producers respond to priority challenges.

    Guided by this new framework, the WaterSMART Initiative will invest $25 million in three new priority areas and 37 existing priority areas, assisting communities and producers in the West.

    “Climate change is taking an enormous toll on farmers and ranchers in the West. Record breaking drought and exhausted water supplies are hurting agricultural operations and entire communities,” said NRCS Chief Terry Cosby. “WaterSMART investments are being directed where they can have the most impact, and the new Western Water and Working Lands Framework for Conservation Action lays the foundation for helping producers and communities address pressing climate challenges and build resiliency for the future. Complemented by investments from the Inflation Reduction Act, USDA is utilizing this framework and all available tools to deliver assistance that the severity of the water supply challenges in the West demand.”

    NRCS leveraged stakeholder feedback from a public listening session, input from the field and the latest scientific data to shape and inform the framework.

    NRCS Western Water and Working Lands Framework for Conservation Action

    Agricultural producers steward more than two thirds of the nation’s land resources. Water flows through these lands into reservoirs that supply communities with water. In many areas of the dry West, producers are struggling to irrigate their crops due to inadequate precipitation. Water supply in these areas is impacted by drought, increasing demand, and climate change.

    NRCS has identified six major water and working land management challenges resulting from threats to water supply in the West:

    1. Forecasting water supply.
    2. Sustaining agricultural productivity.
    3. Protecting groundwater availability.
    4. Protecting surface water availability.
    5. Managing and restoring rangelands and forestlands.
    6. Responding to disruptions from catastrophic events.

    For each of these major management challenges, opportunities exist to help individuals, entities and communities better manage water and working lands, conserve natural resources and build resilience to drought and climate change. Strategies include:

    1. Improve reliability of water supply forecasts.
    2. Improve soil moisture and irrigation water management.
    3. Improve water and nutrient management in crop fields and pastures.
    4. Modernize water infrastructure.
    5. Improve community water supply by completing watershed projects.
    6. Increase reuse of wastewater for agriculture and conservation.
    7. Prolong aquifer life.
    8. Complete managed aquifer recharge projects.
    9. Reduce surface water withdrawals.
    10. Install conservation systems that protect water quality.
    11. Restore and protect streams and wetlands.
    12. Manage and restore rangelands and forestlands.
    13. Increase resilience during disaster recovery.

    NRCS will use this framework to set comparable goals for effective program delivery and coordinate and track progress on helping individuals, entities and communities across the West address their management, conservation and resiliency needs.

    From 2020 to 2022, more than $410 million of annual conservation assistance NRCS provided to producers helped address drought in the West. Now, with the new Western Water and Working Lands Framework for Conservation Action in place, NRCS can further leverage the tools and coordination to build upon these investments and expand support by advancing innovative targeting at the state, local and regional levels, while also utilizing additional funds from the Inflation Reduction Act that advance both climate mitigation and Western water priorities.

    WaterSMART Initiative

    The $25 million investment in three new priority areas and 37 existing priority areas in the West is the result of a collaboration with NRCS and the Department of Interior’s (DOI) WaterSMART Initiative to help farmers and ranchers conserve water and build drought resilience in their communities. These investments complement projects led by irrigation districts, water suppliers and other organizations receiving WaterSMART program funds from the Department of Interior’s Bureau of Reclamation. NRCS works with the Bureau of Reclamation to coordinate investments in the same community to accelerate water conservation and drought resilience and make a bigger impact where it is most needed.

    The three new priority areas include:

    • California: Madera Irrigation District Area (Funding amount: $1.5 million)
    • Hawaii: Kohala Watershed Partnership Area (Funding amount: $345,000)
    • Washington: Quincy Columbia Basin Irrigation District West Canal Area (Funding amount: $1.8 million)

    Today’s WaterSMART announcements compliment ongoing efforts across the Biden-Harris Administration to increase water conservation and address the historic drought conditions in the West. This week, the Department of Interior Bureau of Reclamation also announced $728 million in new investments for water conservation measures in the West.

    Inflation Reduction Act and Climate-Smart Practices

    Assistance delivered through the Western Water and Working Lands Framework for Conservation Action and the WaterSMART Initiative also help build resilience to climate-change impacts such as droughts, wildfires and floods. Many of the resilience-focused activities and systems are also Climate-Smart Agriculture and Forestry mitigation activities, which support carbon sequestration or greenhouse gas emissions reductions. Climate-smart mitigation activities are supported by the additional investments available from the Inflation Reduction Act.

    The Inflation Reduction Act is supporting investments in these and other mitigation activities in concert with NRCS’s ongoing work to help producers and communities improve their operations and protect our natural resources in the face of global challenges. NRCS also announced today $850 million in fiscal year 2023 funding opportunities for producers in Western states and across the nation who want to participate in NRCS conservation programs and adopt climate-smart practices. This is part of a $19.5 billion investment through the Inflation Reduction Act for climate smart agriculture.

    More Information

    Farmers, ranchers, irrigation districts, groundwater management entities, municipalities, tribes and others across the West are working together to secure clean and available water supplies, healthy soils, resilient landscapes and thriving agricultural communities, now and in the future. NRCS is working to assist them and accelerate voluntary conservation of water and working lands resources. Visit the NRCS website for more information on the WaterSMART Initiative and to read the Western Water and Working Lands Framework for Conservation Action.