WASHINGTON, D.C. – Today, U.S. Senator Peter Welch (D-Vt.), a member of the Senate Agriculture Committee, introduced the Debt Relief and Farm Credit Access Act, legislation to update USDA Direct and Guaranteed Farm Loans requirements to give farmers greater flexibility in accessing credit and help distressed borrowers restructure burdensome debt.
Senator Welch’s legislation will make USDA farm loan programs more responsive to the needs of farmers facing external shocks such as market concentration, disasters, and inflation, to help borrowers absorb losses without risking their farms. The legislation also removes outdated eligibility requirements for USDA farm loans, helping more farmers and ranchers access credit assistance.
“Vermont farmers and growers have relied on USDA farm loan programs to grow and sustain their farms for generations. Making these essential loan programs more flexible will help both new and experienced farmers access crucial financial assistance when they need it most,” said Senator Welch. “This bill improves our ability to lend a helping hand to those who work hard to feed our communities.”
In 2022, nearly 25% of small farms had an average debt of over $200,000, and the average debt of large family farms surpassed $1.8 million. In the past decade, crippling debt caused by natural disasters has led to the closure of nearly half of Vermont’s dairy farms. More recent natural disasters like the brutal back-to-back floods in 2023 and 2024 have left many Vermont farms burdened with debt and with few options for relief. As farming operations in Vermont and across the country continue to face external shocks, farmers need new ways to help absorb losses without risking their farms and livelihoods.
USDA’s Direct and Guaranteed Farm Loans are financing tools that help farmers promote, build, and sustain family farms. Direct Farm Ownership Loans are designed to help farmers start, purchase, and expand their operations, while Guaranteed Loans provide vital assistance to farmers who may not meet loan qualifications from a commercial lender. While both Direct and Guaranteed Farm Loan programs have been effective in supporting farmers, improvements can be made to boost access to these tools. Currently, arbitrary time limits and onerous experience requirements prohibit many farmers from accessing USDA loans. Additional limitations on how loans can be used and when loans can be forgiven can hinder the ability to respond to external forces like market concentration, disasters, and inflation. The Debt Relief and Farm Credit Access Act ensures farmers have the flexibility they need to access credit and restructure debt.
Learn more about the Debt Relief and Farm Credit Access Act.
Read the full text of the bill.
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