USDA announced changes to the Farm Service Agency’s loan programs this week intended to help distressed borrowers and provide more flexibility. According to FSA administrator Zach Ducheneaux, they are the next step in the agency’s ongoing commitment to removing lending barriers preventing access to credit.

“Providing borrowers the financial freedom to increase profits, save for long-term needs and make strategic investments is the best way to ensure the nation’s farmers and ranchers can build financial equity and resilience,” Ducheneaux says.

The proposed changes are included in FSA’s Enhancing Program Access and Delivery for Farm Loans Rules. The rules establish a new low-interest installment program for distressed borrowers. Eligible applicants will be able to access flexible repayment terms. FSA is also reducing some loan securing requirements, enabling more borrowers to access credit.

Ducheneaux says the rule changes address four key objectives identified by FSA. They include providing agriculture producers financial freedom, expanding their opportunities, increasing the resilience of their operations and ensuring equitable access.

“It is our belief that profitable producers are better for everybody in the food value chain in rural America,” Ducheneaux says. “And we have the tools to ensure that those producers have more profitability on a year-to-year basis.”

American Farm Bureau Federation President Zippy Duvall says the changes follow conversations AFBF recently had with Ducheneaux about the importance of USDA loans to new and beginning producers. He applauded the FSA teams for putting forth “common-sense changes” that provide greater flexibility. Duvall hopes they will ease the stress farm families face during tough economic times.

“American Farm Bureau welcomes the concept of USDA’s changes, and we look forward to diving into the details of the rule,” Duvall says. “We will, certainly, provide feedback to the agency on what adjustments, if any, are necessary to make sure farm and ranch families can continue farming.”

The National Sustainable Agriculture Coalition also welcomed the changes, saying they will bring more saving to farmers.

“It is clear that the rule, in addition to a suite of actions from the agency in the last three years, aims to address challenges farmers experience by improving loan accessibility and flexibility to keep farmers on the land,” NSAC policy specialist Billy Hackett says. “The provisions will act together to make FSA more responsive to the needs of farmers at the beginning of a lending relationship, invest in farmers’ long-term financial health, and reduce instances of default.”

The new loan rule goes into effect on Sept. 25. FSA will accept comments on them through Oct. 7. The agency may consider additional rule changes after reviewing the feedback.