Market News & Headlines >> USDA Operating Loan Program Funds Depleted
The federal program that provides direct operating loans and loan guarantees to farmers has already run out of cash for this fiscal year, as requests for federal financial assistance grow amid the worst agricultural downturn in more than a decade, USDA officials told Reuters News Service in an email on Monday.
It is the second straight year operating loan money has dried up before the end of the fiscal year. As a result, USDA is looking for other money sources "to help bridge the gap in farm operating loans as much as possible until additional funds are made available, either this year or in the next fiscal year," the agency said in an email. The agency declined to say what other funding it hoped to leverage for assistance.
Even with the operating loan program funding depleted, applications from farmers and bankers continue to grow. "At this time, there are already tens of millions (of dollars) in backlog in Direct and Guaranteed operating loan accounts, and that number is expected to increase through the end of the fiscal year," the Farm Service Administration said in an email on Monday.
Last month, the FSA notified Congress it was tapping into $500 million in emergency funding to bolster a related program, its $2 billion guaranteed farm ownership loan program. Such emergency funding options do not exist for the agency's operating loan programs, the agency added.