USDA-FSA Loan Deferment Program Proposal

As part of our work with the Regenerate America™ coalition (which is amplifying the voices of farmers and ranchers calling for regenerative agriculture and soil health to be a priority in the 2023 Farm Bill), Land Core has developed an FSA Loan Deferment Program that could potentially unlock hundreds of millions of dollars of investment in soil health, without costing taxpayers a cent.

While the long-term benefits of soil conservation are well-established, the upfront costs can often be prohibitive for farmers who are struggling to keep their operations afloat. Cash flow is one of the most critical issues farmers face in adopting soil health and conservation practices. Many producers take USDA-FSA loans to support regular operating costs (for FY2022, annual appropriations support $10.4 billion of new FSA direct loans and guarantees), but like all lenders, they are bound to annual repayments.

This simple adjustment would give all USDA-FSA borrowers the flexibility to use their loan payment funds to invest in conservation - by making the dollars they invest in approved soil health management systems eligible for immediate loan deferments (up to half the annual payment amount).

This proposal builds on FSA's existing discretionary authority to defer loan payments.

This is a cost neutral, win-win-win - for the producer, for conservation, and for the resilience of the FSA loan portfolio - because the de-risking soil health practices that would be funded by the loan deferments would have long term benefits for FSA.

The idea would also allow USDA to provide a scalable way of investing in conservation and agricultural resilience, without relying solely on grant programs (like EQIP and CSP), which are consistently oversubscribed and inherently tied to government funding outlays.

Through our partnership with Regenerate America, this proposal is now being championed and developed as legislation in the Senate! Stay tuned for more details and learn more in our FAQ.

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Land Core is a 501(c)3 non-profit organization advancing soil health programs and policies that create value for farmers, businesses, and communities.