The Agriculture Department will offer small farmers a one-time forgiveness loan of up to $ 250,000, in line with legislation announced by five Democratic senators on Thursday. Main sponsor Sep. Kirsten Gillibrand said she will try to include debt relief in the upcoming infrastructure bill “so our farmers are not left behind.”
The proposal came three months after Congress approved $ 4 billion to pay off the debts of disadvantaged farmers on loans provided directly by the USDA or through USDA loan-guaranteed banks. One of the co-sponsors of the new debt cancellation bill, Senator Corey Booker of New Jersey, has been a leader in the fight to write off loans to minority farmers. Some white farmers have filed lawsuits against the program, claiming that it is unconstitutional.
“While Congress has passed many laws since the start of the pandemic to help our country’s farmers, they simply did not go far enough to support small farmers during this difficult time,” said Gillibrand of New York. She introduced a similar bill last year.
Approximately 40,000 farmers will qualify for an average adjusted gross income of less than $ 300,000 per annum and have a USDA loan. If they all received the maximum assistance of $ 250,000, the program would cost $ 10 billion. Debt write-offs will not be taxed. Farmers will have one year to apply for forgiveness and will be required to stay in agriculture for two years if they receive assistance.
In addition to Gillibrand and Booker, Senator Bernie Sanders from Vermont, Jeff Merkley from Oregon and Ron Wyden from Oregon are sponsors of the bill.
Summary of the bill available here…
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