Government Shutdown Harms Family Farms
Originally published on the RAFI-USA blog on October 1, 2013 .
Congressional delays will likely cost at least 1,400 farmers their farms.
This morning, as the government shuts down operations and Congressional leaders argue, 1,423 farmers are waiting for Congress to pass a budget so that they can receive USDA direct farm operating loans that have already been approved. An additional 2,161 families have deferred their dream of farm ownership as they wait for funding of approved direct farm ownership loans, and an additional 1,005 are waiting on guaranteed ownership loans. Many of these farm families have already waited months.
As the USDA and the rest of the federal government shut down operations, 1,800 of the approximately 29,000 farmers expected to receive USDA loans this year will have to wait even longer for already overworked USDA staff members to process their applications. And more farmers are applying every day.
For farmers to qualify for direct loans in the first place, they must first be turned down for loans by other banks. For many, the USDA loan is their only chance to continue farming.
When the government shuts down, so does the USDA. Thus, delays caused by the shutdown coupled with the failure to pass a budget will likely cost them their farms.
Farmers find themselves in this last-hope situation because of many factors, often not under their control. In our experience, financial situations that require lending from USDA are most frequently caused by natural disasters, such as the 197 FEMA-declared major disasters just since the beginning of 2011, or, ironically, health care costs in one of the top five most dangerous professions.
When we speak with farm families, we see firsthand the extreme stress and uncertainty that accompanies delayed loans. Extensive research shows that farm financial stress is associated with significant increases in heart disease and other stress-induced illnesses, as well as domestic violence, substance abuse, depression and suicide.
In our work, a loan delayed is as good as a loan denied. A farmer receiving his or her operating loan late can be worse than not receiving it at all, as the farmer is unable to invest in crops in a timely way. As Congress argues, this shutdown costs us farms lost and dreams deferred.
Farmers are doing their jobs. USDA did their jobs. Now Congress, by not doing their job, may be costing more than 1,400 farmers their farms, and more than 3,100 farmers their dreams of farming.
In all, more than 6,300 US farmers are waiting on Congress to get its work done before they can get back to the work of feeding our country.
About the author
Scott currently serves as Executive Director of the Rural Advancement Foundation International-USA. Scott’s specialty is financial infrastructure, including access to credit and risk management for value-added producers. He previously directed the organization’s Farm Sustainability program, providing in-depth financial counseling to farmers in crisis, education on disaster assistance programs and access to credit, and addressing the needs of mid-scale farmers who are increasing the sustainability of their farms by transitioning to higher-value specialty markets.