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Increased calls for debt and loan relief for US farmers as coronavirus spreads

19 March 2020

US livestock producers and the American Farm Bureau Federation are urging the USDA to allow deferments or adjustments on government loans as the coronavirus hits the reeling farm economy.

According to reporting from Reuters, the American Farm Bureau Federation’s request was made in a letter on 17 March. The letter outlined a range of concerns, from access to farm labour to supply chain worries of the virus. Many other sectors of the US economy have sought government relief.

"For many livestock producers, (USDA) Farm Service Agency loan payments are due now," Farm Bureau President Zippy Duvall said in the letter. "Can USDA consider temporary relief (such as deferment or loan adjustment) to help producers respond to the impact the pandemic is having on normal marketing and prices?"

A cattle industry group also asked Secretary Perdue for a coronavirus bailout, using the same pool of funds the Trump administration tapped for nearly $30 billion in aid related to the US-China trade war.

"In short, funds and programmes are needed to ensure that cattle producers and feeders that are experiencing excessive price losses are provided immediate relief," according to the United States Cattlemen's Association's letter to Perdue, dated 16 March, which was also sent to members of Congress.

April live cattle futures have dropped 12 percent this month on the Chicago Mercantile Exchange and are down 25 percent since the start of the year.

Efforts to secure debt assistance for farmers have been growing this week, as the fast-spreading virus triggers emergency lockdowns and cash injections unseen since World War Two.

Late Monday, the Farm Credit Administration (FCA) said lenders in the government-sponsored Farm Credit System (FCS) should begin working with agricultural borrowers, including possibly restructuring debt obligations, for those whose operations are being affected by the coronavirus.

Lenders can extend loan repayment terms or ease new loan documentation terms for certain borrowers, Glen Smith, board chairman of the nation's regulator for the Farm Credit lenders, said in a statement.

System regulations give lenders "considerable flexibility to provide relief to borrowers affected by COVID-19" and the coronavirus outbreak, Smith said.

The FCS system is a leading source of financing for US farmers and accounted for more than 36 percent of the nearly $402 billion in US farm debt as of 2018, according to the most current USDA data.

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