FSA employees face a backlog of loans | 2019-01-28


Morale was already low in the USDA Farm Service Agency (FSA) offices long before officials were put on leave at the end of December. Today, after a 35-day shutdown of the U.S. government, the longest in history, FSA employees who returned to their offices two days earlier than other government employees face a growing pile of loan requests.

Historically, January and February have been the busiest months for FSA workers. Many farmers across the country – who depend on the FSA due to lack of access to commercial loans – have yet to close their 2018 operating loans and apply for direct or guaranteed loans for 2019 so they can buy. animal feed, seeds and other agricultural inputs. . While FSA loans are only a small part of total agricultural loans, they are increasing.

According to the 2018 Agricultural Research Service report from the Congressional Research Service: Institutions and Issues, of the $ 374 billion in total agricultural debt, the FSA finances about 2.6% through direct loans and guarantees an additional 4-5% of loans. commercial. This is an increase from the $ 346 billion in total farm debt, of which 2.1% was financed by direct loans from the FSA, according to the 2016 report.

Joe Schroeder, Agricultural Advocate at FARM-AID

At the same time, FSA has had to deal with sharp downsizing due to increased demand for loans. Joe Schroeder, agriculture advocate at FARM-AID, expects demand for FSA loans to continue to grow, especially now that debt limits have increased, allowing government and banks working with the FSA to serve more borrowers as well as larger farms with both direct and secured loans.

The 2018 Farm Bill increases FSA loan guarantees to commercial lenders to $ 1.75 million from $ 1.4 million. The Farm Bill also increases the limit on direct farm property loans from $ 300,000 to $ 600,000 and increases the limit on FSA direct farm loans to $ 400,000 from $ 300,000.

Following strong demand for services during the partial reopening of the FSA offices on January 17, 18 and 22, the USDA stepped up efforts to assist farmers during the shutdown by recalling all of the more than 9,700 workers from the FSA from January 24. Three-day partial reopening of FSA offices, farmers were only allowed to cash checks and make loan repayments, but from January 24 they could also close 2018 loans and apply for loans from operation 2019.

“The number of people who don’t have access to business loans is increasing,” says Schroeder, as many farms are struggling with cash flow due to years of negative or thin margins. In August 2017, when Schroeder started working for FARM-AID, the hotline was receiving 50 to 65 calls per month. Now, he says, he gets 150 calls every month.

“There will be more people who cannot access trade credit and who will be completely dependent on the FSA,” Schroeder said. “Most FSA offices are short (of workers) anyway. Morale in the FSA offices has not been high. I don’t know what they’re going to do to get through the stack.

Scott marlow

Scott Marlow, Senior Policy Specialist for RAFI-USA

Scott Marlow, senior policy specialist at Rural Advancement Foundation International-USA (RAFI-USA), agrees with Schroeder and says his organization’s hotline has also seen an increase in the number of farmers seeking help. financial assistance and advice.

“The burden on FSA offices at the county level is already astronomical,” said Marlow. “Not everything will turn out like magic (now that FSA staff have been recalled). There will be an incredible (work) backlog. “

In April 2017, Marlow testified before the House Agriculture Committee subcommittee on commodity trading, energy and credit, about the urgent need for more staff for the FSA. “Across the country, Farm Service Agency offices are sorely understaffed. In an FSA district office in North Carolina, only three loan officers handle 280 existing loans and about 85 new loan applications in 14 counties. We understand this is not unusual across the system. “

Since then, the situation has deteriorated. For fiscal 2018, the total amount allocated to FSA salaries and expenses was reduced by $ 29 million, from $ 1.516 billion in 2017 to $ 1.487 billion. These cuts were followed in 2019 by cuts of $ 300 million in salaries and expenses to $ 1.187 billion. Additionally, FSA person-years – or full-time equivalents – were reduced from 11,519 in 2017 to 11,360 in 2018, and then to 9,230 for 2019, according to the 2019 budget.

With fewer people doing more work and the possibility of another imminent shutdown, sources expect morale among FSA staff members to continue to decline. The farmers, however, are grateful for the work of the recalled FSA employees.

When the FSA’s offices partially reopened, Minnesota farmer Katie Wilts was able to cash a check from the Market Facilitation Program, but due to the closure was unable to secure a loan from 2019 operation in time to benefit from an early discount on inputs.

“We were able to work with our local bank to find a solution, but it wasn’t ideal,” Wilts said. “The interest rate with the bank is much higher than it would have been with the FSA.” Now that the FSA offices have reopened, however, Wilts will be able to apply for a 2019 operating loan, which will allow him to pay off the higher interest business loan.

When the FSA’s offices temporarily opened, a cash-strapped North Dakota rancher drove two hours to the Mandan, ND office to get an FSA signature on a check of $ 14,000 received for the sale of open cows.

“If we hadn’t been able to cash the check, we wouldn’t have been able to buy feed for the cattle,” says the breeder. “Now we need an operating loan. The $ 14,000 doesn’t go very far with the expenses. This is definitely the critical moment.

South Dakota farmer Tyler Wagner also needed a signature on a check before he could cash it when the FSA’s offices partially reopened. Like the others, he too will apply for a 2019 operating loan now that the FSA workers have been recalled.

“I was worried that if they hadn’t reopened, I wouldn’t have been able to harvest this year’s crops,” says Wagner.

State and local FSA offices referred the questions to the USDA communications office. In an email to Agri-Pulse, a USDA spokesperson said the FSA is “currently experiencing an increase in hiring” after setting a goal of hiring 800 employees in 2018. The spokesperson also stated that processing times will vary, but “we are confident that we will process all requests within the statutory 60 day time frame.

(Story updated Jan 30 at 4:30 p.m. EST to include USDA commentary.)

For more news, visit www.Agri-Pulse.com

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