In 2024, U.S. agricultural producers faced a staggering $20.3 billion in losses due to natural disasters such as floods, wildfires, and droughts, according to the American Farm Bureau Federation. These unpredictable events can be devastating for individual operations, often leaving farmers and ranchers in dire financial straits. In response to these challenges, the USDA’s Farm Service Agency (FSA) offers a variety of financial assistance programs designed to provide aid during such difficult times. This article will highlight a selection of these programs and discuss their respective eligibility requirements.
The FSA, established in 1995, consolidates several existing USDA services and serves multiple functions, including administering farm commodity programs, providing farm loans, and implementing the Conservation Resource Program. This article focuses on the financial aid offered by the FSA through its various services, which range from traditional loans to direct compensation for losses resulting from natural disasters. Understanding the eligibility requirements for these programs is the first step for agricultural producers seeking financial assistance.
One of the key programs offered by the FSA is the Emergency Loan Program (ELP). Functioning similarly to traditional bank loans, the ELP is available to producers who have suffered production and physical losses from flooding, droughts, quarantine, or other natural disasters. Applications for emergency loans must be filed with the FSA within eight months of the disaster or quarantine designation date. Producers do not need to worry about whether their specific type of disaster event qualifies; as long as they own or operate land in a county declared by the President or the Secretary of Agriculture as a disaster or quarantine area, they meet the threshold requirement. Producers can quickly determine their eligibility through the USDA’s Disaster Designation Information webpage.
To qualify for the ELP, producers must be “established family farm operators” with “sufficient farming or ranching experience.” While the FSA does not define “sufficient experience,” applicants must be U.S. citizens or permanent residents. They must also have suffered an actual loss of production below normal yields or a physical loss of livestock, livestock products, real estate, or personal property. Additionally, applicants need an “acceptable” credit history, an inability to receive credit from commercial sources, and the ability to repay the loan. All emergency loans must be fully collateralized.
Currently, producers can borrow up to 100% of their actual production or physical losses, with a maximum loan amount of $500,000. Loan terms vary depending on the losses suffered, with typical repayment periods of up to seven years for crops, livestock, and non-real estate losses. In special circumstances, repayment terms can extend up to 20 years, and in certain cases, up to 40 years. Loans for physical losses to real estate are normally repaid within 30 years.
Another crucial program is the Livestock Forage Disaster Program (LFP), which provides financial aid to producers who have suffered grazing losses due to natural disasters. Unlike the ELP, the LFP is not a loan program but instead offers monthly payments to eligible cattle producers based on FSA’s livestock payment rates. Total payments under the LFP do not exceed five monthly payments for the same kind, type, and weight range of livestock. Since 2019, no eligible producer (excluding joint ventures or general partnerships) may receive more than $125,000 in total payments from the program.
Eligibility for the LFP is contingent on several factors. Producers must determine whether their county is covered, with grazing land or pastureland needing to be located in a county designated by the U.S. Drought Monitor as having at least a severe drought. Eligible livestock includes various grazing animals such as cattle, goats, and sheep, which must have been owned, leased, purchased, or held by a contract grower during the 60 days prior to the start of an eligible drought or fire condition. The livestock must be part of a commercial farming operation and cannot be used for hunting, racing, or personal consumption.
Producers must also show that their pastureland or grazing land is physically located in a covered county or managed by a federal agency. If a producer is prohibited by a managing federal agency from grazing livestock due to a qualifying fire, they may still be eligible. Additionally, producers must provide evidence of actual loss and file an acreage report for all grazing land they are seeking assistance for. Applications must be submitted to the local FSA office by March 1 of the year following the loss.
For producers dealing with non-insurable crops who have suffered losses due to natural disasters, the FSA offers the Noninsured Crop Disaster Assistance Program (NAP). This program provides crucial support to those who do not have access to traditional crop insurance, ensuring that they can recover and continue their operations despite unforeseen challenges.