Senators propose loan forgiveness for small farmers
The Agriculture Department would offer small farmers one-time loan forgiveness of up to $250,000 under legislation announced by five Democratic senators on Thursday. Lead sponsor Sen. Kirsten Gillibrand said she would try to include debt relief in the upcoming infrastructure bill “to make certain our farmers are not left behind.”
The proposal comes three months after Congress approved $4 billion to pay off money owed by socially disadvantaged farmers on loans made directly by the USDA or through banks with USDA loan guarantees. One of the cosponsors of the new debt relief bill, Sen. Cory Booker of New Jersey, was a leader in the push for loan forgiveness for minority farmers. Some white farmers have filed suit against that program, saying it is unconstitutional.
“While Congress has passed many laws since the beginning of the pandemic to aid our nation’s farmers, they simply did not go far enough to sustain small farmers through this difficult time,” said Gillibrand, of New York. She introduced a similar bill last year.
Roughly 40,000 farmers would meet the criteria of an average adjusted gross income of less than $300,000 a year and holding a USDA loan. If all of them received the maximum relief of $250,000, the program would cost $10 billion. The debt relief would be nontaxable. Farmers would have one year to apply for forgiveness and would be obliged to stay in agriculture for two years if they receive relief.
Besides Gillibrand and Booker, sponsors of the bill are Sens. Bernie Sanders of Vermont, Jeff Merkley of Oregon, and Ron Wyden of Oregon.
A summary of the bill is available here.
To read the text of the bill, click here.