National Farmers Union sent out a signal of alarm Monday as the group asked USDA officials to plan for increased loan and loan-guarantee applications, while also ensure USDA's Certified Agricultural Mediation Program prepare for a bigger workload as well.
In a letter to Agriculture Secretary Tom Vilsack, NFU cited USDA's August net-farm income forecast, as well as feedback from its own leaders to note "evidence of increasing financial distress for producers." NFU had received reports of farmers having difficulties obtaining operating loans, as well as "spikes in 'Hotline' calls regarding financial stress and concerns of loan repayments following the 2015 harvest."
NFU notes the August farm-income forecast projected a 36% decline in net farm income with expenses projected to drop only 0.5%. That combination "is certain to cause significant financial distress, particularly among beginning and financially leveraged producers."
NFU recommended USDA's work with state mediation programs to ensure there is enough support to handle a larger workload of credit-related mediation services. The group also wants to support expansion of the issues eligible for mediation for family farmers. "Any type of dispute or disagreement exacerbates financial distress when cash flows are tight or non-existent."
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