Farm loan delinquencies are at a nine-year high due to declining crop prices and tariffs, according to the Associated Press. Farm Service Agency loans (aka FSA loans). FSA loans are issued by the U.S. Department of Agriculture (USDA) when borrowers do not qualify with commercial financial lending institutions, and many of those government-backed loans come due on or around Jan. 1.
The AP reports that nationwide, 19.4% of FSA loans were delinquent, compared with 16.5% in Jan. 2018. The last high in delinquency rates occurred in Jan. 2011, when the rate hit 18.8%. Those rates may be higher among grain producers, who have been impacted by President Donald Trump’s trade wars that have stalled exports of corn, soybeans, and wheat.
Farm income has been down five of the six past years, and because of retaliatory tariffs resulting from President Trump’s ongoing trade war, many growers have been unable to sell their crops. In August 2018, the federal government announced a $4.7 billion bailout to farmers in the form of direct payments as a way to mitigate the ongoing blowback from Trump’s trade disputes. But some farmers said temporary payments don’t solve the longterm problem of being locked out of foreign markets including Canada and Mexico. “Producers need trade, not aid,” said some soybean growers especially hurt by trade uncertainty with China.