The Farm Credit Administration is encouraging Farm Credit System institutions to work with System borrowers who have been affected by recent natural disasters.
System institutions can alleviate the stress of borrowers affected by natural disasters in several ways:
- Extending the terms of loan repayments
- Restructuring borrowers’ debt obligations
- Easing some loan documentation or credit-extension terms for new loans to certain borrowers
“Natural disasters are among the challenges that farmers and ranchers face over which they have no control,” says Glen Smith, FCA board chairman and CEO. “But System institutions have considerable flexibility under FCA regulations to provide disaster relief. By extending loan repayments and offering other concessions, they can greatly alleviate the financial stress caused by natural disasters.” For more information, see FCA’s policy statement on disaster relief efforts by Farm Credit System institutions.
Natural disasters have affected regions across the United States in recent weeks. In the West, wildfires have taken a toll, with California and Colorado being especially hard hit. In late July, Tropical Storm Isaias wrecked havoc along the East Coast, spawning devastating tornadoes. On Aug. 10, a powerful derecho struck parts of Iowa, damaging over 10 million acres of crops, including 40 percent of the state’s corn and soybeans. Then, on Aug. 27, Hurricane Laura made landfall in Louisiana as a Category 4 storm, causing more than a dozen deaths and inflicting billions of dollars in damage in southwestern Louisiana and southeastern Texas.
“Since many weeks remain in what has been a very active hurricane season and the threat of fires remains, we encourage institutions to remember the flexibility they have to offer relief to producers affected by future adverse natural events,” says Chairman Smith.
In addition to bringing hardship to Farm Credit System borrowers, disasters like these may also impair the ability of Farm Credit institutions to comply in a timely way with regulatory reporting and publishing requirements. Institutions should contact the director of FCA’s Office of Examination if they need relief from specific regulatory or reporting requirements.
