The U.S. Department of Agriculture announced loan interest rates for February 2023, which are effective Feb. 1. USDA’s Farm Service Agency loans provide important access to capital to help agricultural producers start or expand their farming operation, purchase equipment and storage structures or meet cash flow needs.

Operating, Ownership and Emergency Loans

FSA offers farm ownership and operating loans with favorable interest rates and terms to help eligible agricultural producers, whether multi-generational, long-time, or new to the industry, obtain financing needed to start, expand or maintain a family agricultural operation. FSA also offers emergency loans to help producers recover from production and physical losses due to drought, flooding, other natural disasters or quarantine.

For many loan options, FSA sets aside funding for underserved producers, including veterans, beginning, women, American Indian or Alaskan Native, Asian, Black or African American, Native Hawaiian or Pacific Islander, and Hispanic farmers and ranchers

Interest rates for Operating and Ownership loans for February 2023 are as follows:

• Farm Operating Loans (Direct): 4.750 percent
• Farm Ownership Loans (Direct): 4.750 percent
• Farm Ownership Loans (Direct, Joint Financing): 2.750 percent
• Farm Ownership Loans (Down Payment): 1.500 percent
• Emergency Loan (Amount of Actual Loss): 3.750 percent

FSA also offers guaranteed loans through commercial lenders at rates set by those lenders.

To access an interactive online, step-by-step guide through the farm loan process, visit the Loan Assistance Tool on farmers.gov.

Commodity and Storage Facility Loans

Additionally, FSA provides low-interest financing to producers to build or upgrade on-farm storage facilities and purchase handling equipment and loans that provide interim financing to help producers meet cash flow needs without having to sell their commodities when market prices are low.  Funds for these loans are provided through the Commodity Credit Corporation and are administered by FSA.

• Commodity Loans (less than one year disbursed): 5.750 percent
• Farm Storage Facility Loans:
  • Three-year loan terms: 4.000 percent
  • Five-year loan terms: 3.750 percent
  • Seven-year loan terms: 3.750 percent
  • Ten-year loan terms: 3.625 percent
  • Twelve-year loan terms: 3.750 percent
• Sugar Storage Facility Loans (15 years): 3.875 percent

Pandemic and Disaster Support

FSA broadened the use of the Disaster Set Aside, normally used in the wake of natural disasters, to allow farmers with USDA farm loans who are affected by COVID-19, and are determined eligible, to have their next payment set aside. Because of the pandemic’s continued impacts, producers can apply for a second DSA for COVID-19 or a second DSA for a natural disaster for producers with an initial DSA for COVID-19.

The set-aside payment’s due date is moved to the final maturity date of the loan or extended up to 12 months in the case of an annual operating loan. Any principal set-aside will continue to accrue interest until it is repaid. Use of the expanded DSA program can help to improve a borrower’s cashflow in the current production cycle.

FSA also reminds rural communities, farmers and ranchers, families and small businesses affected by the year’s winter storms, drought, hurricanes and other natural disasters that USDA has programs that provide assistance. USDA staff in the regional, state and county offices are prepared to deliver a variety of program flexibilities and other assistance to agricultural producers and impacted communities. Many programs are available without an official disaster designation, including several risk management and disaster recovery options.

Inflation Reduction Act Assistance for Distressed Producers

On Aug. 16, 2022, President Biden signed the Inflation Reduction Act into law. It is a historic, once-in-a-generation investment and opportunity for the agricultural communities that USDA serves. Section 22006 of the IRA provided $3.1 billion for USDA to provide relief for distressed borrowers with certain FSA direct and guaranteed loans and to expedite assistance for those whose agricultural operations are at financial risk. USDA has allocated up to $1.3 billion for initial steps to help these distressed borrowers. This includes both automatic and case-by-case assistance. For more information producers can contact their local USDA Service Center or visit farmers.gov/inflation-reduction-investments/assistance.

Producers can explore available options on all FSA loan options at fsa.usda.gov or by contacting their local USDA Service Center.