US farm agency to require DOGE approval for some loans

US farm agency to require DOGE approval for some loans

Washington | Reuters — Farm loan employees at the U.S. Department of Agriculture’s Farm Service Agency will now need approval from billionaire Elon Musk’s Department of Government Efficiency to issue loans over $500,000, according to a memo seen by Reuters on Wednesday.

DOGE has led President Donald Trump’s effort to slash the federal workforce and cut spending. Several programs for farmers, such as for local food purchasing and climate-smart farming, have been frozen or cut in the administration’s first 100 days.

Farmers rely heavily on loans to pay for operational expenses including seeds, fertilizers and pesticides, or to buy land. The USDA typically offers loans to farmers who have trouble accessing credit through traditional lending institutions.

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The April 29 memo sent by Houston Bruck, deputy administrator for farm loan programs, said that the new policy requiring clearance from the Office of the Secretary and DOGE for some lending is in compliance with an executive order on government cost efficiency.

Under the policy, which went into effect on Wednesday, all loans and guarantees of $500,000 or more and to “formal entities” like corporations will need to be approved by the two offices, the memo said.

Direct farm loans made to farmers by the FSA have a borrowing cap of $600,000. Guaranteed farm loans, which are financed by commercial banks with FSA backing, are capped at $2.2 million (C$3.03 million).

“We recognize the potential impact that this effort may have on our customers, lending partners, and FSA staff, and are committed to ensuring minimal disruption to service delivery,” said USDA’s Farm Service Agency administrator Bill Beam in a note sent along with the memo.

USDA said such reviews do not cause undue delay and that most direct aid to individuals is exempt from the process.

“The USDA Efficiency Team reviews many loans, guarantees, and payments,” USDA said in a statement, adding that “the team does assess payments over $500k for fraud and national security concerns.”

The trade group American Bankers Association, and officials with the Farm Credit System did not immediately respond to requests for comment.

“With rising input costs and trade chaos already creating uncertainty for farmers, making it more difficult to access federal loans could mean the difference between survival and being forced to shut down,” said Democrat U.S. Senator Amy Klobuchar, the minority ranking member of the Senate’s agriculture committee. “I urge the administration to ensure the personal information of farmers is protected and that this doesn’t lead to unnecessary delays or denials for our farmers.”

The FSA services about eight to ten per cent of farms with loans, according to USDA data. In fiscal year 2023, the agency issued 22,600 farm loans worth about $4.7 billion (C$6.49 billion), according to agency data.

Source: Farmtario.com

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