USDA Issues Fact Sheet on Debt Set-Aside

December 17, 1999

USDA has issued a fact sheet on a program designed to better manage farmers' debt in disaster areas. The Farm Service Agency is authorized to consider setting aside some payments to allow the farm to continue operating.

When the county in which a borrower farms, or a contiguous county, is designated as a disaster area by the President or Secretary of Agriculture, farmers with FSA debt and who may be eligible for a debt set-aside are notified of the availability of the program. They then have eight months to apply.

Eligibility to receive program benefits includes being unable to pay all family and farm operating expenses, payments to other creditors and payments to FSA; operating a farm or ranch in the disaster area with each loan being considered having been outstanding at the time of the disaster; having acted in good faith and complied with FSA written agreements; being current or not more than one installment behind on any FSA loan. No loan to be set aside may have a remaining term of less than two years, and no loan can be accelerated.

Each payment set aside must be repaid prior to the final maturity of the note. Any principal set aside will continue to accrue interest until it is repaid.

The fact sheet is available on the Internet at