When a tornado, flood, or drought strikes, or a quarantine is imposed by the Secretary of Agriculture, or when other natural disasters occur, FSA's Emergency loan program is there to help eligible farmers and ranchers rebuild and recover from sustained losses.
The Emergency loan program is triggered when a natural disaster is designated by the Secretary of Agriculture or a natural disaster or emergency is declared by the President under the Stafford Act. These loans help producers who suffer qualifying farm related losses directly caused by the disaster in a county declared or designated as a primary disaster or quarantine area. Also, farmers located in counties that are contiguous to the declared, designated, or quarantined area may qualify for Emergency loans.
Emergency loan funds may be used to:
Restore or replace essential property
Pay all or part of production costs associated with the disaster year
Pay essential family living expenses
Reorganize the family farming operation
Refinance certain non-real estate operating debts
For production losses, a 30% reduction in a primary crop in a designated or contiguous county is required. Losses to quality, such as receiving a 30% reduced price for flood damaged crops, may be eligible for assistance, too.
In addition to the general eligibility requirements all loan applicants must meet, there are some additional criteria unique to the Emergency Loan program:
the loan applicant must be an established farmer and either the owner-operator or tenant-operator of the farm at the time of the disaster;
loan applicants must intend to continue farming;
loan applicants must get written declinations of credit from organized commercial lending institutions;
loan applications must be received by the Agency no later than 8 months after the date the disaster is declared or designated;
the loss and/or damage to the farm operation must be directly attributed to the stated reason of the disaster declaration; and
crop insurance is not required at the time of the loss but will be a requirement for the coming year in order to receive a loan.