The impact of the government shutdown is real for Reynoldsville, Pa., dairy farmer Bill Smith.
He was having problems with his local USDA Farm Service Agency long before the shutdown, but his situation has gotten worse since the shutdown began.
Smith is the fifth generation on his dairy farm, which is located along Interstate 80. He has a milking herd of 120 registered Holsteins and prides himself in showing cattle, including winners at the All-American Dairy Show in Harrisburg, Pa.
In August, when Smith realized that his Margin Protection Program payment had not arrived, he called his local Farm Service Agency office. He learned, to his dismay, that he was delinquent on his FSA loan.
“How could I be delinquent?” he said in a recent phone interview. “They take their money out of my milk check before I even get it.”
According to the records, he was delinquent, and FSA stopped his MPP payment. In March 2010, the Smith family dairy applied for and received a loan that had to be paid back over the next seven years. This helped Smith during a difficult time with low milk prices.
Fast forward to March 2018. The loan matured, and Smith did not apply for a new loan. He says FSA did not contact him to let him know that the loan was about to come due.
“I didn’t get a letter or an email or anything,” he says.
Since that time, FSA reorganized, and Smith’s file was moved to a new loan officer in another office about an hour and a half away from his farm. He says the staff in this new office has not been as responsive, which has caused him stress as he only learned in August that his loan matured in March and that he was about to lose his farm.
When he asked why FSA had not contacted him before the loan came due, Smith says he was told that the office could not show partiality by notifying him.
Situation gets worse
The question became, what did he have to do to correct the situation?
In September, a new loan officer came to his farm and helped him fill out an application and other paperwork that was needed.
A month later, Smith was asked to come to the FSA office so employees could get a better grasp of his situation.
“I called my previous (FSA) loan officer and asked what they would have done,” he says. “I was told that they would have come in March of 2017 to begin to rewrite the loan. I was told that what I had was a supervised loan that required FSA to visit the farm several times a year. That wasn’t happening.”
Thanksgiving came and went, and he still had not received any information on whether his application would be accepted. Part of the process requires the farmer to come up with a cash flow statement and projections for the coming year. Making those projections is difficult, he says, especially considering the current dairy market.
He also learned that if he accepted any more federal program money it would go straight to paying off the loan. Therefore, he couldn’t use it for any farm purposes.
Finally, on Dec. 20, the Thursday before Christmas, he got a call from the FSA loan officer. They were ready to close on the loan. But Smith was told to get an attorney so that the closing could take place.
“I lost it,” he says. “They had to be kidding. How was I going to get an attorney a few days before Christmas and get the paperwork done before the first of the year?”
Smith did call his attorney, who is also a friend, and arrangements were made to have the paperwork emailed from the FSA office to his attorney by 8 a.m. the next day.
“My attorney said that he would work on the paperwork on Friday and that my wife and I and representatives of FSA should be in the attorney’s office at 8 a.m. on Saturday,” he says.
The meeting was held, but no one from FSA showed up. Smith surmises that they didn’t show up because it was Saturday. But the federal government shutdown, the result of a disagreement between President Donald Trump and Congress on funding for a border wall, commenced at midnight on Saturday, Dec. 22.
His local FSA office was closed. Now, Smith continues to wait.
USDA recalled 2,500 Farm Service Agency employees to reopen offices during normal business hours on Thursday, Jan. 17; Friday, Jan. 18; and Tuesday, Jan. 22 to assist producers with existing farm loans and to ensure the agency provides 1099 tax documents to borrowers by the IRS deadline.
It’s unclear whether or not his office reopened.
To make matters worse, his skid-steer loader recently broke down and one of the restrictions on the loan is that he must contact FSA for any expenditure over $5,000.
“I can call, but I will get a recording that they are not there,” he says. “What am I supposed to do?”
Smith and his family were able to put all of this aside for a few days as he and his wife went to Harrisburg to see their second son, Justin, receive his Keystone Farmer Degree at the FFA Mid-Winter Convention during the Pennsylvania Farm Show.
“It is good to get away from the farm for a little while,” Smith says.
Gregg writes from western Pennsylvania.