How USDA Emergency Loans Work During Droughts

Farm Service Agency loan programs are a critical but often overlooked part of the agricultural safety net. Unlike direct payments, these are loans — money that must be repaid — but they come with below-market interest rates and flexible terms designed for farmers who can't access commercial credit after a disaster.

Emergency loan program (EM loans)

Emergency loans are available to farmers in counties declared agricultural disaster areas by the Secretary of Agriculture. Eligible applicants must demonstrate actual losses (crop, livestock, or property) caused by the qualifying disaster. EM loans can be used to restore or replace essential property, pay operating expenses for the next year's crop, and reorganize debt that became unmanageable due to the disaster.

Farm operating loans

Farm Operating Loans (OL) fund annual production costs — seed, fertilizer, fuel, equipment repairs, and living expenses during the growing season. Direct operating loans from FSA carry below-market interest rates and serve farmers who can't get commercial credit. Guaranteed loans go through commercial lenders but are backed by an FSA guarantee, making them available to higher-risk borrowers.

Farm ownership loans

Farm Ownership Loans help beginning farmers and those who can't access conventional mortgages purchase farmland or make capital improvements. These are particularly important in regions where land values have risen faster than farm incomes.

In the SubsidyLookup data

USDA loan programs appear in USASpending data as financial assistance awards, often with negative amounts when loans are repaid. SubsidyLookup includes these in the dataset. If you see a recipient with a mix of positive and negative amounts across years, the negative values typically represent loan repayments or adjustments. Search for specific recipients or browse loan program CFDA numbers to find this data.