What should the term of a deferral be based on?

The term of a deferral should indeed be based on the greatest improvement over the first year cash available to service Farm Loan Program (FLP) debt. This approach ensures that the deferral period is strategically aligned with the borrower's ability to recover financially and make payments. By focusing on the cash available to service debt, the lender can assess how long the deferral should last to allow the borrower to stabilize their financial situation and ensure that they can meet their future obligations when they start making payments again. This not only makes it more likely that the borrower will handle their debts successfully but also helps the lender minimize risk and maintain the integrity of the loan.

Considering the context of the other options, selecting the shortest or longest deferral period without regard to the borrower's cash flow situation would not provide a tailored solution and could either lead to financial strain on the borrower or inadequate support. Additionally, solely relying on the request made by the borrower may not accurately reflect their current financial capabilities and broader economic influences, which are critical in determining an effective deferral term.