Analysis-Biden debt relief plan disappoints Black farmers for avoiding race

[August 17, 2022]  By Leah Douglas

WASHINGTON (Reuters) - Some Black farmers say they are disappointed by a new U.S. agriculture debt relief program that stands to save thousands of farmers from foreclosure, after the plan failed to specifically target minorities as they had hoped.

The program, included in the Inflation Reduction Act (IRA) signed by U.S. President Joe Biden on Tuesday, follows an earlier debt relief program that provided aid based on race but ended in a web of litigation after white farmers sued to stop payments.

The new program, which makes farmers eligible for relief based on economic precariousness rather than race, is likely to end that litigation and free up resources allowing the Department of Agriculture (USDA) to help farmers - including those of color - avoid foreclosure.
 

But it also scales back a Biden administration promise to specifically address systemic racism and heal the USDA's strained relationship with farmers of color by providing targeted debt relief to make amends for past agency discrimination that resulted in them losing billions of dollars worth of land.

Advocates of the race-based program had hoped to continue the legal battles despite steep odds and see the economics-based program as a failure to address the specific injuries of racism.

"It does not even approach a racial equity model that this administration and the USDA has been speaking about since the beginning of its term," said Dănia Davy, director of land retention and advocacy at the Federation of Southern Cooperatives, which advocates for Black farmers.

The law allocates $3.1 billion to the USDA for loan adjustments or payments for farmers who hold loans from the agency's Farm Service Agency (FSA), a lender of last resort, and $2.2 billion for farmers who have experienced discrimination in the agency's lending practices.

'IT'S SOMETHING'

Farmers of color potentially stand the most to gain from the IRA program since they represent nearly a third of those behind on payments for FSA loans, according to a review of agency data obtained by Reuters through the Freedom of Information Act.

More than 11,100 farmers were 90 or more days behind on payments to FSA as of May 31, the data shows.

Farmers of color are overrepresented in that group. More than 31% of those behind on payments are racial minorities or multi-racial, though they make up about 16% of USDA loans distributed in 2020, 2021, and 2022, according to the data.
 

Past-due borrowers could eventually be at risk of foreclosure. USDA is currently enforcing a foreclosure moratorium tied to the coronavirus emergency declaration, which is set to expire in October unless extended.

Given the policy, legal, and economic landscape, some groups representing farmers of color, which make up about 10% of the nation's farmers, told Reuters that the IRA program is the best possible outcome even if it does not target race specifically.

A stalk of soft red winter wheat is seen against the setting sun in Dixon, Illinois, July 16, 2013. REUTERS/Jim Young/File Photo

"It's not perfect, but it's something. It's a beginning," said Toni Stanger-McLaughlin, CEO of the Native American Agriculture Fund.

Agriculture Secretary Tom Vilsack said in an email to Reuters that the program will give the USDA "important new tools now to help distressed farmers keep farming and provide justice to those that have been discriminated against."

Several people involved in policymaking told Reuters that the IRA program would achieve racial justice goals by keeping farmers on their land.

"For farmers, particularly Black farmers, who have suffered USDA discrimination this legislation sets in motion a process to bring some justice," said Sen. Cory Booker, a Democrat from New Jersey, in an email to Reuters.

Booker led the charge alongside Democratic Sen. Raphael Warnock of Georgia to include the debt relief program in the IRA.

AN END TO LITIGATION

The government has been defending the earlier debt relief program, passed in the American Rescue Plan Act (ARPA), against several lawsuits, including a class-action suit from white farmers in Texas alleging discrimination.

Legal experts have said the government is likely to lose that case, and that an appeal could send the case to the conservative-majority Supreme Court, potentially threatening other so-called race-conscious programs like affirmative action.
 

The IRA repeals the section of ARPA that laid out the race-targeted debt relief program, and the Justice Department is likely to move to dismiss the lawsuits, said three sources familiar with the litigation.

"I can't imagine that [the IRA] doesn't kill these cases," said Jessica Culpepper, a lawyer with non-profit public interest law firm Public Justice who is involved in the litigation.

The Justice Department and USDA declined to comment on their plans for the litigation.

Some Black farmers who have worked for months to defend the ARPA program still hoped they would prevail against the long odds, though, and see ending the legal fights as a failure.

"I'm very, very disappointed in this legislative action," said John Boyd, Jr., a Virginia farmer and president of the National Black Farmers Association, which is a party to the litigation in Texas, in a statement.

"I'm prepared to fight for debt relief for Black, Native American and other farmers of color all the way to the Supreme Court."

(Editing by Caroline Stauffer and Deepa Babington)

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