Biden’s new debt relief plan angers indebted black farmers

Washington — Some black farmers say they are disappointed by a new US agriculture debt relief programme that stands to save thousands of farmers from foreclosure, after the plan failed to specifically target minorities as they had hoped.

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

The new programme, 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 to help all farmers avoid foreclosure.

But it also scales back a Biden administration promise to specifically address systemic racism and heal the department’s strained relationship with black farmers 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 programme had hoped to continue the legal battles despite steep odds and see the economics-based programme as a failure to address the specific injuries of racism.

“It does not even approach a racial equity model that this administration and the [agriculture department] has been speaking about since the beginning of its term,” said Dãnia Davy, director of land retention and advocacy at the Federation of Southern Co-operatives, which advocates for black farmers.

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

‘It’s something’

Black farmers potentially have the most to gain from the IRA programme 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. Black farmers are overrepresented in that group. More than 31% of those behind on payments are racial minorities or multiracial, 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. The department 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 black farmers, which make up about 10% of the nation’s farmers, said the IRA programme is the best possible outcome even if it does not target race specifically.

“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 the programme will give the department “important new tools now to help distressed farmers keep farming and provide justice to those who have been discriminated against”.

Several people involved in policymaking said the IRA programme would achieve racial justice goals by keeping farmers on their land.

“For farmers, particularly black farmers, who have suffered [agriculture department] discrimination this legislation sets in motion a process to bring some justice,” said senator Cory Booker, a Democrat from New Jersey, in an email to Reuters.

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

The government has been defending the earlier debt relief programme, 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 US Supreme Court, potentially threatening other so-called race-conscious programmes such as affirmative action.

The IRA repeals the section of ARPA that laid out the race-targeted debt relief programme, 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 and agriculture departments declined to comment on their plans for the litigation.

Some black farmers who have worked for months to defend the ARPA programme 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 colour all the way to the Supreme Court.” 

Reuters