Two provisions that have been quietly tucked into the newly signed Inflation Reduction Act aim to provide financial relief to farmers of color who say they have been discriminated against over the years.
The law gives the US Department of Agriculture another opportunity to remedy racial disparities within the agency in recent years. An earlier effort, passed as part of the Covid-19-related American Rescue Plan in early 2021, has been challenged in court by some White farmers who complain that the effort to remedy longstanding inequities by wiping the debt of only farmers of color was itself discriminatory.
Under the new law, farmers of all backgrounds, regardless of race, will be able to apply for discrimination relief. The USDA says the new provisions will not only help farmers in need but also provide justice to those who have faced discrimination from the agency. Several farmers of color, however, expressed concerns to CNN about whether the process will be further drawn-out and, in their view, less fair in its distribution.
“I think it’s bad policy for us here,” John Boyd Jr., a fourth-generation farmer who is founder and president of the National Black Farmers Association, told CNN. “We already had 120% debt relief for farmers and they repealed it. Now they’re using very broad language that includes White farmers and other forms of discrimination, including age. Instead of getting what we already had in place, we are competing with others now. … You can discriminate by race but can’t fix it by race.”
One provision in the new law will provide $3.1 billion for “distressed borrowers” whose farming operations are at financial risk and will aim to help them keep their farms. The second provision changes a section of the American Rescue plan that allocated funds for creation of the USDA’s Equity Commission and $1 billion to provide general assistance. It will now include $2.2 billion for a program to give “financial assistance, including the cost of any financial assistance, to farmers, ranchers, or forest landowners determined to have experienced discrimination” prior to January 1, 2021, in USDA farm lending programs.
The provision allows any farmer, of any race, to receive assistance up to $500,000 “as determined to be appropriate based on any consequences experienced from the discrimination.” It also repeals another section of the American Rescue Plan that allocated debt relief and repayments for tax liabilities and other fees associated with debt payments for socially disadvantaged farmers and ranchers – a group that includes Black and other minority farmers – that had been the subject of several lawsuits from some White farmers.
Late last year, a CNN analysis of USDA data from fiscal years 2017-2021 found that more farmers of color, especially Black and Asian farmers, had been rejected for loans while the agency approved more loans for White farmers. In fiscal year 2021, the USDA rejected direct loan applications for 42% of Black farmers and 37% of Asian farmers, a five-year high for both groups. Only 9% of White farmers were denied loans in 2021.
When CNN asked about the discrepancy, a USDA official at the time suggested the statistics could be “more of a reflection of which farmers received effective assistance through disaster, trade and pandemic assistance and which farmers did not, rather than any changes in the loan application or approval process.”
The USDA has not said when the new program will start, though a separate USDA official said the agency will move quickly to disperse the funds to address farmers’ needs. Asked how “discrimination” will be defined under the new law, the official said the term is “one of many design and process questions that USDA would have to consider in determining how to implement this provision.”
In a statement to CNN, Agriculture Secretary Tom Vilsack touted “important new tools” to “help distressed farmers keep farming and provide justice to those that have been discriminated against, further building on our commitment to using all the tools we have available to help farmers stay on their land.”
Lukewarm reception from some farmers
Lloyd Wright, a soybean farmer and former director of the Office for Civil Rights in the USDA, told CNN he believes the new program does “a number of outstanding things for Black farmers,” including providing access to financial assistance and removing the need for additional court action regarding lawsuits from White farmers. Toni Stanger-McLaughlin, CEO of the Native American Agriculture Fund and a member of the USDA’s Equity Commission, said the new law, “although not perfect, could be a lifeline for many producers that will not make it without help now” and called it a step in the right direction.
“Although blanket debt forgiveness for minorities was removed, the amount of funding that will go toward disadvantaged or producers that have experienced discrimination in the past is almost identical and more in other sections,” she said in a statement, adding that the new law is “more creative in its proposal to serve all producers.”
“It will allow a holistic approach to addressing discrimination against Native farmers and ranchers, as well as protections preventing another era of a farm financial crisis. Bottom line, something is better than nothing, and when that something starts with a B, as in billions, that’s significant,” she added.
Boyd Jr., however, told CNN he is disappointed in Democratic leadership and President Joe Biden for “backing down” from the complaints of White farmers. He is also concerned there will not be enough funds to cover all discrimination claims and said not including terms like “socially disadvantaged farmer” and “farmers of color” in the law puts Black farmers at a disadvantage.
And even if the USDA swiftly processes discrimination claims, the new provision that provides funds to help farm loan borrowers facing financial risk comes a little too late for farmers like Deydra Steans. A Texas cattle rancher who has been trying to save her family’s farming operations, Steans previously told CNN about the financial hardship her family has faced from not only mounting farms debt but also the seizure of one of their cattle ranches by the Internal Revenue Service. In April, her family filed Chapter 13 bankruptcy to prevent seizure and allow the sale of the cattle ranch to pay off more than $300,000 to the IRS, she said.
“The bankruptcy was a protection to prevent land loss. I would like to see some kind of provisions for Black farmers who have had to file bankruptcy and are dealing with sharks in collections,” Steans told CNN, adding that she will file a discrimination claim under the new program.
She said the new provisions are “a step in the right direction” but also wonders how the program will be implemented and if third-party USDA farm loans will also be considered under the new law.
Asked if bankruptcy would be considered under the new provision, a USDA official told CNN that the agency wants to keep farmers in business and on their land, adding “it seems reasonable that producers facing bankruptcy or that have restructured through bankruptcy are under consideration.”
Farmers consider new terms
It remains to be seen how current lawsuits challenging the initial remedy program under the American Rescue Plan will proceed in light of the updated program. Wen Fa, an attorney for Pacific Legal Foundation, which is representing a group of White farmers in a lawsuit against the USDA, told CNN Tuesday that they were “pleased” that the old program had been scrapped and that they were “discussing next steps in our current cases.”
Dorian Spence, a lawyer whose firm represents the Federation of Southern Cooperatives, a group of southern cooperatives that has been advocating for Black farmers in litigation brought by White farmers, said he and his clients will wait and see what the new program looks like before they judge it. But in his view, under the Inflation Reduction Act, the burden is now on Black farmers to come forward and prove discrimination.
“For Black farmers specifically, it’s a tall ask for Congress to ask that Black farmers blindly trust the same agency that is primarily responsible for most of their hardships right now,” he said. “Given this new structure that has been rolled out, we’re waiting for USDA to show us they’re willing to change their relationship with Black farmers and other farmers of color.”