Analysis: Biden debt relief plan disappoints black farmers for avoiding racial compensation

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Black farmers in the US are unhappy that the targeted farm relief offered by the government doesn’t specifically mention minority communities. Photo: istock
Black farmers in the US are unhappy that the targeted farm relief offered by the government doesn’t specifically mention minority communities. Photo: istock

BUSINESS


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 minority communities, 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 release resources allowing the department of agriculture (USDA) to help farmers – including black farmers – avoid foreclosure.

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But it also scales back a Biden administration promise to specifically address systemic racism and heal the strained relationship of the USDA with black farmers by providing targeted debt relief to make amends for past discrimination that resulted in their loss of 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.

Said Dãnia Davy, director of land retention and advocacy at the Federation of Southern Cooperatives, which is in favour of black farmers: 

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.

The law allocates $3.1 billion (R53 billion) to the USDA for loan adjustments or payments for farmers who hold loans from the Farm Service Agency (FSA), a lender of last resort, and $2.2 billion for farmers who have experienced discrimination in lending practices.

‘IT’S SOMETHING’

Black farmers stand to gain the most from the IRA programme since they represent nearly a third of those behind on payments for FSA loans, according to a review of data obtained by Reuters through the Freedom of Information Act. More than 11 100 farmers were 90 or more days behind on payments to the FSA as of May 31, the data show.

Black farmers are over-represented 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.

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Past-due borrowers could eventually be at risk of foreclosure. USDA is currently enforcing a foreclosure moratorium tied to the Covid-19 coronavirus emergency declaration, which is set to expire in October – unless extended.

Given the policy, legal and economic landscapes, some groups representing black farmers, who make up about 10% of the nation’s farmers, told Reuters that the IRA programme was the best possible outcome even if it did 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 to Reuters that the programme would give the USDA:

important new tools to help distressed farmers keep farming and provide justice to those who have been discriminated against.

Several people involved in policymaking told Reuters that the IRA programme 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 Senator Cory Booker, a democrat from New Jersey.

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

AN END TO LITIGATION

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 from white farmers in Texas, who allege discrimination.

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

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The IRA repeals the section of the 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 department and USDA 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 the end of 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 and native American farmers all the way to the Supreme Court.” – Reuters


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