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U.S. Farmers Of Color Were About To Get Loan Forgiveness. Now The Program Is On Hold

Handy Kennedy, founder of AgriUnity cooperative, feeds his cows on HK Farms earlier this year in Cobbtown, Ga. The AgriUnity cooperative is a group of Black farmers formed to better their chances of economic success.
Handy Kennedy, founder of AgriUnity cooperative, feeds his cows on HK Farms earlier this year in Cobbtown, Ga. The AgriUnity cooperative is a group of Black farmers formed to better their chances of economic success.

A new federal program created by the Biden administration to reverse years of economic discrimination against U.S. farmers of color has ground to a halt.

On Thursday, a federal judge in Wisconsin ordered the U.S. Department of Agriculture to stop forgiving loans on the basis of race under a novel effort included in the American Rescue Plan relief package.

The ruling was a blow to the nascent USDA program but a victory for the conservative law firm behind the case and the 12 white farmers it represents, who say they are ineligible for the debt forgiveness because of their race.

"The government has created a program that distributes government benefits based solely on the race of the farmer, and Supreme Court precedent is very clear the government can't do that without a very good reason," Luke Berg, deputy counsel with the Wisconsin Institute for Law & Liberty, told NPR.

"The government hasn't identified such a reason. It's only pointed to societal discrimination, systemic discrimination, but the courts are clear that that's not enough," he added.

The news was first reported by the Milwaukee Journal Sentinel.

U.S. District Court Judge William C. Griesbach of the Eastern District of Wisconsin, who issued the temporary restraining order, said in his opinion that Congress cannot create a program that discriminates on the basis of race and that the USDA did not provide any evidence it was attempting to correct a specific act of discrimination.

"The obvious response to a government agency that claims it continues to discriminate against farmers because of their race or national origin is to direct it to stop: it is not to direct it to intentionally discriminate against others on the basis of their race and national origin," Griesbach wrote.

A USDA spokesperson said the department will be prepared to resume the loan forgiveness program if and when the restraining order is lifted. "We respectfully disagree with this temporary order and USDA will continue to forcefully defend our ability to carry out this act of Congress and deliver debt relief to socially disadvantaged borrowers," the spokesperson said.

A history of discrimination against farmers of color

The USDA has a decades-long track record of discriminating against Black farmers and other farmers of color — a history top officials in the department now acknowledge.

"The fact is that there was discrimination in the '70s and '80s and into the '90s at USDA that made it very difficult for socially disadvantaged producers to access fully and completely the programs at USDA," Secretary of Agriculture Tom Vilsack told NPR in March.

"The result, of course, is that over a period of time, they get further and further behind," he added.

The racial division between those farmers who receive federal aid and those who don't was evident as recently as last year, according to Vilsack.

The USDA distributed tens of billions of dollars to farmers impacted by COVID-19 in 2020, but only 1% of the aid went to what the department calls "socially disadvantaged producers" — a catchall term for farmers of color.

The government's ongoing pattern of discrimination toward farmers of color has bred skepticism among some growers and ranchers, who say they remain unsure of whether the USDA will follow through on its most recent promise.

"If you go and stick your hand in a hole and a rattlesnake bites it the first time, then you go back there a second time, it bites you the second time, what do you think you are going to do the third time?" Georgia farmer Lucious Abrams said at a recent event, as NPR reported earlier this month. Abrams has been battling the USDA in court over lending discrimination.

What the Biden program does

The new debt relief program is open to farmers who are Black, Hispanic or Latino, Asian, Native American, Native Alaskan or Hawaiian, or Pacific Islander.

The federal government will pay up to 120% of the total amount eligible farmers own on Farm Service Agency (FSA) Direct and Guaranteed Farm Loans and Farm Storage Facility Loans (FSFL) as of January 1.

What it does not do is include indebted white farmers, a dozen of whom from 9 states including Wisconsin, Minnesota and South Dakota took the USDA to court over the program.

Berg acknowledged that the USDA does have a history of discriminating against Black farmers and other farmers of color. But he said that discrimination was "decades old at this point" and that Congress did not tailor the relief plan in question to the needs of current farmers.

"Instead it chose to pick certain racial groups and not others for complete loan forgiveness and entirely exclude other racial groups, and that is breathtaking in its scope and clearly unconstitutional," Berg said.

At a recent event, as NPR reported, Georgia Sen. Raphael Warnock said the skepticism Black farmers have about the program is "very understandable."

"These folks have been disappointed time and time again," he said. "That deep distrust was built over years. It didn't happen overnight. It's not going to be resolved overnight. But the best thing we can do right now is to deliver this."

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