The Federation of Southern Co-operatives – which represents co-ops of Black and other disadvantaged farmers and ranchers in the US – has hit out at a new law which overrides plans for debt relief.
The American Rescue Package Act (ARPA), a US$1.9tn stimulus passed last year to help the US recover from the pandemic, included section 1005, which offered debt relief to 17,000 Americans, 3,100 of whom are Black. The Federation says this would mitigate “the disproportionate debt burden facing America’s farmers and ranchers of colour resulting from long-standing, race-based discrimination in agricultural lending practices, especially against Black farmers”.
But since it was passed, section 1005 has been stuck in the courts, after groups of white farmers challenged the constitutionality of the provision.
On behalf of its membership of Black farmers, the Federation intervened as a party in the debt relief litigation. Last month it filed a motion for summary justice – a request to a judge to make a decision on the established facts of the case without the need for a lengthy trial – to implement the plan.
And now it says the Inflation Reduction Act (IRA), passed by Congress this week, “threatens to render this litigation moot thereby preventing us from ever knowing how the Court would interpret this critically necessary programme”.
The Federation says there are laudable aims to the IRA, which if passed will be “an overwhelming victory in the fight for medical consumers and our environment” – but it includes “yet another broken promise to America’s Black farmers”.
As passed by the Senate, the IRA repeals ARPA Section 1005, replacing them with two programmes which the Federation says “ask Black farmers to trust in promises that have heretofore remained untrustworthy”.
It adds: “As alternatives to the ARPA debt relief program, the IRA appropriates $3.1bn for loan modifications for ‘distressed’ direct and guaranteed borrowers ‘whose agricultural operations are at financial risk and $2.2bn for ‘discrimination financial assistance’ to NGOS to provide financial assistance of up to $500K for ‘farmers, ranchers or forest landowners determined to have experienced discrimination prior to January 1, 2021’.
“Unfortunately, the Senate, does not establish priority in either programme for the 17,000 farmers and ranchers who received letters from their government promising debt relief. Thus, despite being guaranteed that no adverse action would result from nonpayment of loans promised to be forgiven, these borrowers remain imminently vulnerable to foreclosure.”
Dania Davy, director of land retention and advocacy of the Federation, said: “The IRA’s loan modification process provides an unsatisfactory alternative for the farmers promised debt relief last year.
“First, it offers loan modifications for ‘distressed’ borrowers which could be interpreted to exclude farmers who are ‘delinquent’ – including the 17,000 farmers who were told they did not need to make payments on the loans that would be forgiven under ARPA Section 1005 who now face daily threats of foreclosure.
“Further, the apparent discrimination claims process shifts the burden of addressing racial discrimination from institution to individual.”
She added that Black farmers have been let down after previous settlement processes, including the Pigford case – a class action lawsuit against the US Department of Agriculture (USDA), which alleged that it had discriminated against African-American farmers in its allocation of farm loans and assistance between 1981 and 1996. Settled in 1999 in the US District Court for the District of Columbia, the case saw nearly $1bn paid or credited to farmers, with a further $1.2bn coming from a follow-up action by Congress in 2010.
But the Federation argues in the 23 years since Pigford, “Black and other socially disadvantaged farmers across the country have continued to experience discriminatory conduct at the hands of the USDA and Farm Services Agency (FSA), including lack of outreach, lack of assistance, mistreatment, misinformation, lack of communication, arbitrary denials, unreasonable requests, delays in application processing, delays in application approval, and delays in loan disbursements”.
There are some positive signs: this year, the Federation says it has signed multiple agreements with the USDA to provide outreach and technical assistance to Black farmers, landowners and co-operatives, as part of the Biden administration’s “focus on equity and the secretary of agriculture’s commitment to transforming the USDA.”
Cornelius Blanding, executive director of the Federation, said: “The Federation has and will continue to work with USDA to ensure the government benefits it is authorised to administer are accessible to the Black farmers and landowners who heroically persist in the noble profession of feeding our communities and protecting our environment.”
But in terms of debt relief and the measures in the IRA, Davy said: “We are deeply concerned about the difficulties Black farmers will face in accessing these resources.”
Cornelius Key, member-farmer, and GA state co-ordinator for the Federation, said: “Black farmers were really counting on that debt relief and we if we don’t receive debt relief many of us will lose land, equipment and we might just lose our homes – this is a matter of survival.”
The Federation says it is “engaging our members, partners, Congress, and the administration in seeking accountability and transparency in the loan modification and discrimination claims processes outlined in the IRA.
“We remain committed to supporting and advocating for Black farmers, landowners and co-operatives and continuing to stand with the 3,100 Black farmers as well as the 17,000 farmers of colour promised debt relief last year. This new threat to debt relief promised to Black farmers and other farmers of colour is just a modern-day example of the many political compromises that, ultimately, betray the hopes of Black farmers. The Federation will continue to work to protect these farmers from losing their farms, land, and livelihoods.
Executive director Cornelius Blanding added: “Though disappointed, that we may never know how the court would have interpreted debt relief under Section 1005 and the constitutionality of targeted race-based programmes designed to achieve racial equity, we must continue the Federation’s 55-year legacy which we will commemorate at our annual meeting next week, and ensure the implementation of the programs under the IRA will not leave Black farmers out.”
US agriculture secretary Tom Vilsack said: “The provisions in the Inflation Reduction Act will give USDA important new tools now 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.
“The Biden-Harris Administration is deeply committed to upholding civil rights and advancing equity as well as to doing right by agricultural producers, especially small and mid-sized producers and those who USDA’s programs traditionally have shut out or not fully served.”
A statement from the USDA added: “The Biden-Harris Administration has been focused on ensuring the assistance we deliver goes to those who need it most, and this legislation allows USDA to continue our efforts to provide assistance to farmers most in need.
“The IRA includes new provisions that will prove to be helpful in keeping distressed farmers farming and providing assistance to farmers who have experienced discrimination in USDA’s leading programmes. One provision will provide USDA with $3.1bn for USDA to expeditiously provide relief for distressed USDA borrowers whose agricultural operations are at risk. Through this section USDA can provide loan modifications and payments to distressed borrowers with the goal of keeping farmers farming.
“It also modifies Section 1006 of ARPA to provide $2bn in assistance to provide financial assistance to farmers who have experienced discrimination in USDA lending programmes. This substantially increases funding for this purpose from the American Rescue Plan Act which provided a minimum of $50m for this purpose. ”
It adds that this means it will be able to work with borrowers to resolve unsustainable debt loads and delinquencies without taking the land or making the farmer ineligible for future assistance, and will also have designated resources and authority for addressing discrimination.
It says the programmes will meet two pressing needs: financial relief for distressed agricultural producers with operations at risk, and justice for producers who have been experienced discrimination in USDA’s loan programmes.
With regard to redress of discrimination, it said it “will work with one or more qualified nongovernmental entities to assist in the administration of this financial assistance. USDA is considering the design and process as we determine how to implement the provision.”