Marginalized Black and Native American Farmers Sue USDA Over Broken Promises for Debt Relief

From [HERE] As the U.S. Department of Agriculture sidesteps legal concerns over previously promised debt relief targeted at minority farmers in favor of broader measures, some producers have launched a new legal battle to secure the funds they believe they’re due.

Leaders of Native- and Black-led farmer organizations have filed a joint class action lawsuit on behalf of any “socially disadvantaged” farmer who filed for USDA debt relief included as part of the American Rescue Plan Act.

ARPA allocated $4 billion to marginalized producers to pay, in some cases, up to 120 percent of each farmer’s debt. Qualifying farmers received contracts that guaranteed them the money. Some farmers took those contracts or letters of guarantee to their loan institutions, certain their debts would be repaid.

In June 2021, white farmers in several states claimed the program was discriminatory and succeeded in receiving multiple federal court injunctions against the USDA. The resulting cases stymied the USDA’s efforts to issue the debt relief, just weeks before the first funds were scheduled to be paid, leaving producers who applied for the aid empty-handed.

Kara Boyd, president of the Association of American Indian Farmers. (Courtesy photo)“These farmers are facing foreclosures because they didn’t get help,” said Kara Boyd, president of the Association of American Indian Farmers, one of the groups involved in the new case. “They’re trying to stay afloat because they were promised help and now it may not get to them. In the meantime, they’re losing their farms.”

To work around the potential for protracted lawsuits, lawmakers repealed the funding as part of the Inflation Reduction Act, and replaced it with a $3.1 billion fund for “distressed borrowers” of USDA Farm Service Agency loans. The Inflation Reduction Act also included $2.2 billion for farmers who “have suffered discrimination” through USDA programs.

According to a report from the Center for Public Integrity, 33 percent Farm Service Agency direct loans to American Indians and Alaska Natives are delinquent as of this year. 

However, Boyd and other critics of the move say the broader focus of the Inflation Reduction Act funding effectively reduces the amount of money available to socially disadvantaged producers who were previously promised relief. 

The plaintiffs in the lawsuit assert that repealing the ARPA debt relief constitutes a contractual violation and damages disadvantaged farmers’ chances of receiving aid. The lawsuit aims to secure the promised 120 percent debt relief for socially disadvantaged farmers who signed contracts promising them the money.

A moratorium on farm foreclosures remains in place for loans directly offered by the USDA, but not for loans issued by other institutions that the USDA has guaranteed. That has left struggling minority farmers with the “wrong” type of loan in danger of losing everything, Boyd said. 

She recounted heard stories from marginalized producers dealing with potential foreclosures across the country. 

“Some farmers are being forced into bankruptcy, others into foreclosure or selling off land, livestock and/or equipment to make payments on loans that were paid off according to a USDA contract or letter to their guaranteed lender,” Boyd told Tribal Business News. “We have been in constant conversation with farmers from across the United States and U.S. territories trying to calm the hearts and minds of Native American, Black, Asian and other minority farmers to prevent farm foreclosures and even suicides.” [MORE]