Litigation Over Farmer Debt Relief

OMAHA (DTN) -- As USDA is asking how the department should allocate $2.2 billion in new financial support to farmers who faced discrimination in the past, a group of Black farmers have filed their own class-action lawsuit against the federal government over the repeal of last year's USDA loan-debt relief program.

At least one class-action lawsuit has been filed by Black farmers on behalf of socially disadvantaged farmers as defined under the American Rescue Plan. John Boyd Jr., president of the National Black Farmers Association, is leading a lawsuit filed last week in the U.S. Court of Federal Claims. The lawsuit states the plaintiffs and other socially disadvantaged farmers were told their federal debts would be paid. "But the U.S. Government broke its promise and breached its contractual obligations."

USDA had sent socially disadvantaged producers letters informing them of the department's plans to pay the debts before multiple federal lawsuits led by white farmers led to an injunction blocking USDA from taking action.

The lawsuits eventually led Congress to repeal Section 1005 of the American Rescue Plan Act (ARPA) that included the debt-forgiveness provision for socially disadvantaged farmers. The initial debt relief was revoked as part of the Inflation Reduction Act, establishing the new debt-relief provisions.

CLASS-ACTION SUIT

The National Black Farmers Association leaders and others who filed suit argue the federal government "breached its contract" with socially disadvantaged farmers. The belief of debt relief led farmers to make investments they might not have otherwise done, the lawsuit stated. One of the plaintiffs in the lawsuit, Princess Williams, a farmer from Lovington, Virginia, who raises fruits and vegetables on a 73-acre farm, received a form from USDA indicating she would receive $373,154.18 in debt relief. Because of that letter, Williams invested in her farm, the lawsuit states, including planting new apple trees and replacing a heating system in her farmhouse, among other things.

Williams now "cannot afford to pay her mounting bills. She fears that she and her children will lose the farm," the lawsuit stated.

Ben Crump, one of the civil rights attorneys who filed the lawsuit, said in interview on a SiriusXM show that withdrawing the ARPA provisions was "a travesty of justice." Crump noted Black farmers are losing their farms to USDA. "I mean, the same people who just made them this promise now have their subsidiary financial institutions foreclosing on the Black farmers, and (it's) the height of hypocrisy," Crump said.

Responding to the lawsuit, Marissa Perry, a spokeswoman for USDA, said, "USDA strongly supported the ARPA Section 1005 program and was ready to make payments to direct loan borrowers. However, the $5 billion that was intended to help farmers was frozen by three nationwide injunctions that prevented USDA from getting payments out the door. The government vigorously defended this program in the courts, but because of these injunctions, the $5 billion provided in ARPA remained frozen. This litigation would likely have not been resolved for years."

Perry added that the provisions of the Inflation Reduction Act, crafted by a handful of key senators, provided $3.1 billion for distressed farmers to help with their farm debts "in new and more effective ways to help borrowers as much as possible stay on the land, stay in agriculture and maintain eligibility for future assistance."

Along with that is the $2.2 billion that will provide additional financial assistance, Perry noted. "We are moving aggressively to implement these provisions."

WHAT'S NEXT

Under the IRA, USDA will use that $2.2 billion to provide aid to farmers, ranchers or forest owners up to $500,000 who have faced discrimination in USDA programs. However, the language in the IRA also requires USDA to select non-government entities to administer those funds.

Sens. Cory Booker of New Jersey, Raphael Warnock of Georgia and Chuck Schumer of New York, all Democrats, wrote Ag Secretary Tom Vilsack in September, calling for him to quickly begin the process of picking the entities that will administer the aid.

On Thursday, USDA announced it is opening a 30-day comment period starting Friday on Section 22007 of the IRA to request information on "how USDA should design and administer the program." USDA wants to know how to use its programs to support former borrowers and identify those who experienced discrimination. USDA also wants to know how it should set up the criteria to select the outside group or groups that would administer the program.

For more information on IRA Section 22007 and to find out how to submit comments, please go to www.federalregister.gov/d/2022-22435.

USDA also will hold three listening sessions, the first of which is Oct. 20 at 11 a.m. Central. USDA listening sessions on aid to farmers who have experienced discrimination: https://www.usda.gov/….

Chris Clayton can be reached at Chris.Clayton@dtn.com

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