Federal judge halts loan forgiveness program for farmers of color

A federal judge has halted a loan forgiveness program for farmers of color in response to a lawsuit alleging the program discriminates against White farmers.

U.S. District Judge William Griesbach in Milwaukee issued a temporary restraining order Thursday suspending the program for socially disadvantaged farmers and ranchers, the Milwaukee Journal Sentinel reported.

The program pays up to 120% of direct or guaranteed farm loan balances for Black, American Indian, Hispanic, Asian American or Pacific Islander farmers. President Joe Biden's administration created the loan forgiveness program as part of its $1.9 trillion COVID-19 pandemic relief plan.

"This is a big deal for us," John Boyd, Jr., president of the National Black Farmers Association, told CBS MoneyWatch in March when the federal spending package was approved. "We see this as a great opportunity to help thousands."

White farmers "ineligible to even apply"

The conservative Wisconsin Institute for Law and Liberty filed suit in April arguing White farmers aren't eligible for the program, amounting to a violation of their constitutional rights. The firm sued on behalf of 12 farmers from Wisconsin, Minnesota, South Dakota, Missouri, Iowa, Arkansas, Oregon and Kentucky.

"Were plaintiffs eligible for the loan forgiveness benefit, they would have the opportunity to make additional investments in their property, expand their farms, purchase equipment and supplies and otherwise support their families and local communities," the lawsuit said. "Because plaintiffs are ineligible to even apply for the program solely due to their race, they have been denied the equal protection of the law and therefore suffered harm."

The filing seeks a court order prohibiting the USDA from applying racial classifications when determining eligibility for loan modifications and payments under the stimulus plan. It also seeks unspecified damages.

A history of unfair treatment

Minority farmers have maintained for decades that they have been unfairly denied farm loans and other government assistance. Federal agriculture officials in 1999 and 2010 settled lawsuits from Black farmers accusing the agency of discriminating against them.

The history of discrimination against Black farmers in the U.S. goes as far back as 1920, according to Modern Farmer magazine. That year, the U.S. had close to one million Black farmers, compared with 45,000 today. Black farmers also tend to make less money and own less land than White farmers, the publication noted. And securing loans and grants has long been more difficult for Black farmers than their White counterparts, according to government reports.

Nearly all of the $9.2 billion bailout provided to farmers last year by the Trump administration went to White farmers, according to the Environmental Working Group. White farmers received $6.7 billion in Coronavirus Food Assistance Program payments, while Black farmers received $15 million and Latino farmers $100 million, according to calculations by the EWG based on U.S. Department of Agriculture data.

Spotlight on USDA lending practices

Meanwhile, some lawmakers are pushing for more transparency from the USDA as a way to root out discriminatory practices.

Representative Bobby Rush of Illinois and Senator Cory Booker of New Jersey, both Democrats, introduced legislation this week requiring the USDA to track and make public information on the race and gender of all recipients of farm assistance from the agency. The bill, called the Farm Subsidy Transparency Act, would also require disclosure of farm subsidies, farm loans, crop insurance, disaster assistance and funding through the Coronavirus Food Assistance program, as well as assistance provided through conservation and forestry programs.

"It is critically important that we bring any remaining discriminatory lending behavior at USDA to a screeching halt," Rush, who was born on a farm, said in a press release. "In order to do so, we need to shine a bright light on USDA's lending practices so that we can clearly see, understand, and address existing inequities."