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Debt relief will be distributed as quickly, carefully as possible, says Vilsack

The USDA will disburse up to $4 billion in Biden-backed loan forgiveness to minority farmers as speedily as possible.

The USDA will disburse up to $4 billion in Biden-backed loan forgiveness to minority farmers as speedily as possible, said Agriculture Secretary Tom Vilsack at the first-ever House Agriculture Committee hearing on the state of Black farmers. Farm state Republicans said the debt relief, intended as compensation for decades of racism, was itself discriminatory because white farmers are excluded.

Agriculture Committee chairman David Scott said material from the hearing would be used in drafting legislation to ban discriminatory policies at the USDA and improve Black farmer income. “We will also have things in this bill that will increase the number of farmers we have; that acreage (is) reopened,” said Scott at the end of the four-and-a-half-hour hearing.

In 1920, Blacks accounted for one in every seven farmers. Today they are less than 2% of U.S. farmers, an overwhelmingly white group. They operate smaller farms and receive markedly less in farm subsidies than whites. In the so-called Pigford settlement of 1999, the USDA acknowledged bias against Blacks in farm loans and other assistance programs.

Witnesses at the House hearing described treatment that ranged from being met with icy silence when visiting the local USDA office to having a supervisor brandish a loaded handgun to drive away a loan applicant with a college degree. “This happened to me,” said Philip Haynie, chairman of the National Black Growers Council.

Congress passed debt relief for socially disadvantaged farmers, a group that includes Blacks, Hispanics, Native Americans, and Asian or Pacific Islanders, on a party-line vote March 10 as part of the administration’s $1.9 trillion coronavirus relief package. It obliges the USDA to pay up to 120% of the outstanding debt on loans it made directly to producers or indirectly by lenders through loan guarantee programs. The “emergency relief for farmers of color” also provided $1 billion to improve access to land, resolve “heirs property” issues, and provide legal aid to socially disadvantaged farmers.

“The whole purpose is to do this as quickly, as thoughtfully, and carefully as possible,” replied Vilsack when asked how soon debt relief would arrive. For direct loans, “to the extent that it’s a relatively simple, straightforward loan, we’re going to try to get these in sort of a tiered-circumstance situation as quickly as possible.”

Action on guaranteed loans may be more complicated because a private lender is involved and because loans are sometimes sold to another financial institution, said Vilsack. “We sent a letter today” telling lenders to withhold any foreclosures on guaranteed loans to minority farmers, he said.

Depending on the size of the loan forgiveness, farmers may want to divide the debt relief into more than one tax year to reduce tax liability, said Vilsack. Part of the debt relief, the 20% above the loan balance, is meant to help pay taxes.

Republican Rep. Austin Scott of Georgia objected that to “group people out on the color of their skin … it’s discriminatory.” Under the definition the USDA will use for socially disadvantaged farmers, he said, “you will pay off loans for foreign nationals but not white women.” Another Republican said that although many farmers struggle, loan forgiveness was available “only if you’re a certain color.” A third GOP lawmaker suggested that discrimination was an issue of the past because the USDA now has programs to assist young, beginning, and socially disadvantaged farmers.

“We have studied the Constitution,” said Democratic Rep. Alma Adams of North Carolina, defending the debt forgiveness program. In addition, she said, a 1995 Supreme Court decision allows race-based remedies. Adams is among a dozen House sponsors of the Justice for Black Farmers Act, which would create a land grant program for Black farmers, establish an independent board to investigate complaints of discrimination within the USDA, oversee the farmer-elected county committees that guide operations at local USDA offices, and boost funding to resolve “heirs property” issues.

Heirs property is land that passes from one generation to another without clear title of ownership. The Federation of Southern Cooperatives estimates that 60% of Black-owned land is heirs property, which it calls “one of the major reasons for Black land loss.” Without a clear title, owners cannot qualify for USDA programs or credit, said Cornelius Blanding, head of the cooperative.

“We will, over the next four years, do everything we can to root out whatever systemic racism and barriers may exist at the Department of Agriculture directed to Black farmers, socially disadvantaged farmers, and people who live in persistently poor areas of rural America,” said Vilsack in his opening remarks. He has an adviser on racial equity, a first for the USDA, and is setting up an “equity commission” to look for unfair barriers in USDA programs.

More than 95% of U.S. farmers are white, according to USDA data. Hispanics are 3% of farmers. Native Americans are more numerous than Black farmers but still comprise less than 2%.

To watch a video of the hearing, click here.

The written testimony of witnesses at the hearing is available here.

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