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House Ag chairman: Use tax code to encourage purchases from Black farmers

The legislation also would prohibit discriminatory practices at the USDA and set “strong punitive measures” for employees who violate the rules.

Black farmers “don’t have access to the same markets our white farmers have,” said House Agriculture chairman David Scott, but the tax code could put them on equal footing. Scott is working on legislation to offer tax incentives to processors and other companies if they buy crops and livestock from Black producers.

The legislation also would prohibit discriminatory practices at the USDA and set “strong punitive measures” on employees who violate the rules.

“We’ve got to do it bold,” said Scott, the first Black to chair the Agriculture Committee, during an online discussion of equity in agriculture on Friday. “Wrenching out those practices of discrimination, put them into the law so everybody will know we’ve answered the call of the Black farmers and people of color farmers and then … give some tax credits to those suppliers who will purchase the agricultural products from our Black farmers.”

Scott said his legislation would have broader and longer-lasting impact than a program enacted last month to retire an estimated $4 billion in USDA loans and USDA-guaranteed loans held by socially disadvantaged farmers, a group that includes Black, Hispanic, Native American, and Asian American growers. Loan forgiveness has roiled sentiment in farm country. “The USDA is now color-preferenced … part of a ‘woke’ agenda,” a Republican congressman told Agriculture Secretary Tom Vilsack during a House Appropriations subcommittee hearing on April 14. Advocates say decades of systemic racism drove almost all Blacks out of farming.

Vilsack has told lawmakers that an “equity commission” will review the fairness of USDA programs. The “Justice for Black Farmers” bill, filed in the House and Senate, would create an independent board to oversee complaints of discrimination, provide funding to resolve the “heirs property” issue and create a land grant program aiding up to 20,000 Black farmers annually through 2030.

The federal government employs a variety of methods to assist various groups and purposes. Affirmative action laws call on employers to assure all qualified applicants are given an equal opportunity in hiring and advancement as a remedy against past discrimination. Military veterans are entitled to preference over other applicants for federal jobs. There are myriad tax incentives, including credits, deductions, and advantageous rates and exemptions, for a welter of purposes that include charitable donations, energy-efficient homes, IRAs, and fuel production.

Scott said he and Chairman Richard Neal of the House Ways and Means Committee were working on tax incentives to strengthen the financial footing of Black farmers by encouraging purchases of their products. “They don’t have access to the same markets that our white farmers have,” said Scott. “So we have to put in some incentives there … When you increase that market share of the African American farmer and people of color, that money stays within agriculture.” The additional income will ripple through the agricultural community, he said.

“And when they bump up and want to fight on this bill, which some of them do,” said Scott, referring to opponents, “I want to tell them that nobody, not anybody in the history of America, has paid the dues of agriculture” that Blacks have paid.

At their peak in 1920, Blacks were 17% of U.S. farmers. Now they are less than 2%. The USDA acknowledged in the so-called Pigford settlements two decades ago that it had harmed Black farmers through discriminatory practices such as denial of loans and slow handling of civil rights complaints. More recently, analysts said white farmers received 97% of the $9.2 billion in USDA pandemic payments from May through October 2020.

In her autobiography, civil rights activist Anne Moody described a form of agricultural discrimination in central Mississippi in the early 1960s. Blacks owned 40% of the land in Madison County, but “they were allowed to farm only so much of it” because cotton was the major cash crop and white farmers got most of the acreage allotments, which were USDA permissions to grow cotton. Allotments were awarded by the local USDA office. “The more I thought about it, the more it seemed that the federal government was directly or indirectly responsible for most of the discrimination, segregation, and poverty in the South.”

To watch a video of Scott and the panelists, click here.

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