Feds promise to fund $5 billion to the farmers in the American Rescue Plan Act.
The lawsuit claims the federal government breached its contract with socially disadvantaged farmers under the American Rescue Plan Act (ARPA), which was expected to pay off U.S. Department of Agriculture (USDA) loans held by 15,000 Black, Native American, Alaskan Native, Asian American, Pacific Islander, and Hispanic and Latino farmers.
In August, Congress repealed section 1005 of ARPA which provides funding and authorization for the federal government to pay up to 120 percent of direct and guaranteed loan outstanding balances as of January 1, 2021, for socially disadvantaged farmers and ranchers, breaking the government’s promise and leaving farmers in foreclosure.
A class action lawsuit on behalf of Black farmers and other farmers of color accuse the U.S. government of breaking a promise to relieve them of debt as compensation for many decades of discriminatory lending practices that harmed mostly Black farmers.
Reuters reports that four Virginia farmers of color, represented by civil rights attorney Benjamin Crump, filed the lawsuit on Wednesday (Oct. 12) in the U.S. Court of Federal Claims.
It alleges that the government’s repeal of the debt relief program, which was race based, amounts to a breach of contract.
Crump said this situation is a repeat of the broken government promise of 40 acres and a mule more than a century ago to Black farmers. He added, “…They’ve once AGAIN broken their vow of aid w/ the repeal of section 1005 of the American Rescue Act. Black and minority farmers need their compensation NOW!”
U.S. Black farmers lost $326B worth of land in 20th century
Black farmers in the United States lost roughly $326 billion worth of acreage during the 20th century, according to the first study to quantify the present-day value of that loss.
“Wealth and land is one way in this country that you’re able to grow opportunity for your family,” said Dr. Dania Francis, professor of economics at the University of Massachusetts-Boston.
“When huge groups of African Americans were denied that opportunity, it speaks to the inter-generational wealth gap that opened up in part due to this type of land loss,” Francis added.
The land loss was due to discriminatory USDA lending policies and forced sales of co-owned land called heirs’ property, among other factors, the study said.
The study calculated the compounded value of declining acreage owned by African Americans between 1920 and 1997 in the 17 states where almost all Black-owned farms were documented, using data from the USDA Census of Agriculture. – This article was first published by Reuters.
Inflation Adjustment Act Tweaks Black Farmer Aid
The Inflation Reduction Act, which President Joe Biden is set to sign, kills an unusually generous $4 billion program designed to forgive certain USDA loans for farmers who are Black or of another racial minority.
The program, created in last year’s American Rescue Plan, quickly faced legal challenges from white farmers who said it was unfair to them. A federal judge froze the aid with a preliminary injunction — an indication that the program’s critics would likely prevail.
According to the Penn State Center for Agricultural and Shale Law, federal programs that treat people differently based on race must clear a high bar.
Such programs must be carefully targeted in response to specific episodes of intentional discrimination by the government. Democrats based the loan forgiveness on statistics that merely showed disparate outcomes, which do not suffice in court.
The Inflation Reduction Act responds by swapping the loan forgiveness for financial assistance to farmers determined to have experienced discrimination before 2021 in USDA lending programs.
At $2.2 billion, the program is cheaper than the loan forgiveness, and payments are capped at $500,000 per recipient.
Though the new program may have better legal grounding than its predecessors, the episode has frustrated farmers who briefly thought they would have their loans paid off.
“That’s a broken promise and a broken contract between the U.S. government and Black farmers,” John Boyd Jr., president of the National Black Farmers Association, told CBS MoneyWatch.
American Dream Reachable ?
