Inflation Reduction Act to Rewrite Relief Program for Beleaguered Black Farmers

WASHINGTON — A $4 billion program to help black farmers and other “socially disadvantaged” farmers that never got off the ground last year amid legal objections will be replaced by a plan to make relief funds available to farmers who have faced discrimination.

The changes, which are embedded in tax and climate legislation known as the Reduce Inflation Act of 2022, are provoking a backlash from farmers whom the original debt relief program, part of the US Rescue Plan for $1.9 billion from 2021, was earmarked for aid. The new program is the latest twist in an 18-month span that has underscored the challenges the Biden administration faces in making racial equity a centerpiece of its economic agenda.

Black farmers have been in limbo for months, not knowing if they will get the debt relief they were promised. Many invested in new equipment after applying for money last year to help pay off debt. Some received foreclosure notices from the Department of Agriculture this year as the program languished.

The legislation, which passed the Senate this week and is expected to pass the House on Friday, would create two new funds to help farmers. One, at $2.2 billion, would provide financial assistance to farmers, ranchers and forest landowners who faced discrimination before 2021. The other would provide $3.1 billion for the Department of Agriculture to make loan payments or loan modifications to farmers facing financial hardship. .

The money would replace the $4 billion program that was intended to help some 15,000 farmers who received loans from the federal government or had bank loans guaranteed by the Department of Agriculture. They included farmers and ranchers who had been subject to racial or ethnic bias, including those who are Black, American Indian/Alaska Native, Asian American, Pacific Islander, or Hispanic.

Last year’s pandemic relief package included an additional $1 billion to reach farmers and ranchers of color and improve their access to land.

White farmers and groups representing them questioned whether the government could base debt relief on race, saying the law discriminated against them. The program was frozen as the lawsuits progressed through the courts.

The program also faced resistance from banks, which argued that their profits would suffer if the loans they had made to farmers were suddenly paid off.

Fearful the program would be blocked entirely, Democrats rewrote the law to remove race from eligibility requirements. It’s unclear how discrimination will be defined, and the legislation appears to give the Agriculture Department broad discretion to distribute the money as it sees fit.

Groups representing black farmers, who have faced decades of discrimination from banks and the federal government, are disappointed that the money is no longer reserved specifically for them.

President Biden “went back on his commitment to help black farmers,” said John Boyd, president of the National Black Farmers Association.

Comparing the situation to the broken promise in the 19th century that former slaves would receive 40 acres and a mule, Boyd added: “Justice does not come in alphabetical order in this country. Black is always last.

A class action lawsuit brought by white farmers’ groups against the Department of Agriculture has been taking place in Texas this year, and organizations representing black farmers have expressed dismay that the new measure Democrats are about to pass nearly waives a legal battle over whether the government can address America’s legacy of racism through legislation.

“It is unfortunate that the administration has led with racial equity as a big focus and, at the first sign of litigation issues, turned their backs on how difficult racial equity work actually is to achieve,” said Dãnia Davy, the director of land retention and promotion at the Federation of Southern Cooperatives/Land Assistance Fund.

Ms Davy said her organization had been blindsided by the new legislation after months of discussions with lawmakers and the Biden administration on how to help black farmers.

Democrats and the Biden administration hailed the legislation as progress.

Senator Cory Booker of New Jersey said on Twitter this week“I am proud that the Reducing Inflation Act contains more than $5 billion that will allow thousands of struggling small farmers to stay on their land and provide financial assistance to Black farmers and others who have suffered USDA discrimination.” .

Tom Vilsack, the agriculture secretary, said in a statement that the new law would give his agency tools to help struggling farmers and provide justice to those who suffered discrimination.

“The Biden-Harris administration is deeply committed to upholding civil rights and advancing equity,” Mr. Vilsack said, “as well as doing the right thing by agricultural producers, especially small and medium-sized producers. and those whom USDA programs have traditionally excluded or not. fully served.”

The Department of Agriculture plans to work with non-governmental agencies to develop the design and process for its part of the program. Among the most challenging tasks will be determining how to define “discrimination” and therefore eligibility.

Gene Sperling, who oversees the Biden administration’s pandemic relief programs, said it was good news that the money was soon reaching farmers in need.

“Anyone with a sober and realistic view of how things stood,” Sperling said in a statement, “must recognize that the Senate took on a virtually dire situation in which no funds were available for struggling farmers or those who were victims of discrimination and converted. in one where there is now $5 billion that can start going to tens of thousands of farmers.”

It’s unclear how quickly the money will be disbursed or whether white farmer groups that challenged the original law will fight the new programs.

Rick M. Esenberg, president and general counsel of the Wisconsin Institute for Law and Liberty, which represented white farmers in one of the initial lawsuits, said he was reviewing the new legislation.

“Generally speaking, our view is that you can’t condition government benefits on the basis of race,” Mr. Esenberg said.

America First Legal, a group led by Stephen Miller, the Trump administration’s top policy adviser, and which has represented groups of white farmers, said the revision of the legislation was an acknowledgment that the original programs were illegal.

“President Biden and his allies in Congress appear to have acknowledged that their illegal, unconstitutional and racially discriminatory program has been crushed in court by America First Legal on behalf of their clients,” said Gene Hamilton, a Trump administration attorney who works for América Primero Legal.

“The final passage of the bill in the House this week will be their public acknowledgment of their defeat,” Mr. Hamilton added, “and we will be ready to beat them in court again on whatever scheme they seek to replace it with.”

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