Payments in a USDA loan forgiveness program designed to help farmers of color were halted Friday after a Federal Judge issued a temporary restraining order. USDA has until Friday to respond to the court’s temporary restraining order, but has already pledged to fight the case vigorously.
The Judge in Wisconsin’s Eastern District issued the temporary restraining order in response to a lawsuit filed by the Wisconsin Institute for Law and Liberty. The group, representing 12 farmers, called the plan unconstitutional. The federal judge ordered the U.S. Department of Agriculture to stop forgiving loans on the basis of race under a novel effort included in the American Rescue Plan relief package.
The program from USDA provided $4 billion to pay off direct or guaranteed loans given to farmers of color as part of the Biden administration’s COVID-19 pandemic relief plan. Agriculture Secretary Tom Vilsack has said the funding was meant to address “the cumulative effect” of systemic racism from the Department of Agriculture. It’s designed to pay up to 120% of direct or guaranteed farm loan balances for Black, American Indian, Hispanic, Asian American or Pacific Islander farmers.
USDA told POLITICO the agency will “continue to forcefully defend our ability to carry out this act of Congress and deliver debt relief to socially disadvantaged borrowers.”
A group of 23 organizations representing Black, Hispanic, Indigenous, and Asian, and Pacific Islander family farmers issued a release regarding the Judge’s ruling. The groups said, “The underlying case, and related cases, reflect a flagrant attempt to overturn an act of Congress and the over 30 years of history of a definition that acknowledges and enables USDA to meet the urgent and particular needs of socially disadvantaged producers. During this pandemic, our producers have been unable to access the level of support and service provided to other groups of farmers and ranchers and will be further harmed by this relief being delayed.”
This isn’t the first lawsuit filed regarding USDA’s loan forgiveness plan. In April, Texas Ag Commissioner Sid Miller filed a personal lawsuit against the federal government. He said the COVID relief plan discriminates against some white farmers and ranchers because it offered targeted relief to “socially disadvantaged” farmers and ranchers, which the plan defines as people of color.
New Efforts to Address Discriminatory Lending Practices
A new proposal in Congress would identify the race of people who get farm aid. Democratic Agriculture Committee members Rep. Bobby Rush (D-Illinois) and Sen. Cory Booker (D-New Jersey) introduced the legislation. It would tackle what they said were discriminatory lending practices by USDA that disproportionately affect black farmers. The bill would require USDA to track and publicly disclose the race and gender of those who apply for farm support payments and that includes those who are rejected.
Loan Forgiveness for Small Farmers
Meanwhile, some Democratic Senators are proposing loan forgiveness for small farmers. Under their plan, USDAA would offer small farmers one-time loan forgiveness of up to $250,000 thousand dollars. Lead sponsor of the legislation is Sen. Kirsten Gillibrand (D-New York) says she would try to include debt relief in the upcoming infrastructure bill quote-"to make certain our farmers are not left behind.”
