New proposal to Congress on debt relief for farmers with “limited resources”
Thwarted by lawsuits that argue that USDA’s debt relief for farmers of color is in fact reverse discrimination, House Democrats have offered an alternative: full or partial cancellation of loans from the United States. ‘USDA to farmers with limited resources. The multibillion-dollar proposal, which does not mention breed, is aimed at economically struggling farmers and ranchers in areas of high poverty.
It also allows payments of up to $ 500,000 each to farmers, ranchers and forest owners who have been prejudiced in USDA lending programs, as well as the allocation of funds to resolve property issues. heirs and for equity commissions to explore racial equity at the USDA and in its programs. The proposal was part of a $ 1.75 trillion social welfare and climate change program unveiled by House Democrats in concert with President Biden last week.
“Family farmers like me face serious economic challenges,” said John Boyd, president of the National Black Farmers Association. “The Build Back Better Act debt relief plan finally ensures that financial support is given to economically struggling farmers. It is long overdue and it is a historic turning point in agricultural policy.
It is estimated that $ 6 billion would be spent to support financially distressed or underserved farmers, ranchers and forest owners in high poverty areas, overcome barriers to credit and access to land, and help historically black land granting colleges, according to a tally from the President of the Senate for Agriculture. Debbie Stabenow.
“I think we will pass my Build Back Better plan and I believe we will pass the infrastructure bill,” said President Biden Sunday at the G20 meeting in Rome. “I think we’ll see by the end of next week at home that it’s over.” Parts of the package were still under debate on Sunday.
The struggling producers provisions included $ 1.02 billion for loan payments or modifications made directly to farmers by the USDA or by lenders with loan guarantees from the USDA. In executing the program, USDA would take into account whether a borrower with limited resources has received trade war or pandemic relief payments from the government. The USDA could issue payments of up to 100% of the amount owed. Alternatively, the USDA could provide payments of up to $ 150,000 each.
The assistance would be intended for borrowers in arrears of at least 90 days; live in an area with a poverty rate of over 20%; owed more in interest than in principal on the loan; were subject to bankruptcy or foreclosure; or who had restructured the loan in the past.
In March, Biden signed a $ 1.7 trillion coronavirus relief bill that included an estimated $ 4 billion USDA loan forgiveness for black, Hispanic and other farmers of color. The bill required the USDA to pay 120% of the amount owed on loans to minority farmers. The additional 20% was to cover taxes associated with debt relief, which would be counted as income when farmers paid taxes.
House Republicans said the loan cancellation plan was divisive, ill-conceived and illegally excluded white farmers who were also in financial difficulty. A swarm of lawsuits, at least one brought by a Trump-linked think tank, have stopped USDA’s action on debt relief for minority farmers. Lawyers said canceling the loan would rectify years of USDA discrimination against black farmers. The USDA has recognized racial bias in its loan programs in the so-called Pigford establishments.
In 1920, about one in six farmers was black. Today, less than 2% of American farms have black operators. Black farms are a quarter the size of the average American farm, with smaller sales, and they are mostly located in the South.
The text of the draft law on social protection and climate change, including the language on assistance to farmers in economic difficulty, is available here.
For a clause-by-clause summary of the bill, including $ 90 billion for agriculture, forestry and rural communities, Click here.
For a FERN story about the decades-long campaign by black farmers for debt cancellation, Click here.