Many Black farmers are facing foreclosures due to debt relief being tied up in lawsuits, the New York Times reports.
More than a year after President Joe Biden signed the stimulus package which allocated $4 billion of debt forgiveness for Black and other “socially disadvantaged” farmers, who have historically endured decades of discrimination from banks and the federal government, the funds still have not reached the farmers.
Brandon Smith, a fourth-generation farmer who owes about $200,000 in outstanding loans on his ranch, quickly signed and returned documents to the U.S. Department of Agriculture. Months after signing the requisite paperwork, he was shocked to receive a notice stating that the federal government intended to “accelerate” foreclosure on his 46-acre property and cattle if he did not start making payments on the loans he believed had been forgiven.
“I trusted the government that we had a deal, and down here at the end of the day, the rug gets pulled out from under me,” Smith said.
Currently, courts in Wisconsin and Florida have issued preliminary injunctions against the initiative, “siding with plaintiffs who argued that the debt relief amounted to discrimination and could therefore be illegal.” In Texas, a class-action lawsuit against the U.S.D.A. is proceeding.
Although the Biden administration has not appealed the injunctions, a spokeswoman for the Agriculture Department said they would continue to defend the program as litigation moves forward.
Last June, right before funds were set to be released, a federal judge in Florida blocked the program on the basis that it applied “strictly on racial grounds” irrespective of any other factor.
Leonard Jackson, a cattle farmer in Muskogee, Okla., also received a letter despite being told by the government that he did not need to make loan payments towards his $235,000 debt because his loan was being forgiven. Jackson, the son of a wheat and soybean farmer, had his farm equipment foreclosed on by the government years earlier.
“They said that they were paying off everybody’s loans and not to make payments and then they sent this,” Jackson said.
Since the start of the year, the Federation of Southern Cooperatives has been in contact with minority farmers who’ve been exasperated by the process. On top of that everything else, it’s become even harder for the farmers to get access to credit because of the uncertainty of the situation.
“It has definitely caused a very significant panic and a lot of distress among our members,” said Dãnia Davy, director of land retention and advocacy at the Federation of Southern Cooperatives/Land Assistance Fund.
The Agriculture Department claimed that it was required by law to send the warning letters but that the government has no plans of foreclosing on farms, citing a moratorium on such action that was enacted last year because of the pandemic.
“We want borrowers to know the bottom line is, actions such as acceleration and foreclosure remain suspended for direct loan borrowers due to the pandemic,” Kate Waters, a department spokeswoman, said. “We remain under the moratorium, and we will continue to communicate with our borrowers so they understand their rights and understand their debt servicing options.”
There are more than 2,000 minority farmers who have private loans that were guaranteed by the U.S.D. but that are not protected by the federal moratorium. Once the moratorium ends, farmers will need to resume making their payments if the debt relief program or an alternative is not in place.
John Boyd, president of the National Black Farmers Association, said that Black farmers want to see results instead of rhetoric by the government.
“We need implementation, action, and resources to farm,” Mr. Boyd said.