Debt Relief Will Be Distributed As Quickly And Cautiously As Possible, Vilsack Says
USDA will pay out up to $ 4 billion of Biden-guaranteed loan cancellation to minority farmers as quickly as possible, Agriculture Secretary Tom Vilsack said during the first-ever Agriculture Committee hearing of the House on the State of Black Farmers. Farm State Republicans have said the debt relief, intended to offset decades of racism, is itself discriminatory because white farmers are excluded.
Agriculture Committee chairman David Scott said evidence from the hearing would be used in drafting legislation to ban discriminatory policies at the USDA and improve the incomes of black farmers. “We will also have elements in this bill that will increase the number of farmers we have; that area (is) reopened, ”Scott said at the end of the four-and-a-half-hour hearing.
In 1920, blacks made up one in seven farmers. Today, they are less than 2% of American farmers, a predominantly white group. They operate smaller farms and receive significantly less agricultural subsidies than whites. In the so-called Pigford Settlement of 1999, the USDA recognized an anti-black bias in farm loans and other aid programs.
Witnesses at the House hearing described treatment ranging from a freezing silence during a visit to the local USDA office to a supervisor wielding a loaded handgun to chase a loan applicant with a University diploma. “It happened to me,” said Philip Haynie, president of the National Black Growers Council.
Congress passed debt relief for socially disadvantaged farmers, a group that includes blacks, Hispanics, Native Americans and Asians or Pacific Islanders, in a party line vote on March 10 as part of the coronavirus relief program of $ 1.9 trillion from administration. It forces the USDA to pay up to 120% of the outstanding debt on loans it has made directly to producers or indirectly by lenders through loan guarantee programs. The “Emergency Aid for Farmers of Color” also provided $ 1 billion to improve access to land, address “heir ownership” issues and provide legal aid to socially disadvantaged farmers.
“The goal is to do it as quickly, as thoughtfully and cautiously as possible,” Vilsack replied when asked how soon it would take for debt relief to come. For direct loans, “since this is a relatively straightforward and straightforward loan, we will try to get them into some sort of tiered situation as quickly as possible”.
The action on secured loans can be more complicated because a private lender is involved and because the loans are sometimes sold to another financial institution, Vilsack said. “We sent a letter today” telling lenders to suspend foreclosure on guaranteed loans to minority farmers, he said.
Depending on the size of the loan cancellation, farmers may want to divide the debt relief into more than one fiscal year to reduce tax liability, Vilsack said. Part of the debt relief, the 20% on top of the loan balance, goes to help pay taxes.
Republican Representative Austin Scott of Georgia objected that “grouping people together based on the color of their skin … it’s discriminatory.” According to the definition the USDA will use for socially disadvantaged farmers, he said, “you will pay back loans to foreign nationals but not white women.” Another Republican said that although many farmers find it difficult, loan cancellation was only available “if you are of a certain color”. A third GOP lawmaker suggested that discrimination was a problem of the past because the USDA now has programs to help young farmers, beginners and socially disadvantaged.
“We have studied the Constitution,” said Democratic Representative Alma Adams of North Carolina, defending the debt cancellation program. Additionally, she said, a 1995 Supreme Court ruling allows for race-based remedies. Adams is one of a dozen sponsors of the Maison Justice for Black Farmers Act, who would create a land grant program for black farmers, establish an independent council to investigate complaints of discrimination within the USDA, oversee the county committees elected by farmers who guide operations at local government offices. USDA and increase funding to address “heir property” issues.
The property of the heirs is land that passes from one generation to the next without clear title to the title. The Southern Co-operative Federation estimates that 60% of land owned by blacks is owned by heirs, which it calls “one of the main reasons for the loss of black land”. Without a clear title, owners can’t claim USDA programs or credits, said Cornelius Blanding, head of the co-op.
“Over the next four years, we will do everything in our power to eliminate any racism and systemic barriers that may exist in the Department of Agriculture against black farmers, socially disadvantaged farmers and those who live in still poor areas of rural America, ”Vilsack said in his opening remarks. He has a racial equity advisor, a first for the USDA, and sets up an “equity commission” to look for unfair barriers in USDA programs.
More than 95% of American farmers are white, according to USDA data. Hispanics make up 3% of farmers. Native Americans outnumber black farmers but still represent less than 2%.
To view a video of the hearing, Click here.
The written testimony of witnesses at the hearing is available here.