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USDA receives 58,000 requests for discrimination assistance

Program to disburse $2.2 billion to producers who were able to demonstrate financial loss due to discriminatory lending practices.

Forrest Laws

June 13, 2024

4 Min Read
USDA Building
The Discrimination Financial Assistance Program is slated to provide $2.2 billion to producers who were able to demonstrate financial loss due to discriminatory lending practices by USDA. Art Wagner/Getty Images/iStockphoto

The USDA said it received 58,000 applications for Discrimination Financial Assistance Program payments from farmers, ranchers and forest landowners who believe they experienced discrimination in its lending programs prior to 2021.

The number of applications for the payments, which were authorized under Section 22007 of the Inflation Reduction Act of 2022, was disclosed during a Zoom meeting with DFAP cooperators. USDA later confirmed the number.

Signup for the program, which is slated to provide $2.2 billion to producers who were able to demonstrate financial loss due to discriminatory lending practices by USDA prior to 2021, ended on Jan. 17. A spokesperson for USDA said the Department plans to make payments under the program this summer.

“About 80% of the applicants never received a USDA farm loan,” said one person who has been helping USDA monitor the process. (Under the language in Section 22007, Congress required USDA to contract with outside vendors to administer the program.)

“Of the other 20% most received a direct USDA Farmers Home Administration or Farm Service Agency loan. This matches with reporting by the Federation of Southern Cooperatives, which has found that more than 80 percent of their Black farmer members were unable to get a USDA farm loan.”

DFAP signup

USDA announced the signup for DFAP last July. The original deadline for submitting applications was Oct. 31, but USDA extended that until Jan. 13 and later to Jan. 17 after computer problems and severe winter conditions occurred near the end of signup.

“USDA knows it must earn the trust of the farmers, ranchers and forest landowners who are eligible for this program,” said Agriculture Secretary Tom Vilsack in announcing the first extension. “That makes transparency in the administration of the Discrimination Financial Assistance Program crucial.”

Approximately half of the applications were submitted on paper, which meant the 40-page documents had to be scanned into the computer system set up to receive online applications. Representatives of the Windsor Group and Analytic Acquisitions, the two entities selected by USDA to administer the program along with the Midtown Group, have begun reviewing the applications.

Dividing $2.2 billion by 58,000 applications would provide an average payment of about $38,000. The DFAP administrators are expected to award varying amounts of money, depending on the amount of financial loss experienced by socially disadvantaged borrowers who applied for the payments.

Congress included language in Section 1005 of the American Rescue Plan Act passed in 2021 that would have paid up to 120% of the outstanding loan balances of socially disadvantaged borrowers with USDA direct and guaranteed loans. The term socially disadvantaged borrower is defined in the Food, Agriculture, Conservation and Trade Act or the 1990 farm bill.

Texas lawsuits

Shortly after its passage, five farmers in Texas filed a lawsuit, Miller vs. Vilsack, claiming the ARPA’s Section 1005, which would have provided $4 billion in debt relief to farmers of color, was unconstitutional. A federal judge agreed and granted an injunction blocking it.

Section 22008 of the Inflation Reduction Act repealed Section 1005 of the American Rescue Plan while Section 22006 provided $3.1 billion in financial assistance for all distressed USDA borrowers, and Section 22007 provided $2.2 billion for farmers who experienced discrimination prior to 2021.

“The American Rescue Plan Section 1005 funds could have made a major difference for many of our farmers,” said John W. Boyd Jr., president of the National Black Farmers Association. “We have lost farmers and ranchers across the country who could have been helped by ARPA or Section 22007 funds if they had been available.”

Boyd and leaders of other minority farm organizations have been calling on the Biden administration to follow through on commitments it made to minority producers during the 2020 election. Boyd has said he won’t support Biden in 2024 unless changes are made.

“We are asking our fellow Americans to join John and me in our effort to #SaveAmericanFarmers by calling or writing President Biden at the White House and the Senate and House Agriculture Committees to request an all-inclusive farm foreclosure moratorium for all ag lenders to save American farmers,” said Kara Boyd, wife of John Boyd and president and founder of the Association of American Indian Farmers.

“The Biden Farm Foreclosure Moratorium must include foreclosure protection for USDA Farm Service Agency Farm Ownership Direct and Guaranteed Loans and other agricultural loans with private lenders while legislative remedies are being implemented.

The Boyds note that the number of Black-owned farms in the U.S. dropped by 4,000 between 2017 and 2022, according to USDA’s Census of Agriculture. (The number fell from 32,910 in 2017 to 28,723 in 2022.

“It’s estimated we’ve lost about 10,000 farms to foreclosure in the last year to 18 months,” said John Boyd, “at the same time we’ve been helping farmers in Ukraine and in other countries. I’m not opposed to helping Ukraine, but we can’t turn our backs on farmers in our own country.”

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About the Author(s)

Forrest Laws

Forrest Laws spent 10 years with The Memphis Press-Scimitar before joining Delta Farm Press in 1980. He has written extensively on farm production practices, crop marketing, farm legislation, environmental regulations and alternative energy. He resides in Memphis, Tenn. He served as a missile launch officer in the U.S. Air Force before resuming his career in journalism with The Press-Scimitar.

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