Included in the American Rescue Plan as the latest round of COVID relief, Black farmers and other farmers of colors are eligible for loan forgiveness up to 120% on USDA direct and guaranteed loans. During a House Agriculture Committee hearing featuring testimony from Secretary of Agriculture Tom Vilsack and Black farmers, Vilsack shares his plans on using allocated money from Congress in helping what he termed systemic racism at the agency for multiple decades.

In opening the hearing, Vilsack says, “I want to provide you, Mr. Chairman, and members of this committee a single and solemn commitment from me, from the team at USDA, that we will over the next four years, do everything we can to root out whatever systemic racism and barriers may exist at the department of agriculture directed to Black farmers, socially disadvantaged farmers, people who live in consistently poor areas of rural America.”

He adds good faith efforts have already been made in the past “to respond to specific acts of discrimination, but more needs to be done to dig deeper into the systemic causes and barriers that perpetuate discriminatory practices, and to deal directly with the cumulative effect of discrimination.”

He says the American Rescue Plan contains an historic step forward in responding to the cumulative effects of discrimination in the past by providing debt relief for socially disadvantaged farmers. Vilsack says he plans to implement the loan forgiveness provisions as quickly as possible that could help 13,000 to 15,000 individuals who currently have either a USDA direct loan or guaranteed loan for their farm operation.

The additional 20% is provided for the purpose of paying the taxes that may come as a result. Vilsack says depending on the size of the loan, “the tax issue may be so that you may want to divide potentially the forgiveness of the loan over more than one tax year in order to minimize your tax liability.” He says it will be necessary to provide outreach to eligible farmers.

Through USDA’s guaranteed loan programs, USDA works with individual banks that sometimes resell those loans. USDA has asked no further action be taken to foreclose on farms. The agency has also sent a letter to all banks asking if there is a prepayment penalty. “We're going to ask for documentation of that prepayment penalty, and we're going to try to figure out how to deal with that,” Vilsack says.  

The new law also provides approximately $1 billion in additional funding for assistance and support to socially disadvantaged producers and groups. Vilsack also says USDA is in the process of standing up a Racial Equity Commission to identify and address barriers across USDA. The law also directs USDA to invest in programs to facilitate land access, strengthen outreach and education, business development, and more.

In defending his previous tenure at USDA for eight years during the Obama administration, he says with more than 4,000 offices across the country, he would not be surprised to hear of actions that were discriminatory. He does plan to begin a process of recording any complaints of discrimination and see if there’s a spike in complaints.

“USDA is now engaged in a process of outreach and seeking feedback directly from socially disadvantaged producers as we implement the law. This will be a collaborative, inclusive process,” Vilsack states in his written testimony.

Vilsack states that “the whole equity issue, the whole equity effort is at the top of the list in terms of time that we will spend collectively as a team focused on all these issues.”

A look at the number of Black farmers

In his opening statement, House Agriculture Committee Chairman David Scott, D-Ga., notes in 1920 Black farm operators were 14% of all U.S. farmers. Today Black farmers make up less than 2% of all farmers in the United States. Lack of equal access to federal farm loan programs is a large reason Black farmers have lost 90% of their land, he adds.

In 1997, a group of Black farmers, including Timothy Pigford, filed a class action lawsuit against USDA over the agency’s discrimination against Black farmers in farm loan programs and other benefit programs, as well as over the agency’s failure to investigate race discrimination complaints. USDA settled this class action lawsuit, and as a part of that settlement, some Black farmers received $50,000 dollars, Scott shares. 

John Boyd, president of the National Black Farmers Association, notes that discrimination continues to be reflected and reinforced by current USDA programs. “While Black farmers receive about $60 million in annual commodity subsidies, white farmers annually receive about $10 billion in commodity subsidies,” he says.

Philip Haynie III, chairman on the National Black Growers Council, testifies that studies have shown that Black farmers receive less than 20% of the per acre amounts paid to their white farming neighbors. Current subsidy options – the Agricultural Risk Coverage and Price Loss Coverage – are based primarily on the crops and yields grown from 1981-1985, a period of admitted racial discrimination by USDA.

“These inequities ultimately result in Black farmers being less profitable, which impacts the second critical area, access to credit.”

Boyd also says ad hoc disaster payments overwhelmingly flowed to white farmers, which many supporters of the $5 billion used as the justification for additional money in the latest COVID relief to flow to farmers of color who were disproportionately left out. Boyd testified that 99% of the Market Facilitation Program payments when to white farmers, and 97% of Coronavirus Food Assistance Payments made to address the COVID-19 pandemic went to white farmers.

Boyd, who was part of the 1997 Pigford settlement, says the relief offered under the American Rescue Plan Act begins to fulfil the promises of the Black farmers lawsuits and gives new life to Black farmers facing foreclosure.

“To support Black farmers, we must reform our subsidy and crop insurance programs to level the playing field between white farmers and Black farmers. We must expand access to land and credit so that Black farmers can expand our operations. And we must improve outreach and technical assistance to Black farmers who have been treated as second class citizens by the department for too long,” Boyd says.