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USDA assists socially disadvantaged producers

OceanFishing/Getty Images Department of Ag office building
USDA ASSISTANCE: Debt relief and other assistance are part of USDA efforts on behalf of socially disadvantaged producers through the American Rescue Plan Act of 2021, which was passed by Congress in March.
Policy Report: Implementation of farm debt relief was authorized through the American Rescue Plan Act of 2021.

In May, USDA began implementation of farm debt relief and other assistance for socially disadvantaged producers as authorized through the American Rescue Plan Act of 2021, which was approved by Congress and President Joe Biden in March.

The debt relief and other assistance is substantial and could be described as unprecedented even as it also could be described as a product of more than 100 years of evolving challenges and attention to issues of prejudice and discrimination in federal agricultural programs.

The assistance amounts to about $5 billion out of a reported total of $16 billion in agricultural and food system assistance in the latest COVID-19 relief package, but it represents only a fraction of the total $1.8 trillion in projected spending under the legislation.

Debt forgiveness

The primary component of the assistance is 100% debt forgiveness, plus 20% to address tax implications, for socially disadvantaged producers with outstanding loan balances as of Jan. 1, 2021, on agricultural loans directly from or guaranteed by USDA.

The term “socially disadvantaged” is specifically referenced in the legislation from existing statutes to include producers that are members of a group who have been subject to racial and ethnic prejudice in USDA programs, whether through direct discrimination or through discriminatory policies and program rules.

According to USDA information at farmers.gov, that definition includes Black or African American, American Indian, Alaskan native, Hispanic or Latino, Asian, or Pacific Islander producers. As a note, other statutes may also include women in the term “socially disadvantaged” because of historical issues of gender discrimination, but this assistance is specifically targeted based on racial and ethnic discrimination concerns — women in qualifying racial and ethnic groups would be eligible, but not women in general.

The debt relief is estimated to cost nearly $4 billion with an additional $1 billion targeted for producer outreach and training; grants and loans for land access and heirs property; equity commissions to focus on USDA efforts; and research, education, Extension, scholarship, internship, and federal career pathway support for institutions of higher education serving targeted audiences.

The debt relief has garnered the most attention and may be unprecedented in terms of the amount of ag assistance specifically targeted at a limited, qualifying producer group. It also may be unprecedented in terms of the less than five weeks’ time from introduction in early February to inclusion in the overall legislation passed in early March

Long history

While the size and speed of the assistance may be unprecedented, there is a long history of issues and action that provides some foundation for the current efforts. In the 1990s and early 2000s, multiple lawsuits challenged USDA programs and policies as discriminatory.

Black farmers were represented by the lawsuit Pigford v. Glickman. Two settlements in 1999 and 2010 ultimately provided $2.31 billion in cash and debt relief to qualifying producers. Similarly the Keepseagle v. Vilsack lawsuit during the current Secretary of Agriculture’s previous tenure in the department was settled in 2010 with a $760 million settlement for Native American farmers and ranchers.

Two other lawsuits, Garcia v. Vilsack and Love v. Vilsack, challenged USDA in regards to treatment of Hispanic and women farmers, respectively. They were both addressed outside of litigation with USDA actions in 2011 to provide $1.5 billion compensation and debt relief to eligible claimants. Altogether, USDA has committed more than $4.5 billion over the past 22 years to settle discrimination cases.

Numerous USDA programs have also provided targeted assistance for specific groups of producers for a much longer time period, including the exact definition of socially disadvantaged producers used for the current assistance that was spelled out in 1990 Farm Bill legislation.

Various loan, grant, cost-share and other assistance programs have targeted farmers and ranchers over time who qualify as socially disadvantaged, immigrant, beginning, or veteran (military) farmers and ranchers.

The North Central Extension Risk Management Education Center (ncerme.org) at the University of Nebraska-Lincoln also emphasizes educational support for these audiences, along with producers in a stage of farm or ranch transition, as well as those traditionally underserved by federal crop insurance programs.

The lawsuits and the existing USDA targeted programs provide some recent precedent for the current efforts, but it is also clear the issues have grown over a much longer period and are likely to continue to shape further policy discussions.

The debt relief in the current assistance package has been characterized as just a start by some proponents, recognizing that it only helps current producers and loan program participants and not those who had exited or were forced out of agriculture by discriminatory practices over the preceding decades.

It has also been challenged by others as discriminatory itself in specifically targeting assistance based on racial and ethnic qualifications. The program is being rolled out even as the issues and challenges are likely to continue.

Land access

Another lingering issue is the question of land access and heirs’ property. The current assistance reserves some funding for helping socially disadvantaged producers address land issues. That may include new grant or loan programs for land acquisition by socially disadvantaged producers, but nothing in the legislation or discussion suggests confiscation or condemnation of existing private property for a redistribution program.

It also may address the issue of heirs’ property, the situation where heirs inherit undivided ownership in land often because of a landowner passing on without a will. After a generation or two, the land can quickly become bogged down with numerous heirs, each with an undivided minority interest in the land, making it difficult to manage or even value on the balance sheet as collateral for financing.

Heirs’ property is a particularly acute issue for Black producers, but Native American producers face similar challenges of managing land inherited over generations or held in trust with the tribe, neither of which may provide a clear title to the producer.

Even white producers increasingly face challenges of managing land over multiple generations if a will or inheritance doesn’t provide a clear division of property, so the issue is very real and will take substantial effort to address.

Complex issues

The issues facing socially disadvantaged producers and the policy efforts to address them are complex and long-lasting. More than a century of federal program support and also concerns about program discrimination led to the lawsuits of the past 20-plus years, as well as the targeted programs and continued efforts to provide new assistance, culminating in the current package for now.

While the $4 billion to $5 billion package looks unprecedented, there is substantial evidence and history behind it, and it could ultimately be described as relatively modest in comparison to the more than $40 billion of COVID-19 ag assistance for agricultural commodity producers in 2020 and 2021, or the overall COVID-19 relief bills that have repeatedly come with price tags in the trillions of dollars.

The issues facing socially disadvantaged producers also are likely to remain even after the current assistance is distributed. Based on the attention the agricultural committees in Congress have focused on the topic recently, the groundwork is there for further efforts that may help shape the development and debate over the next farm bill, which is due in 2023.

Lubben is the Extension policy specialist at the University of Nebraska-Lincoln.

TAGS: USDA
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