Legal uncertainty has created new and unexpected financial hardship for black farmers, many of whom have been unable to invest in their businesses due to continued uncertainty about their debt burden. It also poses a political challenge for Mr. Biden, who was brought to power by black voters and now must keep promises to improve his fortune.
The law was intended to help correct years of discrimination suffered by non-white farmers, including land theft and rejection of loan applications by banks and the federal government. The program was designed to help approximately 15,000 borrowers who receive loans directly from the federal government or who have USDA-guaranteed bank loans. Alaska Native, Asian American, Pacific Islander, or Hispanic.
After the initiative was launched last year, it met with rapid resistance.
Banks were unhappy that loans will be repaid ahead of schedule, depriving them of interest payments. White farmer groups in Wisconsin, North Dakota, Oregon, and Illinois are suing the USDA alleging that debt relief based on skin color is discriminatory, suggesting that a successful black farmer can pay off his debts while a struggling white farmer may disappear. from business. America First Legal, led by former Trump administration official Steven Miller, filed a similar lawsuit in the U.S. District Court for the Northern District of Texas.
Last June, before the money even flowed in, a federal judge in Florida blocked the program on the grounds that it was applied “strongly racially motivated” regardless of any other factor.
The delays angered black farmers, whom the Biden administration and Congressional Democrats were trying to help. They argue that the law was poorly written and that the White House was not strong enough to defend it in court for fear that a legal defeat could undermine other race-based policies.
Those fears became even more pronounced late last year when the government sent thousands of letters to minority farmers who were in arrears on loans, warning they were at risk of foreclosure. Letters were automatically sent to all borrowers who defaulted on their loans, according to the Agriculture Ministry, including about a third of the 15,000 disadvantaged farmers who applied for debt forgiveness.
Leonard Jackson, a farmer in Muskogee, Oklahoma, received such a letter despite the USDA telling him he did not have to pay the loan because his $235,000 debt would be paid by the government. The letter irritated Mr. Jackson, whose father, a wheat and soybean farmer, forfeited the government’s foreclosure of farm equipment several years ago. The prospect of losing his 33 cows, house and trailer was unfathomable.