Debt relief promised, some black farmers receive collection notices – Center for Public Integrity

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After racking up more than $100,000 in debt over more than two decades of farming, a Georgia-based farmer named Denver received some good news from the US Department of Agriculture last year. Farmers like him would qualify for a new debt relief program. The USDA would repay some loans and give him a little extra for his tax obligations.

Denver has not received payment. But almost a year later, he received another letter: A notice that the USDA intends to take legal action to recover money he owes the agency. Denver asked the Center for Public Integrity not to use her last name for fear of retaliation.

“We know institutional discrimination is systemic within the USDA,” said Tracy Lloyd McCurty, executive director of the Black Belt Justice Center. “So the question is, how many other black farmers across the country are going through this and they just don’t know who to talk to about it?”

How Denver and other farmers like him got here is a confusing mix of bureaucracy, political choices and litigation. Farmers and advocates fear massive land loss and seizures if this legal confusion is not resolved. Data the Center for Public Integrity received as part of a Freedom of Information Act request also suggests the USDA violated its own promise to suspend debt collection during the pandemic.

But let’s start at the beginning.

In January 2021, the USDA promised it would suspend debt collections, foreclosures and other adverse actions on borrowers with direct agricultural loans, entered into between the Farm Service Agency and the borrower, given the economic difficulties posed by the COVID-19 pandemic.

This decision was followed by the American Rescue Plan Act. The new law included a $4 billion program to forgive certain farm loan debts that farmers of color owe to the Farm Service Agency, a USDA sub-agency that provides loans to agricultural producers. The law energized black farmers and other farmers of color who have long faced discrimination from the department, which approved access to credit at lower rates and provided unfair program payments to those whom farmers whites received.

Eligible farmers such as Denver received notices from the USDA stating exactly how much it would pay to clear their debts, including 20% ​​to cover tax debts.

As the USDA prepared to implement the new law last year, eligible farmers were told they would not be punished for failing to pay. So Denver stopped.

But legal challenges from white farmers alleging reverse discrimination have been filed in several states. Eventually, a federal judge blocked the USDA from implementing the program and authorized a class action lawsuit.

“This is one of the most heartbreaking situations I have seen in my more than 30 years as a lawyer working with farmers,” said Susan Schneider, director of the LL.M. Agriculture and Food at the University of Arkansas School of Law. “USDA is prohibited. They really can’t do anything.

Advocates and farmers, including John Boyd, president of the National Black Farmers Association, say they have received little communication about the status of the debt relief program. Boyd said last July that the White House had promised a meeting with President Biden. A few weeks ago, he asked USDA Secretary Thomas Vilsack for another one, but nothing happened.

As the year ended, Denver and other farmers began receiving notices that the USDA wanted to collect their debts. Some had liens on their crops and were not initially paid so that the funds could be used to pay their loans.

“Why don’t they stop sending us papers if you promised us they would do something for us?” said Denver, a peanut and cattle rancher.

USDA announced on February 1 that he was required by law to send the notices and “does not intend to take any action which is indicated”, Zach Ducheneaux, Administrator of the Farm Service Agency, said in a video. This law, the Farm Credit Act of 1987, was designed to help borrowers become familiar with the various loan service tools so that they can get out of financial difficulties. Direct borrowers can expect another letter that further explains their loan service optionsthat they can exercise without having missed a payment.

“The USDA’s recent actions to bring clarity to struggling farmers are a step in the right direction,” U.S. Sen. Raphael Warnock, D-Ga., said in a statement to Public Integrity. Warnock alerted Secretary Vilsack to Georgia farmers facing potential adverse action in a letter dated December 10.

Despite attempts to clear up the confusion, the USDA letters caused confusion and distress among borrowers.

“It’s very confusing for the farmers, and they needed a lot of information from our offices because they were told one thing, and then they get documents that say something else,” said Dãnia Davy, director land retention. and advocacy with the Federation of Southern Cooperatives/Land Assistance Fund. “It’s just not very clear to farmers what their obligations are.”

The USDA’s suspension of debt collections, foreclosures and other adverse actions is expected to continue while the national COVID-19 disaster declaration is in place, which is now set to expire on March 1. But data the Center for Public Integrity obtained through a freedom of information law request suggests the department has continued to collect eligible debts.

The USDA did not respond to requests for comment.

Is the USDA seizing profits?

The USDA offers two types of loans. Direct loans are made between the Agricultural Services Agency and the borrower. Secured loans are made by a traditional lender but backed by the Farm Service Agency. Both programs are for borrowers who cannot obtain reasonable credit terms elsewhere.

In January 2021, the USDA suspended debt collection and seizures on direct loans. He asked agency-backed lenders to follow his lead, but they are not bound by USDA policy.

Despite the suspension, the USDA collected about $538,000 in debt from Feb. 1 to Nov. 25, 2021, according to data the Center for Public Integrity obtained through a Freedom of Information Act request. About 16.1% of those funds were raised from people of color.

The USDA told Public Integrity it needed to clarify some of the data, but offered no information, including an answer to specific questions such as why debt set-offs and wage garnishments appear to have continued. after the USDA. announced his suspension.

Meanwhile, a coalition of groups representing farmers and ranchers of color is trying to find out if farmers will see similar collections following the suspension of the debt relief program, but that’s a tough question to answer. , Davy said. Based on conversations with USDA officials, she thinks they’re trying to be optimistic about the program still moving forward.

“I think they don’t want to concede any negative results pending litigation,” Davy said. “I think they’re hoping there are other ways around this scenario of massive foreclosures and loss of land.”

As for Denver, its next USDA loan payment is due in the coming months. It will restart the payments even if they are not needed. He doesn’t want to fall any further behind.

“I work too hard to get where I am,” Denver said. “I’m not going to give my land to these people because you promised me something, and you’re not keeping your end of the bargain.”

This story was produced in partnership with the McGraw Center for Business Journalism to Craig Newmark Graduate School of Journalism at the City University of New York.

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