USDA launches loan forgiveness program for minority farmers


Socially disadvantaged farmers will start receiving letters this week alerting them to a Biden administration program to repay loans they owe the USDA – “historic debt relief” in the words of the Secretary of State. Agriculture Tom Vilsack. Loan cancellation could total $ 4 billion by the time the government later this year cancels bank loans to minority farmers with USDA loan guarantees.

President of the House of Agriculture David Scott, who helped with debt relief through Congress, said he was working on the next step: legislation to provide tax credits to businesses that buy agricultural and food products from farmers socially disadvantaged, who represent about 5% of what is a predominantly white occupation. Legislation is also pending in Congress to revise USDA’s handling of civil rights complaints and to eliminate discriminatory practices from its operations.

Debt relief has become a lightning rod in rural America. Two lawsuits, one with Texas Agriculture Commissioner Sid Miller, as the plaintiff, say it is unconstitutional to exclude white farmers from canceling their loans. Proponents say debt relief will neutralize decades of systemic discrimination. In legal regulations since the late 1990s, the USDA has recognized prejudices against minority groups.

The USDA provided more than $ 23 billion in pandemic relief to growers in 2020, and almost all of the money went to white growers. Pandemic payments were tied to volume of production, and white farmers tend to have larger operations and focus on the comparative handful of crops that are part of the farm program.

“This is a major milestone,” Sen said. Raphael warnock, Georgia Democrat, on social media. “Now, in the wake of the pandemic, we can finally start to level the playing field, helping socially disadvantaged farmers in Georgia and beyond.” Vilsack joined Warnock at a press conference on a farm in Georgia on Saturday to discuss the debt relief program.

In a statement Friday, Vilsack said USDA “will provide historic debt relief to socially disadvantaged farmers and ranchers from June.” Vilsack also said the loan cancellation “will” be one of the most important civil rights pieces of legislation in decades. The law directs USDA to repay agricultural loans to nearly 16,000 minority farmers and begin addressing long-standing racial equity challenges that have plagued farmers of color for generations.

An official notice of the debt relief program will be released this week, the USDA said. Also starting this week and continuing through June, USDA will send letters to eligible farmers and ranchers who hold loans made directly by USDA. Producers will need to sign and return the letter if they want debt relief. Payments would start in June. The debts would be repaid and the producers would receive an amount equal to 20% of their total eligible debt, which could be used to pay taxes and other costs.

The USDA intends, before the end of August, to explain how it will treat secured loans as well as direct loans that were previously referred to the Treasury Department for debt collection.

Loans covered by the debt relief program include operating loans, farm property loans, and conservation loans. The program is limited to loans made by the USDA and private lenders with repayment guarantees from the USDA. Loans from commercial lenders are not eligible if they do not include a USDA collateral.

Socially disadvantaged farmers include blacks, Hispanics, Native Americans, Alaskan natives, and residents of Asia and the Pacific.

The USDA home page for the Debt Relief Program is available here.

Leave A Reply

Your email address will not be published.