This article was published with the support of: public integrity center.
It was nearly a quarter of a century ago that thousands of black farmers filed a class action lawsuit against the U.S. Department of Agriculture seeking financial compensation. More than 15,000 people received one-time payments of $50,000, and a smaller number were approved for larger payments. Some had hoped this would finally allow them to get out of debt to the department.
However, the funds were not enough for some farmers. And the second version of the settlement, which reached other black farmers in 2010, did not resolve the underlying issues.
“Toxic debt is here to stay,” said Sylvia Stewart, director of research and communications and senior fellow at Brandeis University’s Institute for Economic and Racial Equity in Waltham, Massachusetts. Impact of Pigford v. Glickman and settlements for black farmers.
After the black farmers filed the Pigford lawsuit, Native Americans, Latinos, and women farmers filed similar lawsuits alleging discrimination in lending and welfare programs by the department. Everything ended in reconciliation.
Nearly 25 years later, USDA officials say they are still working to address disparities caused by discrimination in farm lending.
But today, under the Biden administration, the USDA takes a broad-based equity approach that targets all borrowers in financial distress and uncovers discriminatory practices that have affected farmers of all races in agricultural lending. He said he wanted to correct racial discrimination by doing so. program. Black borrowers are the racial group that has the hardest time getting out of USDA debt.
The U.S. Department of Agriculture is developing a method to identify which individuals should receive reparations for historic injustices committed against groups of people years ago, and how to identify which individuals should receive reparations for historic injustices committed against groups of people years ago, and how to identify which individuals should receive reparations for historic injustices committed against groups of people years ago, and how to identify which individuals should receive reparations for historic injustices committed against groups of people years ago, and how to identify which individuals should receive reparations for historic injustices committed against groups of people years ago, and how to apply this to modern We are working on how to do that with laws specific to the phenomenon. But it also runs counter to the fact that one side of Congress is controlled by Republicans who deny the existence of racial inequality as a modern problem. Their idea of a “colorblind” government and judicial system that denies any responsibility to correct injustices based on past discrimination has been given a boost by the recent Supreme Court decision rejecting affirmative action in college admissions.
“Race is not the only factor we consider as we seek to achieve equity,” said Dwayne Goldmon, senior racial equity advisor to the Secretary of Agriculture.
Given the USDA’s history, it at least recognizes that “disparities exist between the different races of the customers we seek to serve, and we must find ways to address those disparities.” It is difficult to make “significant improvements” without doing so. in a very transparent and productive manner,” Goldmon said.
The current administration is seeking to address disparities through a new program included in the Inflation Reduction Act of 2022 that would help farmers get out of USDA debt, regardless of race.
But the effort comes after a federal judge blocked debt relief for farmers of color in the coronavirus relief bill, the American Rescue Plan Act of 2021, on the grounds that it discriminated against white farmers. Ta. As a result, Congress reversed course.
One of the programs in the Inflation Control Act provides debt relief to borrowers of all races who are considered economically disadvantaged. Congress allocated $3.1 billion to borrowers who default on loan payments or face other financial risks. Financial aid includes past due loan payments and upcoming loan payments.
USDA began making payments in October 2022 and distributed $1.1 billion in debt relief payments as of May 23.
In another program of the Inflation Control Act, Congress appropriated $2.2 billion in financial assistance to farmers of all races who experienced discrimination in USDA farm lending programs before January 1, 2021. The Department of Agriculture works closely with local communities on this and other programs. Zach Duchesneau, secretary of the Farm Service Administration, the division of the USDA that manages loans, said the organization is trusted by the diverse population it serves.
“We intend to develop and foster relationships with external NGOs to ensure that we reach those who need a little more hands-on technical assistance to participate meaningfully in all of our programs. “We’ve been working hard on this,” Ducheneaux said.
The discrimination program could reimburse farmers for federal payments that were withheld or offset to repay loans found to be related to discrimination in the agency’s agricultural lending programs.
Farmers who default on loans can have federal payments such as Social Security checks, income tax returns, pensions and farm subsidies garnished or offset against the debt. A loan becomes delinquent if the borrower misses scheduled payments on the loan.
Timothy Pigford filed the first lawsuit in 1997, which eventually became a class action lawsuit. The civil suit, known as Pigford v. Glickman, alleged that federal agencies engaged in racial discrimination against Black farmers in the way they distributed loan programs by delaying or denying loans to Black farmers. It also alleged that the Department of Agriculture did not consistently address official complaints of its discrimination.
The case did not go to trial. In 1999, the parties agreed to a settlement that presented the farmer with two different categories of claims for him: Track A and Track B. Each farmer had to choose a track to pursue as part of the settlement agreement.
Track A included a $50,000 award and the chance to have any outstanding loan program debt associated with the discrimination claim forgiven. However, farmers who chose Track A were required to prove that their loans had been denied, delayed, or reduced when they applied for USDA loans. They needed to show that similarly situated white farmers were being treated better than they were. Finally, you must be able to prove that they all result in financial loss.
Track B allowed farmers to seek full damages, but also required them to provide a “preponderance of evidence” of discrimination. Farmers must show the arbitrator that USDA discrimination has cost them more than $50,000 in damages, including documentary evidence, which they must present in a mini-trial. However, if farmers are successful, they could be compensated for all costs associated with the discrimination they faced.
Despite strict eligibility criteria, the process was met with accusations that some funds went to the wrong people. The New York Times published an investigative report in 2013 that said: Details of large-scale fraud“a runaway train driven by racial politics, pressure from influential legislators, and law firms seeking more than $130 million in fees.”
A total of 15,645 claims were filed. approved Track A resolved 115 claims from 22,721 eligible class members in Track B.
A small number of these, approximately 425 or 2.7% of claimants, received debt forgiveness.
Eleven years later, a second settlement was created for those who joined the first lawsuit too late. Between both Pigford settlements, more than 60,000 people filed claims. Approximately half obtained some form of compensation.
As a result of the Pigford case, the federal government returned more than $2 billion to claimants.
Black farmers lost $326 billion in land between 1920 and 1997, according to a study released last year by the American Economic Association.
But because most people did not receive debt forgiveness, many had to take on the settlement money to continue farming, according to the Pigford Project, a research initiative by Brandeis University’s Institute for Economic and Racial Equity. The money was used to pay off other debts that had not been paid. and Southern Cooperative Federation/Land Assistance Fund.
Although the USDA could not foreclose on farmers while their claims were being processed, claimants were still obligated to pay their loans. During that time, interest was accrued. This process continued for many years. In the end, some claimants did not have their debts forgiven, according to the project.
“Farmers applied for Track A to get their debts forgiven and live a free and clean life,” said Brandeis University’s Stewart. “But all we know is the big picture: how many people have been infected. [debt relief]or what [loans were] Forgiven. There is no strong list of who does what and why. ”
It is also unclear how many members of the Pigford class who made successful claims were later subject to set-offs or seizures. However, after claims processing, some claimants received a portion of their offset payments back.
Attorney Stephen Bowens, who is representing some of the claimants, said he was among local farmers and Farm Service officials who served on county commissions and had influence over who was deemed creditworthy. said it could send farmers into set-offs “in retaliation for filing Pigford claims”. He did not agree to a settlement agreement in the lawsuit.
Goldmon, the senior adviser for racial equity, said the offset will be provided to borrowers who have actually been discriminated against in the farm loan program in the past, such as Pigford applicants who no longer have active loans. He said it would be factored into the amount of financial aid. USDA Secretary.
There were some results that did not meet the expectations of class members. For example, some relief was provided, but if farmers did not receive full relief, it would be offset against loan balances that were supposed to be paid off.
“What we’re trying to do is devise a system that can hopefully provide some financial assistance to people who are suffering from that misfortune,” Goldmon said. “But at the same time, we connect them to access to agricultural lending programs that are more responsive and more comprehensive farm service agencies so that we can provide them with better access as they move forward.”