Black farmers say Cut Inflation Act reneges on debt relief promises

Virginia tobacco farmer Lester Bonner opened his mailbox one morning last June to find a letter from the United States Department of Agriculture. The five-page missive said the remaining balance on a $50,000 federal loan he received to help him buy his farm would soon be cleared.

“It was going to release the biggest burden of my life,” Bonner, 75, told CBS MoneyWatch. “That’s what’s been holding me back all this time.”

It’s been more than a year since Bonner, who is black, received that letter from the USDA, but his loan has still not been forgiven. Now he believes he will never be erased.

Thousands more in Bonner’s shoes are also wondering if they will ever see debt relief, according to a national group of black farmers. This is because a provision of the Inflation Reduction Act – which President Biden enacted on Tuesday — considerably reduced the amount of funds allocated to farmers for debt relief. The bill also removed language that specifically provided money for black farmers to erase their USDA loans.

The Emergency Relief for Farmers of Color Act, which passed last year alongside the U.S. bailout, called for $4 billion loan forgiveness to farmers of color. In addition to providing relief to black growers who have struggled during the pandemic, the emergency funding marked the first step to redressing decades of discrimination some farmers say they have faced from the USDA.

Yet the loan forgiveness program was dropped from the measure of inflation before the money could reach farmers like Bonner.

The revised Inflation Reduction Act provides $3.1 billion to ‘troubled borrowers’ and an additional $2.2 billion to farmers who have been ‘discriminated against’ by the USDA, all removing race as an eligibility criterion.

“Broken Promise”

By removing the “farmers of color” language originally stipulated in the bill, the revised measure hurts black farmers because it opens up debt relief funding to farmers of all races, John Boyd Jr. said. president of the National Black Farmers Association. That will likely mean fewer black farmers will receive forgiveness for USDA loans because they outnumber white farmers nationwide, added Boyd, who is a farmer from Virginia.

Farm funding changes come a year after at least six federal lawsuits were filed by white farmers who claimed that the legislation was unfair because it prevented them from applying for loan forgiveness because of their race. The lawsuits still pending came from small growers in Florida, Tennessee, Texas, Wisconsin and Wyoming.

Boyd decried the changes to the funding program.

This is a broken promise and a broken contract between the US government and black farmers,” he said. “It is a huge loss for us and other black farmers who have been waiting for this.”

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John W. Boyd Jr., president of the National Black Farmers Association, criticized a change in the eligibility criteria for USDA loan relief under the Inflation Reduction Act as “a loss huge for us and other black farmers.”

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Black farmers could still get a big chunk of the aid provided under the inflation bill, although it’s unclear whether their claims will be swamped by other applicants who are now also eligible for assistance. Boyd said it would come down to how the USDA sets the criteria.

The USDA still hasn’t determined what farmers will need to submit to prove they’ve been discriminated against or are in distress, the agency told CBS MoneyWatch.

“The USDA intends to act quickly, and our teams are already considering the best path forward and our options for complying with the language,” a spokesperson told CBS MoneyWatch on Friday.

For decades, farmers of color have complained about what they say is unfair treatment when applying for USDA loans. A 1982 U.S. Civil Rights Commission report found that the agency’s lending arm “has failed to give adequate importance or priority to the crisis facing black farmers.” In some cases, the USDA “was able to impede the efforts of black smallholder farmers to remain a viable force in agriculture,” he added.

More recently, farmers of color said it was difficult to get farm loans because lenders see them as “more likely to operate smaller, lower-income farms, have longer credit weak or lack clear title to their farmland,” a 2019 report from the U.S. Government Accountability Office.

No fuel for his tractors

Black farmers like Bonner and Boyd said they depended on debt cancellation because their operations struggled to maintain their financial footing during the coronavirus pandemic. Black farmers received just 0.1% of pandemic relief provided for farmers, US Agriculture Secretary Tom Vilsack told The Washington Post last year.

Times were so tough on Bonner’s 136-acre farm, located in Virginia’s Dinwiddie County, about 40 miles south of Richmond, that he resorted to selling his hogs.

“I live from social security check to social security check,” Bonner told CBS MoneyWatch. “And right now I can barely buy fuel for the tractors, and half of them are already broken.”

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Bonner bought the farmland with his brother in 1989, and they have since paid off the loan to around $20,000. The late Bonner said he made no payments due to a lack of income.

Bonner said the USDA’s letter promising debt relief was a lifeline — a lifeline that could have been removed.

“It’s like the 40 acres and a mule,” he said. “You get promises, but you never get them.”

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