As part of the Biden administration’s American Rescue Plan, minority farmers in Minnesota were set to receive a portion of the $4 billion in loan forgiveness dedicated to BIPOC farmers across the nation. That is, until some white farmers in the state filed a lawsuit claiming the loan forgiveness program is racist.
Now, the Department of Agriculture has put a hold on the loan forgiveness program until the lawsuit — and suits from Wisconsin, Ohio and South Dakota — have been settled.
Stalls in funding like this are not new to Black farmers, however — farmers of color in Minnesota can see a history of broken promises repeating itself in this lawsuit.
What the lawsuit entails
The lawsuit in question was brought by plaintiffs Steve Nuest, owner of Nuest Farms in Stevens County; Kaylyn Dalsted, owner of Arrow D Ranch in Pembina County, North Dakota; Chad Walter, part owner of Walter Brothers Family Farm in Brown County; Kevin and Lynelle Vetsch from Todd County; and Jonathan and Samantha Quamme from Roseau County. They brought the lawsuit against Secretary of Agriculture Thomas Vilsack and Administrator of the Farm Service Agency Zach Ducheneaux.
Broadly, the plaintiffs take issue with an American Rescue Plan loan forgiveness program that includes provisions for the U.S. Department of Agriculture to pay up to 120 percent of loan balances for FSA loans to any “socially disadvantaged” producer with a qualifying loan. In USDA terms, “socially disadvantaged” includes Black, Hispanic, Native American, Asian American and other farmers of color.
In a statement when the program was announced, Vilsack said the USDA would “deliver historic debt relief to socially disadvantaged farmers and ranchers beginning in June.” Vilsack also said loan forgiveness will be “one of the most significant pieces of civil rights legislation in decades. The law directs USDA to pay off the farm loans of nearly 16,000 minority farmers and begin to address long-standing racial equity challenges that have plagued farmers of color for generations.”
But when some white farmers looked at the program, they saw racism where Vilsack saw civil rights.
“Were plaintiffs eligible for the loan forgiveness benefit, they would have the opportunity to make additional investments in their property, expand their farms, purchase equipment and supplies, and otherwise support their families and local communities,” the lawsuit said. “Because plaintiffs are ineligible to even apply for the program solely due to their race, they have been denied the equal protection of the law and therefore suffered harm.”
The USDA issued a statement saying the department was reviewing the lawsuit with the U.S. Department of Justice, but the agency plans to continue to offer loan forgiveness to “socially disadvantaged” farmers. Despite that claim, payments are still on hold.
The plaintiffs say in the lawsuit that “resting on broad-brush assumptions of historical discrimination is exactly what the United States has done here,” and take issue with the phrase “socially disadvantaged” having explicit racial classifications. They say they’re otherwise eligible for the loan forgiveness program, except for the color of their skin.
But Patrice Bailey, an assistant commissioner who leads the Minnesota Department of Agriculture’s emerging farmers initiative, doesn’t see it that way.
“[The loan forgiveness program] is not anything to do with punishing white farmers at all,” Bailey said. “You still see the same white people receiving grants and applying for grants and are getting grants in that order. [But] the people that need the grants the most may not know how to get started. … It makes sure that there’s diversity within this new opportunity, especially from Indigenous tribal nations, who historically are not on that list.”
Bailey, a Black farmer himself, said that this lawsuit is just a drop in the bucket of setbacks that farmers of color across the country have experienced since the end of the Civil War.
This issue isn’t new
After the Civil War, the federal government made a promise to formerly enslaved people, commonly known as the “40 acres and a mule” promise, which was the first systematic attempt to provide a form of reparations, radical for its time.
People freed from enslavement and their descendants accumulated 19 million acres of land, but when President Andrew Johnson, Abraham Lincoln’s successor and a sympathizer with the South, took office, he overturned the order promising land to freed people. The land largely went back to plantation owners who originally owned it along the South Carolina, Georgia and Florida coasts.
Many Black people still were able to farm, but Black farmers could be pushed off their lands by force or through tax fraud. Some banks were unwilling to finance farm equipment. Local offices with the Department of Agriculture would also deny or delay loans to Black farmers, documented in a series of government reports starting in the 1960s.
In 1910, 14 percent of all farm owner-operators were Black. By 2012, though, that number fell to 1.5 percent of all farmers.
Inequities continued over the decades, and from 2012 to 2014, white people generated 98 percent of all farm-related income from land ownership and 97 percent of the income that comes from operating farms. Farmers of color, on the other hand, were less than four percent of farm owner-operators and were more likely to be tenants than owners, meaning they couldn’t generate the same amount of wealth as their counterparts who owned the farmland. Latinx people also comprised over 80 percent of farm laborers, a notoriously under-paid and vulnerable position in American farming.
The USDA sent tens of billions of dollars to farmers impacted by COVID-19 in 2020, but only one percent of that aid went to “socially disadvantaged producers.” Previous to the American Rescue Plan, the last big payout to Black farmers only came after a class action lawsuit that began in the 1990s.
The most recent farm census identified 39 Black farmers in Minnesota out of nearly 69,000 farms. A total of 1,267 farmers of color operate in the state, and most run small operations. Nationally, about 1.3 percent of farmers are Black. In Minnesota, it’s 0.03 percent. In 2017, the Center for American Progress found the average full-time Black farmer made $2,408 in income, compared to the average white farmer’s $17,190. The disparity may be partly due to Black farmers’ average acreage being about one-fourth the national average.
“It’s overdue to make sure that the ‘40 acres and a mule’ promise actually becomes real,” Bailey said. But despite major challenges and barriers he and other farmers of color have faced, Bailey is optimistic. He pointed to legislation that has been passed or that is in the works to support farmers of color both at the state and federal levels.
“Being the first commissioner of color in state history at MDA and starting to address these issues is a step in the right direction for all these barriers to even be addressed,” Bailey said.