USDA fights in court to retain debt relief program

The Biden administration is struggling in court to preserve a key part of its racial equity agenda - $4 billion in debt relief for socially disadvantaged farmers and ranchers who have faced decades of discrimination in USDA lending programs. The government filed a 40-page brief Friday in a key case in Wisconsin brought by white farmers who contend the program violates the equal protection guarantee in the Constitution.

The white farmers are seeking a preliminary injunction to shut down the program while the case is considered. But the government's brief said an injunction  “would impose grave harms on minority farmers: those in bankruptcy proceedings would not get debt relief, those seeking future FSA loans will have their closings delayed, and those disproportionately at risk of foreclosure could lose their farms."

The government argues that the injunction also is unnecessary. Because the appropriated funds “are not limited and will not expire, plaintiffs can obtain any monetary relief they seek at the conclusion of this case if they are entitled to it," the brief said. 

U.S. District Judge William Griesbach issued a temporary restraining order June 10 that has halted any progress in getting payments to the targeted farmers and ranchers while the request for an injunction is being considered. The judge said the government had not been able to demonstrate “a compelling interest for the racial classifications” used to distribute the aid. 

The debt relief, which includes repayment of direct and guaranteed loans and an additional 20% to cover taxes for those payments, is targeted toward the following “socially disadvantaged” farmers and ranchers as defined by law: Black/African American, American Indian, Alaskan Native, Hispanic/Latino, Asian, or Pacific Islander. It does not include Caucasian women, and it is not capped; the $4 billion is an estimate.

Both Ag Secretary Tom Vilsack and House Ag Committee Chairman, Georgia Democrat David Scott, have roundly criticized the Wisconsin lawsuit and others filed throughout the country.

Scott, who previously characterized the lawsuits as “racist,” thanked Vilsack in a statement Monday for filing the brief. “This shameful lawsuit is racial discrimination at its worst against our nation’s Black farmers and socially disadvantaged farmers — and I do not say this lightly, because white farmers already own 98 percent of all the farmland in the United States and Black farmers own just one percent.” 

Vilsack, in remarks earlier this month to the Biotechnology Innovation Organization, said white farmers were not included in the debt relief legislation because “they've had the full access of all of the programs for the last 100 years.”

In addition to the Wisconsin litigation, USDA is facing similar challenges in six other such cases being litigated around the country, in Texas, Florida, Illinois, Tennessee and Wyoming, where the plaintiff is Leisl Carpenter, a white woman. A hearing on white farmer Scott Wynn's motion for preliminary injunction was held in Florida last week before U.S. District Judge Marcia Morales Howard, who could issue a ruling any day. Perhaps most prominently, Texas Ag Commissioner Sid Miller is suing, as well; Miller filed suit in his capacity as a private citizen, not in his official role. 

The National Black Farmers Association and Association of American Indian Farmers have filed amicus briefs supporting the government in Wisconsin, Texas and Florida.

In their Wisconsin filing, those groups said their members, “financially vulnerable farmers and ranchers, made plans based on their expectation that they would receive debt forgiveness based on the government’s legislation. Thus, in the event of an injunction, unlike plaintiffs, they would suffer real and palpable harms.”

The federal judge, however, said the government had not established that the debt relief program “targets a specific episode of past or present discrimination.”

“Defendants point to statistical and anecdotal evidence of a history of discrimination within the agricultural industry,” but they “cannot rely on a ‘generalized assertion that there has been past discrimination in an entire industry’ to establish a compelling interest,” he added, quoting a 1989 Supreme Court decision that found a Richmond, Va., minority subcontracting law violated the equal protection clause of the 14^th Amendment.

Aside from a “summary of statistical disparities, defendants have no evidence of intentional discrimination by the USDA in the implementation of the recent agriculture subsidies and pandemic relief efforts,” Griesbach said.

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But the government said minority farmers have experienced discrimination for decades and that the complaints they filed often languished and failed to remedy the wrongs. 

In its brief, the government said its “compelling interest in providing debt payments to [socially disadvantaged farmers and ranchers] is two-fold: to remedy the lingering effects of prior discrimination against minority farmers in USDA loan (and other) programs and prevent public funds from being allocated in a way that perpetuates the effects of discrimination.”

Brian Fitzpatrick, a law professor at Vanderbilt and author of The Conservative Case for Class Actions, told Agri-Pulse that “the government is allowed to use race-conscious measures to remedy its own past discrimination. That counts as a ‘compelling interest.’ The measures still have to be narrowly tailored, but they are allowed in theory.”

Minority farmers “have long experienced inequities in FSA’s administration of farm loans,” the brief said. The brief cited among other evidence a 1982 U.S. Commission on Civil Rights report, a 1997 report from a USDA “Civil Rights Action Team,” and testimony from a series of congressional hearings between 1999 and 2015. 

The brief also challenged the white farmers' assertion that the government had only cited “generalized allegations of discrimination within society and agriculture.”

“To the contrary, the government relied on myriad specific instances of prior discrimination within USDA’s loan (and other) programs and the lingering effects of that discrimination — including disparities in delinquency and foreclosure rates — to justify its remedial relief specific to those loan programs.”

For example, USDA cited evidence indicating that “nearly the entirety of USDA’s Market Facilitation Program (MFP) payments, … and almost all of the $9.2 billion provided through USDA’s first Coronavirus Food Assistance Program (CFAP), went to non-minority farmers.”

Republican critics of the debt relief, including senior House Ag Committee member Austin Scott of Georgia, have said the long-running Pigford class-action litigation, brought more than a decade ago over discrimination against Black producers, should have been sufficient to address the historic discrimination problem.

But Pigford did not solve the problems, USDA said. “Although USDA settled the lawsuits and has paid more than $2.4 billion to claimants, state taxes eroded recoveries, debt relief was incomplete, and reports before Congress have shown that the settlements did not cure the problems faced by minority farmers,” the brief said.

The Wisconsin plaintiffs are expected to respond to USDA's brief on Wednesday. 

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