The Agriculture Department will no longer recognize groups such as African-Americans, Hispanics, Native Americans and women as “socially disadvantaged” and deserving of increased benefits.
In a final rule to be published in Thursday’s Federal Register, the department identified grant and loan programs where that designation would no longer apply. The list includes farm ownership and operating loans, the Rural Economic Development Loan and Grant Program, the Rural Energy for America Program, the Rural Microentrepreneur Assistance Program, and Rural Business Development Grants.
The department said it was making the change based on a court decision from Texas last year in which a judge preliminarily enjoined disaster assistance payments calculated using race- and sex-based preferences.
According to a 2019 Farm Service Agency fact sheet, FSA defines a “socially disadvantaged” farmer or rancher as belonging to a group “whose members have been subject to racial, ethnic, or gender prejudice because of their identity as members of a group without regard to their individual qualities. These groups consist of American Indians or Alaskan Natives, Asians, Blacks or African-Americans, Native Hawaiians or other Pacific Islanders, Hispanics, and women.” A separate definition used by USDA does not include women.
New regulations for the programs continue to include preferences for beginning, veteran and "limited resource" farmers.
The move is in line with the Trump administration’s overall policy of rooting out all vestiges of “diversity, equity and inclusion” programs. It’s also in stark contrast to efforts at USDA under the Biden administration, when Secretary Tom Vilsack stood up an Equity Commission that recommended ways to address historical discrimination by the agency.
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The current administration says in its rule that “past discrimination has been sufficiently addressed and that further race- and sex-based remedies are no longer necessary or legally justified under current circumstances.”
“The USDA has faced a long history of litigation stemming from allegations of discrimination in the administration of its farm loan and benefit programs,” the rule says. “However, over the past several decades, USDA has undertaken substantial efforts to redress past injustices, culminating in comprehensive settlements, institutional reforms, and compensatory frameworks.”
Legal settlements and legislation “collectively reflected a broad institutional effort to correct past practices and ensure equitable access moving forward,” USDA said.
“Over the years, USDA has acknowledged and confronted its history of discrimination in the administration of federal farm loan and benefit programs through a series of lawsuits brought by minority and female farmers,” the rule says. “Courts and Congress have examined claims of disparate treatment and unequal access to credit and services. These proceedings have resulted in landmark settlements, meaningful reforms, and the disbursement of substantial compensatory relief.”
Farmers have continued to sue over race-based preferences. A Wisconsin dairy farmer last month filed a lawsuit challenging the use of preferences for women and minority farmers.
Adam Faust cited the loan guarantee program, under which minority and women farmers can get a 95% loan guarantee, while he is eligible for 90%. He also said he is eligible for reimbursement of 75% of his costs to build a manure storage system, while minority farmers can get 90%.
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