IMPORTANT: Inflation Reduction Act - Legislating Broken Promises to Black Farmers

FOR IMMEDIATE RELEASE

Inflation Reduction Act/Legislating Broken Promises to Black Farmers

EAST POINT, Ga. - Last year, our government promised 17,000 Americans, 3,100 of whom were Black, emergency debt relief, to address the unique governmental interest in mitigating the disproportionate debt burden facing America's farmers and ranchers of color resulting from long-standing, race-based discrimination in agricultural lending practices especially against Black farmers. No sooner had American Rescue Plan Act (ARPA) Section 1005 passed, before groups of White farmers challenged the Constitutionality of the provision. These legal challenges resulted in the indefinite delay in the implementation of the government's narrowly tailored solution to the unfair burden of racial discrimination that not even a global pandemic could slow or halt.

On behalf of its membership of Black farmers, the Federation intervened as a party in the debt relief litigation, asking the Court to reinstate the implementation of Section 1005 to help the government keep yet one more promise to Black farmers and ranchers. Unfortunately, as passed by the Senate, the Inflation Reduction Act (IRA) threatens to render this litigation moot thereby preventing us from ever knowing how the Court would interpret this critically necessary program.

Ultimately, if passed, the IRA will become heralded as an overwhelming victory in the fight for medical consumers and our environment. While these aspects of the law should be lauded, they unfortunately come with yet another broken promise to America's Black farmers.

As passed by the Senate, the IRA repeals ARPA Section 1005, thereby Congressionally conceding defeat on one narrowly tailored solution to the government's purported interest in reducing the economic harms of race-based discrimination in agricultural lending and pandemic relief. Instead, this promise has been repealed and replaced with two programs that again ask Black farmers to trust in promises that have heretofore remained untrustworthy.

As alternatives to the ARPA debt relief program, the IRA appropriates $3.1B for loan modifications for “distressed” direct and guaranteed borrowers “whose agricultural operations are at financial risk” and $2.2B for “discrimination financial assistance” to NGOS to provide financial assistance of up to $500K for “farmers, ranchers or forest landowners determined to have experienced discrimination prior to January 1, 2021.” Unfortunately, the Senate, does not establish priority in either program for the 17,000 farmers and ranchers who received letters from their government promising debt relief. Thus, despite being guaranteed that no adverse action would result from nonpayment of loans promised to be forgiven, these borrowers remain imminently vulnerable to foreclosure.

Dania Davy, Director of Land Retention & Advocacy of the Federation stated,

"The IRA's loan modification process provides an unsatisfactory alternative for the farmers promised debt relief last year. First, it offers loan modifications for ‘distressed’ borrowers which could be interpreted to exclude farmers who are ‘delinquent’ – including the 17,000 farmers who were told they did not need to make payments on the loans that would be forgiven under ARPA Section 1005 who now face daily threats of foreclosure. Further, the apparent discrimination claims process shifts the burden of addressing racial discrimination from institution to individual and after what we learned from the Pigford, Keepseagle and Garcia settlement processes, we are deeply concerned about the difficulties Black farmers will face in accessing these resources."

Expressing deep frustration, Cornelius Key, member-farmer, and GA State Coordinator for the Federation emphasized, "Black farmers were really counting on that debt relief and we if we don’t receive debt relief many of us will lose land, equipment and we might just lose our homes – this is a matter of survival.”

The Federation is actively engaging our members, partners, Congress, and the Administration in seeking accountability and transparency in the loan modification and discrimination claims processes outlined in the IRA. However, we remain committed to supporting and advocating for Black farmers, landowners and cooperatives and continuing to stand with the 3,100 Black farmers as well as the 17,000 farmers of color promised debt relief last year. This new threat to debt relief promised to Black farmers and other farmers of color is just a modern-day example of the many political compromises that, ultimately, betray the hopes of Black farmers. The Federation will continue to work to protect these farmers from losing their farms, land, and livelihoods.

Executive Director Cornelius Blanding commented, "Though disappointed, that we may never know how the Court would have interpreted debt relief under Section 1005 and the constitutionality of targeted race-based programs designed to achieve racial equity we must continue the Federation’s 55-year legacy which we will commemorate at our Annual meeting next week and ensure the implementation of the programs under the IRA will not leave Black farmers out."

The Federation of Southern Cooperatives/Land Assistance Fund is a 55-year-old cooperative association of black farmers, landowners, and cooperatives.

Our mission is to be a catalyst for the development of self-supporting communities through cooperative economic development, land retention, and advocacy. We envision sustainable rural communities supported by a network of farmers, landowners, and cooperatives based on local control and ownership.

The Federation/Land Assistance Fund is a membership-based organization that assists limited resource farmers, landowners, and cooperatives across the Southern region with business planning, debt restructuring, marketing expertise, and a whole range of other services to ensure the retention of black-owned land and cooperatives as a tool for social and economic justice.

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