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Racial Discrimination Lawsuit Against Federal Debt Relief Program Dismissed

More than a year after five white farmers sued the USDA, the two parties agreed to terminate the case.

A lawsuit challenging a federal debt forgiveness program for socially disadvantaged farmers and ranchers, including Black farmers, was dismissed after passage of the Inflation Reduction Act, which replaced the loan program with one that doesn’t mention race. (Scott Olson/Getty Images)

The class-action lawsuit brought by a group of white farmers alleging that a federal debt relief program racially discriminated against them has been dismissed.

Five white farmers sued the U.S. agriculture secretary last year to challenge the constitutionality of a $4 billion debt forgiveness program that targeted socially disadvantaged farmers and ranchers, including Black farmers. The lawsuit has halted the debt relief payments to Black farmers for more than a year.

All parties agreed to dismiss the lawsuit in response to President Joe Biden signing the Inflation Reduction Act, the historic climate legislation that replaced the loan forgiveness program with a similar plan that doesn’t mention race.

According to court records, the parties agreed “to dismiss this action without prejudice,” saying that the constitutional challenge to the debt relief program “is moot.”

The original loan forgiveness program passed in March 2021 as part of the American Rescue Plan, offering up to 120% of the value of loans administered by the Farm Service Agency specifically for farmers and ranchers of color. 

Two months later, the U.S. Department of Agriculture announced that loan payments to eligible borrowers would begin in early June. However, a judge issued a restraining order on the program in response to the white farmers’ lawsuit.

John Boyd Jr., president of the National Black Farmers Association, told Capital B in August that he was disappointed that Black farmers didn’t get the relief they deserved.

“You have white farmers suing Black farmers to stop them from getting aid that they’ve been trying to get for over three decades,” Boyd Jr. said. “[White farmers] were getting debt relief with ease. And Black farmers like myself weren’t.”

Rather than implement the existing loan forgiveness program, the Inflation Reduction Act replaced it with assistance for a broader group of “distressed borrowers.” 

The act provides $125 million for technical assistance regarding food, agriculture, and agricultural credit to underserved farmers, ranchers, or forest landowners, including those living in high poverty areas. Another program provides $2.2 billion for farmers who have experienced discrimination prior to January 2021 by the Agriculture Department’s farm lending programs. Recipients can receive up to $500,000 each. 

Dãnia Davy, director of land retention and advocacy for the Federation of Southern Cooperatives, criticized the repeal of the original program.  In an interview last month, she told Capital B that Black farmers who shared their difficult experiences of discrimination in the litigation process “were exposed” and didn’t foresee Congress removing the program altogether. 

The Federation of Southern Cooperatives joined the lawsuit as an intervenor on behalf of Black farmers. 

“Engaging folks and making these promises and telling them about these government programs that their government is promising them, only to have those hopes dashed, is very demoralizing to our rural communities,” she said. “It’s just unfortunate that in this process, [Black farmers] were locked out by their government.”