A New Law Promised Debt Relief for Black Farmers. Instead, Some Got Collection Notices.

The American Rescue Plan included $4 billion in debt relief for farmers of color, but a lawsuit has thrown the program, and the farmers who need it, into limbo.

April Simpson

Norman Greer, 79, stands in a field of soy beans in the community of Lyles Station in Princeton, Ind. in 2016. (Photo by Bonnie Jo Mount/The Washington Post via Getty Images)

Editor’s Note: This article was originally published by the Center for Public Integrity, a nonprofit investigative news organization based in Washington, D.C.

After amassing more than $100,000 in debt over more than two decades of farming, a Georgia-based farmer named Denver got welcome news last year from the U.S. Department of Agriculture. Farmers like him would be eligible for a new debt relief program. USDA would pay off certain loans and give him a little extra for tax liabilities. 

Denver did not receive a payment. But almost a year later, he received another letter: A notice that USDA intends to take legal action to collect the money he owes the agency. Denver asked the Center for Public Integrity not to use his last name out of fear of retaliation. 

We know that institutional discrimination is systemic within USDA,” said Tracy Lloyd McCurty, executive director of the Black Belt Justice Center. So then the question is, how many other Black farmers around the country are experiencing this and they just don’t know who to reach out to about it?” 

How Denver and other farmers like him got here is a confusing mix of bureaucracy, policy choices and litigation. Farmers and advocates fear massive land loss and foreclosures if this legal muddle doesn’t get straightened out. Data the Center for Public Integrity received through a Freedom of Information Act request also suggests that the USDA violated its own promise to suspend debt collections during the pandemic.

As the year drew to a close, Denver and other farmers began receiving notices that USDA wanted to collect their debts. Some had liens put on their crops.

But we’ll start from the beginning.

In January 2021, USDA promised it would suspend debt collections, foreclosures and other adverse actions on borrowers with direct farm loans, made between the Farm Service Agency and the borrower, given the economic hardship posed by the Covid-19 pandemic. 

That decision was followed up by the American Rescue Plan Act. The new law included a $4 billion program to cancel certain farm loan debts farmers of color owe the Farm Service Agency, a USDA subagency that provides loans to agricultural producers. The law energized Black and other farmers of color who have long faced discrimination by the department, which has approved access to credit at lower rates and provided inequitable program payments than white farmers received. 

Eligible farmers such as Denver received notices from USDA that spelled out exactly how much it would pay to wipe out their debts, including 20% to cover tax liabilities.

As USDA prepared to implement the new law last year, eligible farmers were told they wouldn’t be punished for failing to make payments. So Denver stopped. 

But legal challenges from white farmers claiming reverse discrimination were filed in several states. Eventually a federal judge stopped USDA from implementing the program and allowed a class action lawsuit to proceed. 

That’s one of the most heartbreaking situations that I’ve observed in my 30-plus years as a lawyer working with farmers,” said Susan Schneider, director of the LL.M. Program in Agricultural and Food Law at the University of Arkansas School of Law. The USDA’s enjoined. They can’t really do anything.” 

Advocates and farmers including John Boyd, president of the National Black Farmers Association, say they’ve received little communication about the status of the debt relief program. Boyd said last July the White House promised a meeting with President Biden. Weeks ago, he requested another with USDA Secretary Thomas Vilsack, but neither has happened.

As the year drew to a close, Denver and other farmers began receiving notices that USDA wanted to collect their debts. Some had liens put on their crops and initially weren’t paid so that the funds could be used to pay their loans.

Why won’t they stop sending us papers if you done promised us they’re going to do something for us?” said Denver, a peanut and livestock farmer.

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The USDA announced Feb. 1 that it was required by law to send the notices and doesn’t intend to take any action that’s indicated,” Zach Ducheneaux, administrator of the Farm Service Agency, said in a video. That law, the Agriculture Credit Act of 1987, was designed to help borrowers learn about various loan-serving tools so that they can get out of financial trouble. Direct loan borrowers can expect another letter that more fully explains their loan servicing options, which they can exercise without having missed a payment.

USDA’s recent actions to provide clarity to struggling farmers is a step in the right direction,” U.S. Sen. Raphael Warnock, D-Ga., said in a statement to Public Integrity. Warnock alerted Secretary Vilsack to Georgia farmers facing potential adverse actions in a letter dated Dec. 10

Despite the attempts to clear up the confusion, the USDA letters have sowed confusion and distress among borrowers. 

It’s very confusing for the farmers, and they’ve needed a lot of information from our offices because they’ve been told one thing, and then they’re getting documentation that says another thing,” said Dãnia Davy, director of land retention and advocacy at the Federation of Southern Cooperatives/​Land Assistance Fund. It just hasn’t been very clear to farmers what their obligations are.”

The USDA’s suspension of debt collections, foreclosures and other adverse actions is expected to continue so long as the national Covid-19 disaster declaration is in place. But data the Center for Public Integrity obtained through a Freedom of Information Act request suggests that the department has continued to collect eligible debts. 

The USDA did not respond to requests for comment. 

Is USDA garnishing earnings?

The USDA offers two types of loans. Direct loans are made between the Farm Service Agency and the borrower. Guaranteed loans are made by a traditional lender but backed by the Farm Service Agency. Both programs are directed to borrowers that cannot get reasonable credit terms elsewhere. 

In January 2021, the USDA suspended debt collections and foreclosures on direct loans. It asked agency-guaranteed lenders to follow its lead, but they are not bound by USDA’s policy. 

Despite the suspension, the USDA collected about $538,000 in debts from Feb. 1 to Nov. 25, 2021, according to data the Center for Public Integrity obtained through a Freedom of Information Act request. About 16.1% of those funds were collected among people of color.

The USDA told Public Integrity it needed to clarify some of the data, but did not follow up with any information including a response to specific questions such as why debt offsets and wage garnishments appear to have continued after USDA announced their suspension.

Meanwhile, a coalition of groups representing farmers and ranchers of color is trying to learn whether farmers will see similar collections as a result of the debt relief program being on hold, but it’s a tough question to answer, Davy said. Based on conversations with USDA officials, she thinks they’re trying to be optimistic about the program still going forward.

I think they don’t want to concede any negative outcome pending the litigation,” Davy said. I think they’re hoping there’ll be some other ways to work around this case scenario of massive foreclosures and land loss.”

As for Denver, his next USDA loan payment is due in coming months. He’s going to restart payments even if they’re not required. He doesn’t want to fall further behind. 

I work too hard to get where I’m at,” Denver said. I’m not finna give these people my land because you done promised me something, and you don’t live up to your end of the bargain.”

This story was produced in partnership with the McGraw Center for Business Journalism at the Craig Newmark Graduate School of Journalism at the City University of New York.

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April Simpson reports on rural issues at Stateline. Before joining Pew, April was associate editor of Current, where she covered public broadcasting and nonprofit media. April was a Fulbright fellow in Botswana and Eastern Democratic Republic of Congo fellow with the International Women’s Media Foundation. She has written for the Seattle Times and the Boston Globe, among other publications. April is a graduate of Smith College and the London School of Economics and Political Science.
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