The legal limbo has created unexpected new financial strains for black farmers, many of whom have been unable to invest in their businesses due to continued uncertainty about their indebtedness. It also poses a political problem for Mr. Biden, who was thrust into power by black voters and must now deliver on his promises to improve his fortunes.
The law was intended to help address years of discrimination faced by non-white farmers, including the theft of land and the rejection of loan applications by banks and the federal government. The program has provided assistance to approximately 15,000 borrowers who receive loans directly from the federal government or whose bank loans are guaranteed by the USDA. Native to Alaska, Asian American, Pacific Islander, or Hispanic.
After the initiative was launched last year, it met with swift opposition.
The banks were unhappy that the loans were repaid early, depriving them of interest payments. White farm groups in Wisconsin, North Dakota, Oregon and Illinois have sued the Department of Agriculture, arguing that offering debt relief based on skin color is discriminatory, suggesting that a successful black farmer might see his debts wiped out while a struggling white farm might go out of business. America First Legal, a group led by former Trump administration official Stephen Miller, filed a lawsuit arguing a similar argument in U.S. District Court for the Northern District of Texas.
Last June, before the money started flowing, a federal judge in Florida blocked the program on the grounds that it applied “strictly on racial grounds,” regardless of any other factors.
The delays angered black farmers whom the Biden administration and congressional Democrats were trying to help. They argue that the law was poorly drafted and that the White House is not defending it forcefully enough in court for fear that a legal defeat will undermine other race-based policies.
Those concerns became even more pronounced late last year when the government sent thousands of letters to minority farmers who were behind in repaying their loans, warning them they risked foreclosure. The letters were automatically sent to all borrowers in default on their loans, including around a third of the 15,000 socially disadvantaged farmers who applied for debt relief, according to the Agriculture Ministry.
Leonard Jackson, a cattle rancher in Muskogee, Okla., received such a letter despite being told by the USDA that he did not need to repay his loan because his $235,000 debt would be paid off by the government. . The letter was shocking to Mr Jackson, whose father, a wheat and soybean farmer, had seen his farming equipment seized by the government years earlier. The prospect of losing his 33 cows, house and trailer was unfathomable.