Historic Debt Relief and Other Assistance for Black Farmers and Farmers of Color
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This month brought historic federal legislation aimed at addressing systemic discrimination and assisting black farmers and farmers of color throughout the United States. The American Rescue Plan Act of 2021 (the Act) was signed into law earlier this month by President Biden. In it, Congress provides debt relief to socially disadvantaged producers including Black/African American, American Indian or Alaskan native, Hispanic or Latino, and Asian American or Pacific Islander. It also provides grants, training, education and other forms of assistance aimed at helping minority farmers, ranchers, and forest land owners and operators acquire or secure land. Keep reading to find out more.
The Act provides $3.7 billion to provide payment of up to 120% of the outstanding debt of “each socially disadvantaged farmer or rancher” who had a direct or guaranteed loan or a Farm Storage Facility loan as of January 1, 2021. The payments, which are to be made “to pay off the loan directly or [made] to the socially disadvantaged farmer or rancher (or a combination of both),” include money to pay any taxes that might be owed when the loans are retired.
The Act also includes $1.1 billion to fund support programs for minority farmers, ranchers, and forest land owners and operators, including technical assistance, education, extension and financial assistance. At least five percent of the funds must be used to provide grants and loans to improve access to land and to address heirs’ property issues. In addition, at least 5 percent of the funds also must be used to provide financial assistance to socially disadvantaged farmers, ranchers, or forest landowners who were farm loan borrowers in the past and who suffered adverse actions or past discrimination or bias in USDA programs. The funds will also be used to establish a commission to address racial equity issues at USDA and to provide financial support for research and education at historically Black colleges and land grant universities, Tribal colleges and universities, Native Alaskan- and Hawaiian Native-serving institutions, and Hispanic-serving institutions.
The USDA is drafting the rules and regulations to implement the Act, including how to handle any pre-payment penalties that might pop up when the loans are paid off. More guidance will be coming from the agency. But, here’s what we know so far:
Who Qualifies for the Debt Relief?
The debt relief is for (1) any socially disadvantaged person who (2) already has a direct or guaranteed farm loan or a Farm Storage Facility Loan. “Socially disadvantaged” is defined as any person who is Black/African American, American Indian or Alaskan native, Hispanic or Latino, and Asian American or Pacific Islander. There are no other requirements. It does not matter how much you owe or whether you’re behind in your payments. Any socially disadvantaged borrower with direct or guaranteed farm loans as well as Farm Storage Facility Loans qualifies.
How Will USDA Know Who Qualifies for the Debt Relief?
Producers who have a direct or guaranteed farm loan or a Farm Storage Facility Loan will likely have worked with USDA’s Farm Service Agency in the past and the agency will have their ethnicity and race on file. A borrower, including those with guaranteed loans, can contact their local their local USDA Service Center to verify, update or submit a new ethnicity and race designation using the AD-2047 form. You can find your nearest service center at farmers.gov/service-locator.
You can read the USDA’s announcement about the Act here. And keep watching this blog for updates and more information, and to learn when and when and how you can make comments on the rules USDA proposes, as well as when you’ll be able to apply for the programs.