Discrimination relief payments begin as some Black farmers ask courts to include heirs in program

(CNN) — The Biden administration is sending out millions of dollars in relief checks to farmers who have faced discrimination, just ahead of an emergency request at a federal court to temporarily pause the process.

President Joe Biden and the White House are touting the payments to over 43,000 people as part of an effort to address inequity in farm loan programs, which data obtained in a CNN Freedom of Information Act request reveal has persisted for Black farmers especially.

“Farmers and ranchers work around the clock to put food on our tables and steward our Nation’s land,” Biden said in a statement Wednesday. “But for too long, many farmers and ranchers experienced discrimination in farm loan programs and have not had the same access to federal resources and support.”

But the long-awaited payments come amid a backdrop of a group of Black farmers who have sued, saying the Discrimination Financial Assistance Program should be open to applicants filing on behalf of their deceased relatives who faced discrimination.

The Black Farmers and Agriculturalists Association, which says it has over 20,000 members, lost at a federal district court. It’s currently asking the 6th US Circuit Court of Appeals to pause the relief payment process and reconsider the lawsuit – before the program runs out of money.

“We are asking … that the Department of Agriculture discontinue its attack of discrimination against the African American community, particularly African American farming and ranching community and their subsequent heirs,” BFAA President Thomas Burrell told CNN.

“Fairness as it relates to the receipt of services to include loans and credit. And we’ve had to demand that in the form of lawsuits,” he added.

One argument the farmers’ association is using is from a major new Supreme Court decision that overturned a 45-year-old precedent governing how federal courts interpret executive agency actions.

In June, the Supreme Court ended a legal doctrine known as “Chevron” – named after a 1984 case – that instructed courts to defer to an agency’s interpretation of a law when the statutory language is ambiguous. The high court’s majority opinion said that judges should exercise “independent judgment” in assessing whether an agency regulation complies with the relevant statute.

As a result, the farmers’ association says the trial judge incorrectly relied on a “discredited” standard of review and that the appeals court should examine what the USDA is doing.

This is one of the first major tests of how federal courts will interpret the new Supreme Court ruling, especially as it applies to previous decisions made while the Chevron doctrine was in effect. (The district court ruling in this case was made in early 2024.)

The USDA has declined to comment on the lawsuit.

Much needed payments for farmers of color

More than 23,000 people will receive payments between $10,000 and $500,000, according to the USDA. Over 20,000 farmers and ranchers who planned to have a business but couldn’t receive a loan will receive $3,500 to $6,000.

In July 2023, the USDA announced it started accepting applications for financial relief of up to $500,000 for farmers who have faced discrimination in its lending programs, with a deadline of that October. (It was later extended to January 2024.)

The discrimination relief funds are available to “farmers, ranchers, and forest landowners who experienced discrimination by USDA in USDA’s farm lending prior to 2021.”

There is also concern among some Black farmers that if the court were to pause the payment program, it would harm the very people waiting for relief from the federal government.

John Boyd, Jr., president of the National Black Farmers Association, told CNN the inclusion of heirs is a “reparations issue that should be looked at by the courts,” but said he didn’t want the program blocked in the meantime.

“It’s good that the payments are going out to needy Black farmers and families. The law was clear on who was going to be eligible in that process for farmers,” Boyd told CNN. “It’s timely, but we still want our 120% debt relief.”

Current USDA record on loans is lacking

CNN previously reported that direct loan rejections for Black and Asian farmers increased significantly under the Trump administration in 2020 and the first partial year of the Biden administration through 2021.

Exclusive USDA data obtained by CNN through a follow-up Freedom of Information Act request shows that rejection rates for Black farmers continued to climb, peaking in 2022.

Nearly half of Black applicants were rejected for loans provided directly by the USDA in fiscal year 2022. Loan rejection rates fell to 43% for Black farmers in 2023, but remained much higher than those for other racial groups.

Rejection rates for Asian/AAPI farmers fell to 13% in 2023, just slightly above the overall rejection rate of 9% for all direct loan applicants. Only 7% of White farmers were denied loans in 2023.

Direct loan rejection rates for Black and AAPI farmers continued to be higher than for other racial groups for the first half of fiscal year 2024, through April 1, though the USDA is likely to continue to receive and evaluate more applications.

A spokesperson for the USDA said the department “has been working hard to dismantle systemic barriers to accessing loans” and is “assessing application trends, particularly of historically underserved customers.”

“Analysis of this data has helped inform changes that have been enacted such as an online loan application, a new loan assistance tool, a simplified application process, and more,” the spokesperson told CNN.

CNN’s Devan Cole, Betsy Klein and Tierney Sneed contributed to this report.

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