18-03-2025
USDA Promised Loan Relief, Then Repealed It. Black Farmers Are Fighting Back
Lester Bonner purchased a tractor, hay baler, and two hay combines for his 113-acre wheat farm when he learned he'd have $50,000 of his loans wiped clean as a result of a debt relief program from the U.S. Department of Agriculture.
Many more farmers invested in their farms in anticipation of the forgiveness of loans administered by the USDA's Farm Service Agency.
However, they never received it.
Bonner and three Virginia-based farmers of color are suing the U.S. government, which they say broke a contract in 2022 by repealing a $4 billion debt relief program, putting them at risk of losing their farms and livelihoods. The government is arguing that there was no contract.
In February, the U.S. Court of Appeals for the Federal Circuit heard oral arguments in the case.
The farmers — John Boyd Jr., president of the National Black Farmers Association; Kara Boyd, founder of the Association of American Indian Farmers; Bonner; and Princess Williams — appealed their class-action lawsuit after a previous judge dismissed their claims two years ago. They are hoping the federal appeals court reverses course, deciding that the U.S. Court of Federal Claims erred in its decision.
In the lower court ruling, Senior Judge Edward J. Damich for the Court of Federal Claims said there wasn't an expressed or implied-in-fact contractual agreement between the farmers and the federal agency.
'Instead, the program reflects Congress' intent only to 'declare a policy to be pursued until the legislature shall ordain otherwise,' not an intent 'to create private contractual or vested rights,'' Damich wrote.
The original loan forgiveness program at the center of the complaint was part of the American Rescue Plan Act, offering up to 120% of the outstanding indebtedness to address historical inequities and funding disparities by the USDA. The program targeted socially disadvantaged farmers and ranchers, which included Black, Hispanic, Native American, and Asian groups. More than 14,000 farmers received letters from the USDA between May and September 2021, Reuters reported.
Williams, one of the plaintiffs in the case, rented tree-planting machinery, bought and planted apple trees, and fixed the heating system in her farmhouse, according to the lawsuit. She took out new loans because she expected her debt would be forgiven.
'We did not receive that money and now, it's putting us in a total financial bind,' she said at a news conference in Washington.
Capital B has reached out to both parties, but has not heard back.
The Boyds, who are married, have litigated discrimination claims for years. They lobbied the U.S. government to provide relief for the discrimination they, along with other farmers of color, faced. According to court filings, they say they made offers to government officials — such as the U.S. Sen. Cory Booker and then-President Joe Biden — that they would stop their discrimination lawsuits if they provided relief in the American Rescue Plan to socially disadvantaged farmers who suffered injustice at the hands of the USDA.
However, multiple nationwide injunctions — as a result of white farmers suing for reverse discrimination — hindered the disbursement of funds. Congress repealed the program and replaced it with a $2.2 billion Discrimination Financial Assistance Program, which provided assistance to 43,000 farmers — of all racial backgrounds — who experienced discrimination prior to 2021.
Boyd Jr. described the victory as 'historic' for all Black farmers.
However, he told Capital B in May 2023 that '[The Biden administration] just abandoned us, left us out there high and dry,' in reference to the elimination of the original debt relief.
Read More: The USDA Is Finally Paying Back Black Farmers. Some Say It's Not Enough.
The decision caused Bonner, who lives paycheck to paycheck, to struggle to pay for basic necessities for running his farm. Williams also cannot pay her bills and fears that she and her children will lose their 73-acre farm.
These farmers represent 'thousands of hardworking farmers who have been devastated by the government reneging on its obligation to pay off their [Farm Service Agency] loans,' Nada Djordjevic, counsel for the farmers, told the panel of judges on Feb. 5.
She argued that the federal government was legally obligated to pay off the loans. Prior to the elimination of the program, they entered into binding agreements by selecting option one FSA-2601 form, which states the farmer accepts the terms and conditions of the loan repayment offer and to apply it to their direct loan or debt.
'Congress cannot eliminate liabilities that have already been incurred,' she testified. 'The language in the Inflation Reduction Act that repealed section 1005 simply said the section is repealed. It didn't say anything about extinguishing any existing rights.'
Douglass Edelschick argued on behalf of the federal government that the 2601 form was only an 'informational notice, not a contract' to process the request for payment. He claimed that there's nothing in the ARPA legislation that 'gives any indication, much less a clear indication, that the government intended to contract in exchange for payments' in the program.
'The plaintiffs are the customers who returned that informational notice, the 2601 form, with their request for pay under this program that, unfortunately, could not be fulfilled,' he said.
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