Diversity or Discrimination: Farm Loan Forgiveness in the Inflation Reduction Act
Congress includes sections for loan forgiveness and educational grants with manipulative language to strategically discriminate based on skin color.
Back in the peak of the lockdowns when businesses were shut down, people were locked in their homes, and farmers were forced to dispose of a large portion of their crops and livestock due to severely decreased demand and abusive government policies, Congress passed a COVID-19 relief bill. This omnibus bill, which Congress called the “American Rescue Plan Act of 2021”, was a massive $1.9 trillion stimulus that had loads of provisions and hundreds of pages detailing how they would spend money. Obviously, this bill led to increased inflation down the road as Americans would see higher prices in nearly every normal good. But hey, it’s no big deal to add nearly $2 trillion to our federal debt and allow the Federal Reserve to gain more control over our monetary policy. It's good for us, right? Right?
Included in the bill was a provision titled “Emergency Relief for Farmers of Color”, sponsored by Senate rookie Raphael Warnock of Georgia. The phrase “socially disadvantaged farmers and ranchers” is used many times in the bill, presumably to attempt to obscure the fact that the bill was discriminatory in practice. This particular section of the bill was Sec. 1005 <> Farm Loan Assistance for Socially Disadvantaged Farmers and Ranchers, and included provisions such as:
(2) <> Payments.--The Secretary
shall provide a payment in an amount up to 120 percent of the
outstanding indebtedness of each socially disadvantaged farmer
or rancher as of January 1, 2021, to pay off the loan directly
or to the socially disadvantaged farmer or rancher (or a
combination of both), on each--
(A) direct farm loan made by the Secretary to the
socially disadvantaged farmer or rancher; and
(B) farm loan guaranteed by the Secretary the
borrower of which is the socially disadvantaged farmer
or rancher.
The entirety of the provisions that would lend “assistance” to socially disadvantaged farmers and ranchers would have provided a total of $4 billion for debt relief and an additional $1 billion for education and grants to these individuals and their farms.
White farmers and ranchers were understandably upset at these laws which did not provide equal benefits regardless of race, and in April 2021, a group of five white farmers from Wisconsin, Ohio, South Dakota, and Minnesota filed a lawsuit against the federal government. In the lawsuit, the farmers accuse the federal government of racial discrimination because they are not eligible to participate in the COVID-19 loan forgiveness program due to the color of their skin.
In the lawsuit, the plaintiffs argue that “Were plaintiffs eligible for the loan forgiveness benefit, they would have the opportunity to make additional investments in their property, expand their farms, purchase equipment and supplies, and otherwise support their families and local communities. Because plaintiffs are ineligible to even apply for the program solely due to their race, they have been denied the equal protection of the law and therefore suffered harm.”
It is interesting that the reasoning behind the loan forgiveness is the economic impact from COVID, which doesn’t have the capacity to pick and choose to affect any certain race of people more than any other, particularly in agriculture. One plaintiff from Calumet county, Wisconsin named Adam Faust said that “There should absolutely be no federal dollars going anywhere just based on race.” Despite the pushback from many farmers, the Department of Justice heard that a Wisconsin federal judge issued a temporary restraining order which halted the debt relief payments to minority farmers, and subsequently defended the USDA legislation.
Nevertheless, Congress persisted and eventually was able to pass into law the debt relief for minority farmers in their Inflation Reduction Act, which I discussed in a previous post. In the Inflation Reduction Act, the wording and semantics of the funding had been changed to deflect criticism, but it still has the same impact. Rather than calling it “Debt Relief for Farmers of Color”, they decided to call it “Assistance for Certain Farm Borrowers”, and still provides over $3.1 billion to borrowers with their operations at risk of failing.
This is a lot of tax dollars that Congress decided to put into legislation that actively excludes people of a certain race, but changing the syntax and vocabulary of the bill to obscure its meaning. Any law which clearly violates the Civil Rights Act of 1964, specifically banning discrimination based on the color of one’s skin, should be of utmost importance and undergo intense scrutiny. Initially, we saw that this legislation faced a lot of legal challenges in courts because its original wording was much more obvious in its intentions. However, in the final draft included in the Inflation Reduction Act, these programs received very little attention because it was jumbled into a word salad that made it much more difficult to understand the actions to be taken and the effects which those actions would ultimately have.
In the new provision, it sets aside the money for farmers who have historically been unserved or underserved, which does not explicitly ban white farmers and ranchers from receiving assistance, but in 2022, most people understand exactly what this language means. I am all for more people deciding to learn about the processes and maintenance required to grow food and raise livestock. Everyone, regardless of skin color, age, sex, religion, etc. should be able to start a farm if they so choose to, but when a certain group of people are given more access to incentives and benefits from the government solely due to the color of their skin, that is where the line should be drawn. I have never and will never support the imposition and enforcement of more restrictive laws that slowly whittle away at our freedoms, but it is blatantly illegal for the government to discriminate based on skin color.
Beyond the preferential treatment given to certain people in the “Assistance for Certain Farm Borrowers” section of the bill, there would inevitably be some other effects. I have no problem with farmers having the ability to be successful in their farming operation, but I don’t like that the government is giving assistance to the farmers. These loan forgiveness programs will probably have some catch on the backend. For example, in the student debt forgiveness up to $10,000 for anyone with student loans, many states are already discussing how they can tax that money that is marked off of people’s remaining debt, with Mississippi being the first. If student loan credit can be taxed, why can’t farm loan credit? Both of these loan forgiveness ventures are printing money and giving it to certain people, with this money almost certainly coming out of people’s taxes or will just be new money resulting in even more inflation.
Also, would this policy not increase division among racial groups? I am in no way in support of this divide, but would white farmers not have at least some animosity if their farmer neighbor gets a $50,000 farm loan forgiven while they still sit in $30,000 of debt? Every aspect of this loan forgiveness program raises questions, but it is not too surprising that something like this could be passed in Congress.
More recently, U.S. Secretary of Agriculture Tom Vilsack laid out multiple efforts at USDA to advance an “equity” agenda, including internal reviews of various equity issues at the department which brought about over 500 specific recommendations. In an online video conference on August 24th, he also announced an interim equity officer at the USDA to manage the oversight of the recommendations and revealed plans to hire a full-time chief inclusion officer to normalize the new equity plan.
It seemed like we were past racism in this country during these last few decades. It will never be nonexistent because there are just bad people that are alive, but our society has never been more accepting of people of all races until a few years ago. Then the tides turned. All of a sudden, it was completely acceptable, and even encouraged, to be openly racist again. Not just to white people, but also Asian-Americans. Harvard and other Ivy League schools are currently under investigation for discriminating against Asian applicants in favor of other minority groups.
In the 2020 general elections in California, Proposition 16 was introduced onto the ballot to repeal Proposition 209 (1996), which prevented the government and other public institutions from discriminating against or granting preferential treatment to persons on the basis of race, sex, color, ethnicity, or national origin in public employment, public education, and public contracting. This would have amended the California constitution to legalize discrimination once again, which has been illegal since 1964. Fortunately the California voters had enough sense (shocker, right?) to vote NO on this ballot measure.
Ibram X. Kendi says that “the solution to past discrimination is present discrimination, and the solution to present discrimination is future discrimination.” This is extremely divisive and hateful rhetoric, and is not the way to end racial discrimination. Then again, his goal isn’t to end racial discrimination, but to reverse it. The solution to past discrimination is not present discrimination.
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References:
https://www.congress.gov/bill/117th-congress/house-bill/1319/text
https://thedeadreckoning.substack.com/p/spoiler-alert-the-inflation-reduction
https://www.congress.gov/bill/117th-congress/house-bill/5376/text
https://www.farmprogress.com/farm-policy/usda-takes-new-approach-farmer-debt-relief
https://www.farmprogress.com/commentary/new-inflation-reduction-act-alters-black-farmer-relief
https://www.agdaily.com/news/covid-19-bill-includes-4-billion-debt-relief-black-farmers/
https://www.agdaily.com/news/department-justice-usda-debt-relief-black-farmers/
https://www.agdaily.com/news/group-white-farmers-sues-federal-government-racial-bias-debt-relief/
https://will-law.org/wp-content/uploads/2021/04/Vilsack-Draft-complaint-v12.pdf
https://www.justice.gov/crt/federal-protections-against-national-origin-discrimination-1
I am constantly surprised by a yet another ridiculous provision in the "Inflation Reduction Act" which will do everything but reduce inflation. Well written!