In March, Congress unveiled its American Rescue Plan Act, and along with many COVID-related relief programs was a promise to help redress America’s sordid history of discrimination, exploitation and slavery. This promise came in the form of the USDA’s $4 billion program to forgive outstanding loans to socially disadvantaged farmers and ranchers. Since then, producers have filed lawsuits in several states claiming that white folks are being racially discriminated against. The result is that this program is put on pause until those claims are litigated.
What exactly is happening? Why are lawsuits being filed? Let’s answer these questions by diving into the latest complaint in the United States District Court in Minnesota. In this instance, the plaintiffs include seven farm or ranch operations in Minnesota. The crux of their complaint is this: “Were the 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 the plaintiffs are ineligible to even apply for the program solely due to their race, they are being denied the equal protection of the law and therefore suffer harm.” In short, they have FSA loans too, and they want them forgiven, too.
Plaintiffs claim that the Due Process Clause of the United States Constitution requires equal protection under the law, and that where the government takes an action that does not provide equal protection (e.g. provides protection to only people of a specified race), that “strict scrutiny” will be applied. Under the strict scrutiny analysis, the government must show that there is a “compelling governmental interest” at stake and that the measures the law will take will be “narrowly tailored” to meet that interest. Basically, wherever there is a racial component of a law, the government must prove there is a really good reason for it and that it won’t cause harm to others.
The plaintiffs argue that this law was not narrowly tailored enough, and that it would harm the plaintiffs in that the they are ineligible to have their loans forgiven too.
While it is true that these and other white farmers would not be eligible for this loan forgiveness program, that misses the point of this legislation. The point of this legislation was to attempt to put socially disadvantaged farmers on more equal footing. Whether from the history of direct discrimination against minority farmers or from programs that passively resulted in fewer resources going to minority farmers, the law’s point is right past wrongs. The courts will now assess whether righting those wrongs is a sufficiently compelling governmental interest as well as whether the law is narrowly tailored enough to achieve its goal.
It remains to be seen what will happen in this Minnesota case. We do know that the legal argument has enough merit for judges in states including Florida, Wisconsin and Texas to issue temporary restraining orders or preliminary injunctions. This means that the USDA is prohibited from issuing loan forgiveness until the cases have been decided. There is a strong likelihood that the Minnesota court may come to the same conclusion.