Emergency debt relief for farmers of color promised in the American Rescue Plan Act (ARPA) has been stalled since June 2021 and has now been entirely replaced with a race-neutral alternative in August’s Inflation Reduction Act (IRA). This pathway avoids a mess of lawsuits but risks hollowing out the core objective of addressing past wrongs.
The original ARPA debt relief was explicitly earmarked for any Black, Hispanic, American Indian/Alaskan Native, Asian, or Pacific Islander farmer (“socially disadvantaged” in USDA parlance). There is no doubt that BIPOC farmers are at a dramatic financial disadvantage due in large part to the USDA’s admitted historical intentional discrimination. The USDA settled Pigford v. Glickman in recognition of racial discrimination against black loan applicants in 1999. However, nearly one-third of claimants were denied relief. A second lawsuit led to appropriating funds to expand relief, but not until eleven years later, in 2010. The number of foreclosures and lost land wealth while black families waited for restitution is unknown, but a recent study calculated that due in part to Pigford payment delays, black farmers lost $326 billion worth of land over the 20th century.
This is the problem the ARPA sought to address. The way the law was written, race was not a mere consideration in whether debt relief would be offered but was a determinative factor. BIPOC farmers paying off land loans were allocated four billion dollars. ARPA awardees were even sent letters saying they could stop making loan payments, but once that funding was stalled, those letters became broken promises. Because race was a determinative factor in loan forgiveness recipients, the structure made ARPA’s policy vulnerable to constitutional equal protection assaults.
These assaults didn’t take long to have impact; before the first payments went out, a Florida judge issued an order that stopped payments under the BIPOC relief program across the US. IRA’s move to repeal and replace ARPA’s attempt at relieving the burdens on BIPOC farmers all but announces the Biden administration’s belief that they would have lost the suits piling up against ARPA. Cracks in the administration’s confidence started to show when the DOJ declined to appeal any of the three court orders that stalled ARPA’s first payments. As the Federation of Southern Cooperatives puts it, the IRA’s solution is a way of “Congressionally conceding defeat.”
The IRA’s new rules open loan forgiveness and aid to “economically distressed farmers” of any race to a lesser $3.1 billion. In addition, $2.2 billion has been set aside for farmers that have been discriminated against, but those funds are only for those who can prove the discrimination.
All in all, the IRA sets out to provide aid to a broader group of people with 1.3 billion dollars more in its coffers. While advocates feel the turn away from redressing past racial harms hollows out its core, the shift has a strategic objective. Legislation seeking to address past wrongs preferential to one racial group over another must survive what courts call strict scrutiny. To do this, the law must serve a compelling interest and be narrowly tailored to that cause. It is a tall order to meet this standard.
ARPA likely wasn’t written narrowly enough to meet this standard, especially with our current Supreme Court. Instead of trying to fight the lawsuits and risk legal precedent that could impact other standing laws, like affirmative action protections, the Biden administration chose a different tactic.
The passage of the IRA will certainly “break the logjam” created by ARPA lawsuits and the government’s lack of response. Some BIPOC farmers will get loan relief. Many are skeptical that the full 17,000 farmers initially promised ARPA relief would receive the IRA funds. There is no certainty yet about how farmers will “prove” discrimination for the distribution of the 2.2 billion dollars. However, based on our legal system, we know the bar will be set high, and proving discrimination will be difficult. The payments for this portion of the bill are also capped at $500,000.00.
Whether the IRA is able to reach some of the goals set by the previous ARPA scheme is yet to be seen, but it is widely accepted that at least no one will be suing to stop IRA payments. The money can flow; it is now up to the government to make sure it flows to those who most need and deserve it. On this point, we will have to remain, as the Rural Coalition says, “cautiously optimistic.”