$4 billion in debt forgiveness for minority farmers, ranchers
NEW ORLEANS (WVUE) - In June, the USDA will clear all FSA loan debts for minority farmers and ranchers. The $4 billion program is part of President Joe Biden’s $1.9 trillion American Rescue Plan Act.
“The fact that they are recognizing the issues and the challenges African American farmers, first-time farmers, have been having. I believe, my benefit is going to come as I do go in and apply for new loans for the FSA,” said farmer Christopher Muse. The recent retiree returns to his farming roots with his brother, “we want to be able to grow timber, Angus beef, sheep, lambs, goats, and chickens.”
On Monday, May 24 at a listening session organized by Southern University’s Agricultural Research & Extension Center, Congressman Troy Carter says the program will allow farmers to grow.
“[It’s] a time to level the playing field and create equity and opportunities for our black farmers. We know that the systems not always been fair,” said Rep. Carter. “We know that there’s not always been equity as it relates to African American farmers. Today is a step in the right direction. Much work is still to be done.”
The senior advisor for racial equity to the Secretary of Agriculture, Dewayne Goldmon, Ph.D. says to qualify, farmers or ranchers have to submit an AD2047 form. It identifies the applicant as a socially disadvantaged farmer. Applicants can do it online or through their local service centers, from there the relief is said to be automatic.
“I want you to understand that this is a debt payment,” said Goldmon. “This is not a compromise. This is not a write-down. This is not forgiveness. This is a debt payment which instantly makes you available to come right back in the door to apply for another FSA loan.”
“This will not fix everything but it’s a meaningful down payment,” said Cedric Richmond, Senior Advisor to the President of the United States.
But, three banking groups believe the programs will harm the banking industry. In a joint letter to Secretary of Agriculture Tom Vilsack saying, “if USDA does not compensate lenders for such disruptions or avoid sudden loan payoffs, the likely result will be less access to credit for those seeking USDA guaranteed loans in the future.”
Richmond says he does not find merit in the argument, “people pay off loans all the time. What a bank will do is take that paid-off loan, loan it to someone else and make the interest money. This is righting the wrong partly the banking industry played a part in. It’s important. I understand some of the concerns from the banking industry.”
For Muse, he says the fact the agency recognizes the inequity, gives him hope for his farm’s future.
The payments will cover up to 120% of outstanding debt for each socially disadvantaged farmer or rancher. It only goes towards FSA loans.
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