After a last-ditch lawsuit is filed in Texas, Black farmers wait to learn the fate of USDA’s imperiled debt relief program

“We would like for the judge to hear directly from our member farmers how much the delayed implementation of Section 1005 is impacting them. I don’t think that’s something that is realized in a real way. This will cause farm and land loss for many of the farmers as well as the declarants involved in our motion to intervene,” said Briar Blakley, a spokesperson for the Federation.

It’s a rare move for the advocacy group. If its motion is granted, the Federation of Southern Cooperatives would become an equal party to the suit, making them co-defendants in the case. This means they would be able to participate in discovery, securing evidence and verbal or written statements from witnesses to present in court. 

“The decisions that [USDA] made not to appeal were strategic,” said Dãnia Davy, director of land retention and advocacy at the Federation. “Our situation, being an association of cooperatives and having a membership that’s predominantly Black farmers, gives us the opportunity to have a lot more access to a lot more evidence through our members’ experiences than [USDA] would be privy to, necessarily. We thought that our evidence would strengthen their ability to defend.”

The six farmers named in the motion are only a handful of the group’s many members who are eligible for loan forgiveness under Section 1005, some who carry substantial debt and have built their future farm plans—making arrangements for equipment, seeds, livestock, and fertilizer—in anticipation of impending debt relief. 

Batten, a member of the Federation but not one of the six declarants, has been unable to farm at his usual scale for the past two years due to outstanding debt with a USDA-guaranteed lender. Those arrears pushed him to the brink of foreclosure, forcing him to file bankruptcy to prevent bank seizure of 201 acres of his land. While he would typically farm up to 800 acres a year of peanuts, cotton, corn, wheat, and soybeans on a combination of owned and rented land, this year he is farming just 37 acres of soybeans. He rents those acres from a local farmer, while renting out his own land to others so he can pay down his debt. 

Batten said that because his direct loan funds from FSA, which were needed at the start of planting season in January, typically arrived late—in April, May, or sometimes June—he was forced to seek guaranteed loan funding at a higher interest rate from an outside lender. In his case, it was the Bank of Dawson, a small local lender in Dawson, Georgia, about 25 miles from his farm. 

“There were many times where the banker would be very pessimistic. … A particular banker I was working with told me several times that I’d never be able to buy land,” said Batten. 

He was wrong. But not long after he secured his farm in 2015, Batten said, he began experiencing problems with the bank. 

“Once I purchased the land, after that I never got a [guaranteed] loan in January, February, or March. My loans were always after that. In April, May or June,” he said. This, again, delayed his ability to plant his crops on time and jeopardized his ability to run a successful farm operation. 

Eventually, Batten fell behind on his loan payments to the Bank of Dawson, and sought financial help from his father, who attempted to pay off his outstanding balance. Batten said the bank agent refused the payment but gave no explanation, saying only that the company no longer wanted to do business with him. The bank then accelerated his 25-year term loan, demanding full payment or forfeiture of his land. 

The Federation and its lawyers argue that the interests of members like Batten differ greatly from those of Secretary Vilsack and USDA. 

“What’s missing in the narrative about this is the actual discrimination against Black farmers that led us to this point in the first place,” said Winston & Strawn attorney Kobi Brinson, a partner in one of several firms representing the Federation in its attempt to intervene. “The discrimination against Black farmers is so pervasive, so deep, and has caused such a negative financial impact that it is virtually impossible for the USDA to tell that story itself because it’s a part of that same system.”

Some legal experts contend that USDA faces a slim chance of advancing the current debt relief program as it stands without jeopardizing other government programs that seek to remedy past discrimination. The current makeup of the Supreme Court, should the case go so far, does not seem favorable to a win and could put in question the constitutionality of adjacent policies such as affirmative action. 

“I don’t think any of us are delusional about the uphill battle that this poses, but it’s important to make sure these farmers’ stories aren’t lost in the discussions. These are real people we’re talking about, and these are real consequences,” said Brinson. 

The lawsuit filed on April 26 is currently pending in the Northern District of Texas. Under that jurisdiction, any party opposed to a motion may file a written response in 21 days. Lawyers for the Federation would then have 14 days to file a reply. As it stands, any opposed party must file a response to the Federation’s October 12 motion to intervene by November 2, giving the Federation until November 16 to respond. After that, the court could rule at any time. It could also order oral arguments before issuing its ruling, said Winston & Strawn attorney Chase Cooper. He estimates that U.S. District Judge Reed O’Connor may issue a ruling on the motion in late November or early December. 

With USDA’s hands tied on administering the program, Democrats in Congress are attempting to amend ERFCA, replacing it with an $11 billion program that would provide debt cancellation to “at risk” and “economically distressed” farmers, as revealed in a document leaked earlier this month by the House’s Agriculture Committee Republicans. Broadening the bill’s language would mean that the new designations would also apply to white farmers who have not suffered the same longstanding discrimination. 

While USDA said it was working with DOJ to “vigorously defend” Section 1005, the department said the new text could position the department to reach more underserved debt-holders. 

“The language on debt relief in the reconciliation bill offers improvements to the original text of the American Rescue Plan Section 1005. These new provisions will provide more robust tools that allow USDA to deliver advanced resources to underserved borrowers. With the passage of this reconciliation bill, USDA will be positioned to serve a broader segment of our most vulnerable borrowers,” said USDA press secretary Kate Waters. 

Should the reconciliation bill pass, it could supersede the measure passed in March, leaving it up to the Miller v. Vilsack plaintiffs and the court to decide whether to drop the suit or determine it moot. But that also raises concerns. Namely, the measure’s language does not currently apply to USDA guaranteed loan debt held by third-party lenders like the Bank of Dawson where Batten owes six figures. In other words: It’s unclear who would be eligible for debt relief.

“We are definitely concerned about farmers and ranchers of color who may or may not be included depending on the criteria for receiving the debt relief under the current reconciliation bill, as well as the fact that guaranteed loans have not been considered or included whatsoever. Only direct loans from the FSA are even under consideration for debt relief under reconciliation, whereas under Section 1005, both direct and guaranteed loans were eligible for debt relief,” said Davy.