Black Farmers to Receive $2.2 Billion in Landmark U.S. Settlement Following Decades of Discrimination

In a landmark decision, the Biden administration has announced a historic $2.2 billion payout to Black and minority farmers who have faced decades of unfair treatment and discrimination by the U.S. Department of Agriculture (USDA). 

This payout aims to address the long-standing issues that have affected these farmers, who were often denied loans and financial support that other farmers received. Despite this major step forward, is the payout enough to fully make up for the years of discrimination and loss? 

Historic $2.2 Billion Payout

This payout stems from Section 22007 of the Inflation Reduction Act (IRA), which was signed into law by President Biden almost two years ago.^(ref)

This initiative represents a bold move toward addressing the longstanding issues surrounding Black-owned farmland and the systematic barriers farmers faced in accessing federal loans. The administration aims to reconcile with the community and promote agricultural equity moving forward.

The compensation was distributed to over 23,000 farmers nationwide, serving as a formal acknowledgment of the USDA’s documented history of discriminatory practices against Black farmers. 

Acknowledging Generational Injustice

President Biden mentions in a statement that this payout is not just about monetary compensation but about recognizing the injustices that minority farmers have faced for generations.^(ref) The majority of the payments were made to farmers in states like Mississippi and Alabama, with individual payouts ranging from $10,000 to $500,000.

John Boyd, a fourth-generation farmer from Mecklenburg, Virginia, and president of the National Black Farmers Association (NBFA), says in a NBFA press release that this payout is the culmination of decades of hard-fought advocacy from Black farmers and their allies and the ongoing struggle to secure justice and resources for Black farmers.^(ref)

According to the NAACP Legal Defense Fund (LDF), Black farmers have experienced discrimination from the USDA, being denied loans and credit at much higher rates compared to any other demographic.^(ref) 

Another study found that Black farmers are more likely to experience financial losses, get long-term production contracts, and work on less land compared to white farmers.^(ref)

The Impact of Discriminatory Policies on Black-Owned Farmland

According to a 2022 report, Black farmers lost around $326 billion in land value because of unfair lending practices by the USDA and being forced to sell their land throughout the 20th century.^(ref)

A range of policies starting from the Great Depression caused the decline of Black farmers and Black-owned farmland. The Agricultural Adjustment Act of 1933 let white landowners keep government payments instead of giving them to Black sharecroppers who were working the land.^(ref) The USDA also left Black farmers out of the Federal Emergency Relief Administration and gave most of the aid to white farmers.

A 2022 data analysis by NPR found that the USDA approved direct loans for only 36% of Black farmers who applied, the lowest approval rate among all demographics. In comparison, 72% of white farmers were approved. These unfair land practices caused a sharp drop in Black-owned farmland, which reached its highest point in 1910 with about 16 million acres across the country. Today, Black farmers own less than 3 million acres and make up only 1% of all farmers in the U.S.^(ref)

Decades-long Lobbying Campaign

While the payouts are a big step, there was also supposed to be an extra $3 billion in debt relief for struggling farmers, but that was canceled.^(ref) 

According to the NBFA press release, Boyd recognizes that “No matter how it is sliced, the $2.2 billion in payouts is historic. In 1999, Black farmers received a $1 billion payout. In 2013, a $1.25 billion payment was made in a late filers’ lawsuit settlement.”

The NBFA has also helped secure similar settlements for Hispanic, women, and Native American farmers, as well as the Cobell case settlement.^(ref)