When the pandemic struck, much of the U.S. agriculture industry felt the financial crunch. Farmers and ranchers were among those whose hardship was particularly severe, as many of them struggled to make payments on outstanding loans from the federal government.
Julie Owen is a single mother and a farmer in Ringgold, Virginia. With the help of her two children, she raises cattle and goats; she also grows hay to feed her animals.
James Tiegs is a farmer in Ellendale, North Dakota. His 4,700-acre farm stretches across the border into South Dakota, where he grows wheat, soybeans, and corn.
Abraham Jergenson is a beginning farmer in Starbuck, Minnesota. Working with his wife, Cally, he raises cattle on their small farm.
Chad Ward is a farmer who lives in Texas but who regularly travels to Horatio, Arkansas, where he raises cattle.
Each of them was understandably encouraged by the passage of the American Rescue Plan Act of 2021 because it included farm loan forgiveness for COVID-related financial hardship. Their optimism quickly changed to disappointment when they learned they are ineligible for the program—due not to finances, but to skin color.
The Act, passed in March, provides loan forgiveness up to 120% of USDA loan amounts, but only for farmers and ranchers who are racial minorities. That is, the federal government is using racial classifications to decide who will be granted access to government benefits.
The blanket exclusion of white farmers from debt relief purportedly aims to address past discrimination against certain minority farmers and ranchers by the USDA. These historical wrongs have been previously addressed through administrative changes and class action settlements. Yet now, government is trying to combat that historical racial discrimination by mandating more of it nationwide.
Whether or not they ultimately are granted loan forgiveness, these farmers simply want equal treatment. Instead of a level playing field, under the program enacted by Congress, they are forced to farm at a government-sanctioned competitive disadvantage based on something as immutable as skin color.
Such racial classifications, however, violate the Constitution’s equal protection guarantee. In fact, the Supreme Court has repeatedly said government cannot make those kinds of classifications except in very narrow cases of past discrimination.
Julie, James, Abraham, Cally, and Chad fought back with a federal lawsuit challenging the American Rescue Plan’s unlawful race-based farm loan forgiveness provision.
On September 8, 2022, they voluntarily dismissed their case after Congress repealed the race-based program and replaced it with a race-neutral debt relief policy as part of the Inflation Reduction Act of 2022.
What’s At Stake?
- A bedrock American principle is the right to equality before the law. Government should treat people as individuals, and not discriminate based on membership in a racial group.
- Our clients seek only to be treated equally. It is unfair for government to distribute benefits and burdens based on a farmer’s race.
