[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]


                A HEARING TO REVIEW THE STATE OF BLACK 
                           FARMERS IN THE U.S.

=======================================================================

                                HEARING

                               BEFORE THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                               ----------                              

                             MARCH 25, 2021

                               ----------                              

                            Serial No. 117-3
                            
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                            


          Printed for the use of the Committee on Agriculture
                         agriculture.house.gov
                         
                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
46-332 PDF                 WASHINGTON : 2021                     
          
-----------------------------------------------------------------------------------   
 

                        COMMITTEE ON AGRICULTURE

                     DAVID SCOTT, Georgia, Chairman

JIM COSTA, California                GLENN THOMPSON, Pennsylvania, 
JAMES P. McGOVERN, Massachusetts     Ranking Minority Member
FILEMON VELA, Texas                  AUSTIN SCOTT, Georgia
ALMA S. ADAMS, North Carolina, Vice  ERIC A. ``RICK'' CRAWFORD, 
Chair                                Arkansas
ABIGAIL DAVIS SPANBERGER, Virginia   SCOTT DesJARLAIS, Tennessee
JAHANA HAYES, Connecticut            VICKY HARTZLER, Missouri
ANTONIO DELGADO, New York            DOUG LaMALFA, California
BOBBY L. RUSH, Illinois              RODNEY DAVIS, Illinois
CHELLIE PINGREE, Maine               RICK W. ALLEN, Georgia
GREGORIO KILILI CAMACHO SABLAN,      DAVID ROUZER, North Carolina
Northern Mariana Islands             TRENT KELLY, Mississippi
ANN M. KUSTER, New Hampshire         DON BACON, Nebraska
CHERI BUSTOS, Illinois               DUSTY JOHNSON, South Dakota
SEAN PATRICK MALONEY, New York       JAMES R. BAIRD, Indiana
STACEY E. PLASKETT, Virgin Islands   JIM HAGEDORN, Minnesota
TOM O'HALLERAN, Arizona              CHRIS JACOBS, New York
SALUD O. CARBAJAL, California        TROY BALDERSON, Ohio
RO KHANNA, California                MICHAEL CLOUD, Texas
AL LAWSON, Jr., Florida              TRACEY MANN, Kansas
J. LUIS CORREA, California           RANDY FEENSTRA, Iowa
ANGIE CRAIG, Minnesota               MARY E. MILLER, Illinois
JOSH HARDER, California              BARRY MOORE, Alabama
CYNTHIA AXNE, Iowa                   KAT CAMMACK, Florida
KIM SCHRIER, Washington              MICHELLE FISCHBACH, Minnesota
JIMMY PANETTA, California            ------
ANN KIRKPATRICK, Arizona
SANFORD D. BISHOP, Jr., Georgia

                                 ______

                      Anne Simmons, Staff Director

                 Parish Braden, Minority Staff Director

                                  (ii)
                                  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Adams, Hon. Alma S., a Representative in Congress from North 
  Carolina, submitted memorandum.................................   324
Carbajal, Hon. Salud O., a Representative in Congress from 
  California, submitted case.....................................   350
Costa, Hon. Jim, a Representative in Congress from California, 
  prepared statement.............................................     7
    Submitted article............................................   302
    Submitted hearing............................................   305
    Submitted report.............................................   318
    Submitted statements on behalf of:
        Scott, Jr., Will, Owner, Scott Family Farms, Founder, 
          African American Farmers of California.................   322
        Asian Business Institute & Resource Center...............   323
Kirkpatrick, Hon. Ann, a Representative in Congress from Arizona, 
  submitted report...............................................   375
Rush, Hon. Bobby L., a Representative in Congress from Illinois, 
  submitted book.................................................   348
Scott, Hon. David, a Representative in Congress from Georgia, 
  opening statement..............................................     1
    Prepared statement...........................................     4
    Submitted letters on behalf of:
        Bunch, James, President/Chief Executive Officer, 
          Bunchology LLC.........................................   159
        Davis, Webster E., Senior Policy Advisor, Family Farm 
          Action.................................................   160
        Jones, Collis, Vice President, U.S. Policy & Strategy, 
          Deere & Company........................................   163
        Simpson, Duane, Vice President, North America Government 
          & Industry Affairs, Bayer Crop Science.................   164
    Submitted presentation on behalf of Bernice Atchison, farmer 
      from Chilton County, AL and Pigford historian..............   166
    Submitted statements on behalf of:
        Khanna, Navina, Executive Director, HEAL (Health, 
          Environment, Agriculture, Labor) Food Alliance.........   204
        Jordan, Tanya Ward, President, Coalition For Change, Inc. 
          (C4C)..................................................   207
        Rural Coalition/Coalicion Rural..........................   208
Thompson, Hon. Glenn, a Representative in Congress from 
  Pennsylvania, opening statement................................     5

                               Witnesses

Vilsack, Hon. Thomas ``Tom'' J., Secretary, U.S. Department of 
  Agriculture, Washington, D.C...................................    10
    Prepared statement...........................................    11
    Submitted questions..........................................   394
Boyd, Jr., John W., Founder and President, National Black Farmers 
  Association, Baskerville, VA...................................    13
    Prepared statement...........................................    15
    Submitted questions..........................................   402
Blanding, Cornelius, Executive Director, Federation of Southern 
  Cooperatives/Land Assistance Fund, East Point, GA..............    93
    Prepared statement...........................................    95
Haynie III, Philip J., Chairman, National Black Growers Council, 
  Burgess, VA....................................................    98
    Prepared statement...........................................    99
Rowe, Sedrick, Owner/Operator, Rowe Organic Farms LLC, Albany, GA   101
    Prepared statement...........................................   102
    Submitted questions..........................................   403
Sherrod, Shirley, Executive Director, Southwest Georgia Project 
  for Community Education, Inc., Albany, GA......................   103
    Prepared statement...........................................   105
    Submitted question...........................................   403
Cotton, Arnetta, Co-Owner and Program Facilitator, Kingdom 
  Community Development Services, Wagoner, OK; accompanied by 
  Earrak Cotton, Owner, Cattle For The Kingdom...................   106
    Prepared statement...........................................   108

 
       A HEARING TO REVIEW THE STATE OF BLACK FARMERS IN THE U.S.

                              ----------                              


                        THURSDAY, MARCH 25, 2021

                          House of Representatives,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Committee met, pursuant to call, at 12:00 p.m., via 
Webex, Hon. David Scott of Georgia [Chairman of the Committee] 
presiding.
    Members present: Representatives David Scott of Georgia, 
Costa, McGovern, Adams, Spanberger, Hayes, Delgado, Rush, 
Pingree, Sablan, Kuster, Bustos, Maloney, Plaskett, O'Halleran, 
Carbajal, Khanna, Lawson, Correa, Craig, Harder, Axne, Schrier, 
Panetta, Kirkpatrick, Bishop, Thompson, Austin Scott of 
Georgia, DesJarlais, Hartzler, LaMalfa, Davis, Allen, Rouzer, 
Bacon, Johnson, Baird, Hagedorn, Balderson, Cloud, Mann, 
Feenstra, Miller, Moore, and Fischbach.
    Staff present: Lyron Blum-Evitts, Carlton Bridgeforth, Ross 
Hettervig, Chu-Yuan Hwang, Anne Simmons, Ashley Smith, Parish 
Braden, Caleb Crosswhite, Josh Maxwell, Jennifer Tiller, Erin 
Wilson, John Konya, and Dana Sandman.

  OPENING STATEMENT OF HON. DAVID SCOTT, A REPRESENTATIVE IN 
                     CONGRESS FROM GEORGIA

    The Chairman. This hearing of the Committee on Agriculture 
entitled, A Hearing to Review the State of Black Farmers in the 
U.S., will now come to order.
    Welcome, and I want to thank everyone for joining us for 
today's hearing. After brief opening remarks, Members will 
receive testimony from the witnesses today, and then the 
hearing will be open to our Members' questions. Members will be 
recognized in the order of seniority, alternating between 
Majority and Minority Members, and in the order of arrival for 
those Members who have joined us after the hearing was called 
to order. When you are recognized, you will be asked to please 
unmute your microphone, and you will have 5 minutes to ask your 
questions and make your statements. If you are not speaking, 
please, I ask that you remain muted in order to minimize the 
background noise so we can hear what our witnesses and our 
Members are saying. In order to get to all of your questions, 
the timer will stay consistently visible on your screen, and 
your Chairman is going to be very strict. Five minutes, the 
hammer is coming down. We want everybody to participate in this 
extraordinary event.
    And ladies and gentlemen, my opening statement.
    This is a historic hearing, and I want to begin this 
hearing with these words. We all know that all things work 
together for good. To them, who love God, and to them, who are 
called according to God's purpose, there could be no more 
glorious words to use to set off this historic hearing that we 
are having today. And we all are very pleased to have the 
opportunity today to examine this topic which is deeply 
embedded in each of our hearts, both Democrats and Republicans 
hear about the plight of our Black farmers. And when our minds 
and our hearts are together, we are truly doing God's will.
    And so, as always, I certainly appreciate the opportunity 
to work on this issue alongside my colleague, the Republican 
Ranking Member of this Committee and my friend, Congressman 
Thompson of Pennsylvania. And I want to thank our Secretary of 
Agriculture, Tom Vilsack, for appearing before our Committee 
today. And this is our first Committee conversation with your 
second tenure at the USDA, Mr. Secretary, and we are so 
delighted and glad that you are before us today. I want you to 
know, from the bottom of my heart, I thank you for joining us 
today.
    I have heard that you are extremely busy, and I want to 
just doubly appreciate your time that you are taking to speak 
with us on this important and historic issue, an issue that I 
know that you have been working on. I thank you for the work 
that we have done together in putting forward a helping hand in 
the rescue package to bring $4 million to help our farmers pay 
their loans, and the $1 million that will help provide 
technical support. We appreciate your working with us on that.
    For decades, the discrimination against Black farmers by 
the United States Department of Agriculture has been well-
documented. Reports by the United States Commission on Civil 
Rights, the Government Accountability Office, and even the 
United States Department of Agriculture itself describes the 
discriminatory practices that were enabled by laws dating back 
all the way to the 1930s. That is why I am saying this is 
historic and hallowed ground that we are working on this day.
    In fact, in 1997, a group of Black farmers, including Mr. 
Timothy Pigford, filed a class action lawsuit against the 
United States Department of Agriculture over the agency's 
discrimination against Black farmers in farm loan programs and 
other benefit programs, as well as over the agency's failure to 
investigate racial discrimination complaints. The evidence is 
in. It is before us today, and this is why this is so 
meaningful for us, and why I prefaced it with that message from 
the Lord that He has given to us this day to serve His purpose 
that He has brought us together today, and that is to bring 
justice to our Black farmers.
    Well, the United States Department of Agriculture settled 
this class action lawsuit, and as a part of that settlement, 
some Black farmers--just some--received $50,000. Now many of my 
House colleagues may think that $50,000 is indeed a lot of 
money, but when a new tractor costs as much as $\1/2\ million, 
$50,000 is barely enough for a down payment on a reasonably 
good used tractor.
    It isn't enough to make improvements to the land. It may 
not even be enough to finance next year's purchases of seed and 
fertilizer. And in my frank opinion, $50,000 is not enough to 
make up for the decades of discrimination and generational 
wealth that has been lost among Black farming families, losing 
the land and the livelihood of our Black families. Black farms 
are, by and large, Black family farms.
    And further, adding insult to injury, Black farmers were 
saddled with IRS tax bills from that Pigford settlement, 
leaving many of them worse off than before they even got the 
$50,000. And that is why what we did together in the bill we 
just passed--when people say what is this in here talking about 
paying the tax bill, it is because we learned the Pigford bill. 
So, there is money here that takes into consideration of the 20 
percent over what we are getting so that those taxes are paid 
for, because the IRS uses that money as income, and they tax 
that loan forgiveness. I want to thank Secretary Vilsack for 
helping us put that package together.
    In short, the Pigford settlement was too little, it was too 
late for our Black farmers who lost their farms and livelihoods 
due to longstanding, systemic discrimination. And this systemic 
discrimination continues to be felt by Black farmers right 
today, who are still disadvantaged in our United States 
Department of Agriculture programs.
    This festering wound on the soul of American agriculture 
must be healed. This isn't just a festering wound in the Black 
farming area. It is a festering wound on all of agriculture, 
because we have to excise and heal this wound so that once and 
for all, my fellow Members, we will be able to make the 
statement that we no longer have racial discrimination in our 
United States Department of Agriculture, and that we want our 
glorious and wonderful world of agriculture to be open, to have 
opportunities for everybody regardless of race, creed, or 
color.
    That is why I have repeatedly called for a new conversation 
between Black farmers and the United States Department of 
Agriculture. This hearing is an opportunity for us, together 
with Secretary Vilsack here joining us, to begin that 
conversation, examine the Secretary of Agriculture's ideas and 
reforms that I understand he is already working on. And we have 
this opportunity to hear firsthand from our Secretary, and I 
thank God for that.
    This hearing, today, is very public, and it is a public way 
to address the deep mistrust that many of our farmers of color 
feel towards the United States Department of Agriculture. We 
are not hiding anything here, because when you hide it, you 
can't solve it. This is why this hearing is historic. And to 
make sure that in an increasingly competitive agriculture 
economy, no talent or ability is ignored or left behind. We no 
longer can afford that approach.
    The Black farmer representatives who are with us today, 
they will discuss this longstanding, systemic discrimination 
against our Black farmers. Who better to do that than our Black 
farmers themselves? And that is why I am so glad that they are 
here along with Secretary Vilsack.
    In 1920, Black farm operators were 14 percent of all the 
United States farmers, and in the South, over 20 percent of all 
the farms were owned by African Americans. You know what it is 
now? It is less than two percent, 1.8 percent to be exact.
    Lack of equal access to our Federal farm loan programs is a 
large reason Black farms have lost 90 percent of their land. In 
1937, Congress required that locally elected county 
commissioners and committees certify the eligibility of farmers 
for the farm loan program. And when a farmer applied for a farm 
program, the county committees received sensitive information 
about the applicants. This left creditworthiness up to the 
elected officials, county officials on the committee, many of 
whom were landlords on this land. Talk about a conflict of 
interest in addition to the racism. So, there was built-in bias 
against our Black farmers for decades. And I am not speaking to 
you as one that doesn't know. You are looking at your Chairman 
who was born on a Black farm, my grandparents' farm, in Aynor, 
South Carolina. And you talk about farming, that was the heart 
of it in Aynor. I know what it was there.
    For those of you who feel the number of loans is fairly 
representative of the number of Black farmers today, I say they 
totally miss the point. Most farmers who can't get a loan are 
simply not farming. But we are here to find out why they aren't 
farming, to examine the built-in barriers to the loan system 
and to see how to remove them.
    We have six farmers and farmer advocates here on the panel 
with us today who will share their experience and solutions to 
address the effects of discrimination and improve the 
profitability and sustainability of our Black farmers. That is 
the bottom line. We have to increase the market share of our 
Black farmers. If we do that and our Black farmers are making 
money, we will never have to be in the position of having to 
pay lending bills if they get the proper amount of market share 
to sell their products on the market.
    Folks, I am noticing our good work here in Congress as 
well, and I have a letter of support for policies, including 
the American Rescue Plan of 2021 for relief for farmers of 
color. If there is no objection, I will enter this letter of 
support from a major agricultural industry giant, Bayer, for 
the record.
    [The letter referred to is located on p. 164.]
    [The prepared statement of Mr. David Scott follows:]

 Prepared Statement of Hon. David Scott, a Representative in Congress 
                              from Georgia
    Good afternoon, I'm pleased to have the opportunity today to 
examine a topic which is deeply embedded in my heart--the status of 
Black farmers in the United States. And as always, I appreciate the 
opportunity to work on this matter alongside my colleague, Ranking 
Member Thompson of Pennsylvania.
    I want to thank our newly appointed Secretary of Agriculture Tom 
Vilsack for appearing before the Committee today. This is our first 
conversation of your second tenure at USDA, Mr. Secretary, and we are 
glad you are before us today.
    I know that you are extremely busy, and I appreciate your time 
today to speak on this essential issue. An issue that I know you too 
have wrestled with.
    For decades the discrimination against Black farmers by USDA has 
been well-documented. Reports by the U.S. Commission on Civil Rights, 
the Government Accountability Office, and even the USDA itself describe 
the discriminatory practices enabled by laws dating back to the 1930s.
    In fact, in 1997, a group of Black farmers, including Mr. Timothy 
Pigford, filed a class action lawsuit against USDA over the agency's 
discrimination against Black farmers in farm loan programs and other 
benefit programs, as well as over the agency's failure to investigate 
race discrimination complaints.
    USDA settled this class action lawsuit, and as a part of that 
settlement, some Black farmers received $50,000. Now many of my House 
colleagues may think that $50,000 is a lot of money, but when a new 
tractor costs as much as $\1/2\ million, $50,000 is barely enough to 
buy even a reasonably good used one.
    It isn't enough to make improvements to the land. It may not even 
be enough to finance next year's purchases of seed and fertilizer. And 
in my frank opinion, $50,000 is not enough to make up for decades of 
discrimination and generational wealth lost from the losing of land and 
livelihood among Black farmers.
    Further, adding insult to injury, Black farmers were saddled with 
IRS tax bills from the Pigford settlements, leaving many of them worse 
off than before.
    In short, the Pigford settlements were too little, too late for the 
Black farmers who lost their farms and livelihoods due to longstanding, 
systemic discrimination. And this systemic discrimination continues to 
be felt by Black farmers today, who are still disadvantaged in USDA 
programs.
    This festering wound on the soul of American agriculture must be 
healed. That is why I have repeatedly called for a new conversation 
between Black farmers and USDA. This hearing is an opportunity for us, 
together, with Secretary Vilsack, to begin that conversation and 
examine the Secretary's ideas and reforms that I understand are being 
contemplated at USDA.
    This hearing today is a very public way to address the deep 
mistrust that many farmers of color feel towards USDA, and to make sure 
that in an increasingly competitive agriculture economy no talent or 
ability is ignored or left behind. We no longer can afford that 
approach.
    The Black farmer representatives who are here with us today will 
discuss the longstanding, systemic discrimination against Black farmers 
and its cumulative impact on Black farming in the United States. In 
1920 Black farm operators were 14 percent of all U.S. farmers.
    Today, Black farmers make up less than two percent of all farmers 
in the United States. Lack of equal access to Federal farm loan 
programs is a large reason Black farmers have lost 90% of their land.
    In 1937, Congress required that locally elected county committees 
certify the eligibility of farmers for the farm loan program.
    When a farmer applied for a farm program, the county committees 
received sensitive information about the applicant; this left credit-
worthiness up to an elected county committee, many of whom were 
landlords. So, there was a built-in bias against Black farmers for 
decades. And subsequent laws and their regulations are built on that 
same foundation of inequity.
    For those who feel that the number of loans is fairly 
representative of the number of Black farmers today, I say they totally 
miss the point. Most farmers who can't get a loan are simply not 
farming.
    But, we are here to find out why they aren't farming, to examine 
the built in barriers to the loan system and see how to remove them.
    We have six farmers and farmer advocates here with us today who 
will share their experience and solutions to address the effects of 
discrimination and improve the profitability and sustainability of 
Black farmers.
    Folks are noticing our good work in Congress as well. I have here a 
letter of support for policies included in the American Rescue Plan for 
relief for Farmers of Color. If there is no objection, I will enter 
this letter of support from Bayer into the record . . . thank you.*
---------------------------------------------------------------------------
    * The letter referred to is located on p. 164.
---------------------------------------------------------------------------
    I'd now like to welcome the distinguished Ranking Member, the 
gentleman from Pennsylvania, Mr. Thompson, for any opening remarks he 
would like to give.

    The Chairman. Thank you. I would now like to welcome the 
distinguished Ranking Member, my friend, the gentleman from 
Pennsylvania, Mr. Thompson, for his opening remarks. Thank you.

 OPENING STATEMENT OF HON. GLENN THOMPSON, A REPRESENTATIVE IN 
                   CONGRESS FROM PENNSYLVANIA

    Mr. Thompson. Well, good afternoon, and thank you, Mr. 
Chairman. Always a privilege and honor to work with you on the 
issues that are so important to rural America, and to our 
agriculture industry. And thank you for holding today's hearing 
on such an important issue that I know is not only near and 
dear to your heart, but it is an issue of such importance that 
each and every one of us participating today, including those 
tuning in to our livestream, can learn something from.
    Today's hearing to review the state of Black farmers in the 
United States is an opportunity to address some questions that, 
quite frankly, have gone unanswered for far too long. Everyone 
participating today is familiar with the 1999 class action 
suit, Pigford v. Glickman, a case that alleged decades of 
discrimination by the United States Department of Agriculture 
against Black farmers applying for farm loans and other 
government assistance. Since the original Pigford settlement, 
more than $2 billion have been allocated as compensation for 
Black farmers.
    Without a doubt, there has been discrimination at USDA in 
the past against Black farmers and other socially disadvantaged 
groups. Sadly, I am sure, instances of discrimination remain 
today.
    Now, Pub. L. 117-2, the American Rescue Plan of 2021 was 
signed into law 2 weeks ago today. Among the nearly $2 trillion 
in spending was $5 billion allocated for Black farmers, $4 
billion of which was designated for loan forgiveness. Now, let 
me be clear. I didn't vote for this bill for many obvious 
reasons. The fact that the bulk of the multi-trillion-dollar 
bill had virtually nothing to do with COVID was chief among 
them. It was also drafted behind closed doors with no input 
from the Minority party. We never get the best product whenever 
either party allows that to happen. And moreover, the bill was 
drafted based on hypotheticals, misinformation, and incomplete 
data. Unfortunately, that is what happens when you force 
through partisan legislation through budget reconciliation. 
Paying off the loans of socially disadvantaged farmers may help 
in the short-term, but it does very little to address the root 
cause of this issue. I know my healthcare practice for 28 
years, we had to get to the root cause of an issue to truly 
address it long-term. I think that applies just as important 
lessons apply to legislation or dealing with public policy 
issues especially as egregious ones as discrimination within 
agriculture programs and the support of those. It does nothing 
to attack discrimination head on, and it certainly doesn't 
prevent racial exclusion for Black farmers, or any other 
socially disadvantaged group in the future.
    Now, how did USDA leadership fail so spectacularly to allow 
this ongoing discrimination for so many years? Why were bad 
actors allowed to continue their comfortable government or 
appointed jobs when they so brazenly allowed discrimination to 
continue, even if not having directly engaged in discrimination 
itself? Where was the oversight? Where was the supervision of 
these bad actors? Is simply forgiving debt the best way to 
address this problem and provide a forward thinking and 
equitable outcome?
    The American Rescue Plan of 2021 gives USDA blanket 
authority to handle the funds provided through the legislation. 
Well, surely leaving an unelected bureaucracy with a decades 
long track record of racial discrimination to their own devices 
cannot be the best way to right wrongs. We cannot forget the 
progress Congress has already made by authorizing program 
initiatives through previous farm bills that I am very proud of 
to assist our Black and other socially disadvantaged farmers. 
From credit to conservation, there have been a number of 
provisions that seek to address inequalities.
    For example, USDA's Farm Service Agency now targets direct 
loans and guaranteed loans to eligible socially disadvantaged 
farmers to buy and to operate family-sized farms and ranches. 
When it comes to conservation and forestry, the Natural 
Resources Conservation Service has made a concerted effort to 
provide resources for socially disadvantaged and historically 
underserved producers. Every year, NRCS targets five percent of 
its EQIP investments, that program, for socially disadvantaged 
farmers. However, over the last decade, NRCS has exceeded 
expectations with 33 percent of EQIP funding going to 
historically underserved producers and beginning farmers.
    Of course, I would be remiss not to mention the 2018 Farm 
Bill, and Mr. Chairman, recognize your efforts when it came to 
doing better and providing the investments in our historically 
Black 1890 land-grant universities. Thank you for your 
leadership on that initiative as a part of that farm bill 
process, including the $80 million in scholarships for those 
HBCU students to pursue agricultural education.
    While much work remains, we should look to this previous 
progress as really a blueprint in our continued discussions. We 
must work together as a farm team: farmers, ranchers, 
producers, legislators, stakeholders, and activists alike to 
reduce barriers that are preventing Black and other socially 
disadvantaged farmers from participating fully in a robust farm 
economy. We must support a strong farm economy that lifts up 
all.
    I would like to thank our Chairman once again. I would 
especially like to thank our witnesses. We have an impressive 
list of witnesses here. Having read and digested your written 
testimony, it was certainly heartfelt. There was a lot of 
passion, emotion, sharing your life stories throughout that, 
and that is appreciated, much appreciated. Your testimony is 
critical in helping us better understand the discrimination 
Black farmers have faced, and also, it will play a crucial role 
to ensure our agriculture policy does not discriminate. Rather, 
it empowers farms of all races, sizes, and commodities.
    I am here to listen. We are all here to listen, and I look 
forward to participating in this long overdue conversation.
    Thank you, Chairman, and I yield back.
    The Chairman. Thank you, Ranking Member, for those 
excellent comments and words.
    The chair would request that other Members submit their 
opening statements for the record so witnesses may begin their 
testimony and to ensure that there is ample time for all of 
your questions.
    [The prepared statement of Mr. Costa follows:]

Prepared Statement of Hon. Jim Costa, a Representative in Congress from 
                               California
    Today's hearing is truly a historic one. I want to thank the 
Chairman and Ranking Member for providing this opportunity to review 
the state of Black farmers in our country. In California we've seen a 
dramatic decrease in the number of Black farmers and unfortunately, 
socially disadvantaged farmers still face many barriers. In preparation 
for this hearing I requested testimony from Will Scott, Jr. founder and 
President of the African American Farmers of California which I will 
enter in full to the hearing record.
    The additional testimony we'll hear today makes it clear that there 
has been discrimination towards Black farmers by the USDA. I want to 
point out that there has also been a history of discrimination against 
other farmers of color, such as Asian American farmers, in my state.
    We're all aware of America's shameful internment of Japanese 
Americans during World War II. Many of the Japanese Americans forced 
into internment camps were Pacific Coast farmers, who left behind land 
they had successfully cultivated for decades. The USDA's Farm Security 
Agency was tasked with confiscating the land and ensuring that 
agricultural production was uninterrupted by the forced removal of 
these Japanese American farmers. Approximately 6,000 Japanese American 
farms were confiscated, totaling 200,000 acres, during this period.
    Additionally, I have many Hmong farmers in my district, who have 
also faced discriminatory barriers. In 1997, some representatives for 
Hmong farmers testified before our Committee that they were unable to 
secure financing through USDA due to discrimination. Local USDA offices 
and banks were unwilling to provide any assistance to Hmong farmers in 
submitting farm loan or disaster program applications.
    And when Hmong farmers later did gain access to USDA farm loan 
programs, many of them were taken advantage of by predatory lenders. In 
2001, hundreds of Hmong farmers in Arkansas, Oklahoma, and Missouri 
used FSA guaranteed loans to purchase poultry farms, whose values were 
inflated by lenders. Hmong farmers were strapped with large mortgages 
they could not repay. And when these farms failed, the Federal 
Government stepped in to pay off up to 95 percent of each loan.
    I will submit for the record the hearing testimony of Mr. Pheng Vue 
and Charlie Jonchue Chang before the Committee in 1997, as well as a 
2006 article from the Chicago Tribune about Hmong poultry farmers 
losing their farm after taking out FSA guaranteed loans. Additionally, 
I will submit testimony prepared for this hearing by Blong Xiong, 
Executive Director of the Fresno Asian Business Institute and Resource 
Center, further detailing the experiences of Hmong and Southeast Asian 
farmers during the COVID-19 pandemic.*
---------------------------------------------------------------------------
    * The documents referred to are located on p. 302.
---------------------------------------------------------------------------
    Thank you for holding this hearing on such an important topic. I 
look forward to working with Secretary Vilsack and the Committee to 
continue to advance the cause of the socially disadvantaged farmers 
across the country.

    The Chairman. So, without objection, the chair is 
authorized at any time to declare the Committee in recess, 
subject to the call of the chair.
    And now, let us turn our attention to our distinguished 
panelists who are here with us today, and we are so delighted.
    First, I am very pleased to welcome back to the Agriculture 
Committee Secretary Tom Vilsack, who is now leading our 
Department of Agriculture for the second time. Secretary 
Vilsack needs no introduction to many of us on this Committee, 
but I will note that he did serve two terms also as the 
Governor of Iowa before joining the Obama Administration as the 
30th Secretary of Agriculture in 2009. He was President Obama's 
longest serving cabinet Secretary. He was confirmed again in 
February of this year for his second tenure as Secretary.
    Our next witness is Mr. John Boyd, Jr., founder and 
President of the National Black Farmers Association. Mr. Boyd 
is a fourth-generation farmer from Baskerville, Virginia, where 
he owns and operates a 300 acre farm, raising corn, wheat, 
soybeans, and beef cattle. Mr. Boyd is a familiar presence here 
in Washington, D.C., as the founder and President of the 
National Black Farmers Association. Since 1995, the National 
Black Farmers Association has fought hard for equal treatment 
for our Black farmers at USDA's Farm Service Agency, 
particularly with equal access to credit. Also, Mr. Boyd was a 
key spokesperson for Black farmers during both Pigford 1 and 
Pigford 2. And Mr. Boyd continues to promote inclusion, 
equality of opportunity for Black farmers across all sectors of 
our agriculture industry across the nation. It is good to have 
you here today, Mr. Boyd, and we appreciate your testimony as 
well.
    And now, I am pleased to welcome our third witness, Mr. 
Cornelius Blanding, Executive Director of the Federation of 
Southern Cooperatives. Mr. Blanding joins us today with a deep 
background in management consulting and business development, 
including 24 years in support of Black farmers and rural 
landowners. He has served on more boards and committees than we 
have time to name here today. Of note, though, are USDA's 
Advisory Committee on Beginning Farmers and Ranchers, as well 
as a member of the Advisory Board of the Socially Disadvantaged 
Farmers and Ranchers Policy Research Center. We are very 
grateful for your time, your experience, and your commitment to 
Black farmers, and thank you also for joining us today.
    Our fourth witness is Mr. Philip J. Haynie III. He is 
Chairman of the National Black Growers Council. Mr. Haynie is a 
fifth-generation farmer based in Reedville, Virginia, where he 
and his family have a grain farm, a timber harvesting 
operation, a bulk transport business, in addition to a 
landscaping and excavating company. He is a graduate of 
Virginia Tech. Mr. Haynie is currently the Chairman of the 
National Black Growers Council. Welcome, Mr. Haynie. You are 
clearly a very busy man. Mr. Haynie, we appreciate your 
participation in being here today and look forward to your 
excellent testimony.
    Next, I would like to welcome Mr. Sedrick Rowe. Mr. Rowe is 
an organic farmer from Rowe Organic Farms. Mr. Rowe is from 
Albany, Georgia, where he operates a USDA-certified organic 
farm, producing peanuts, hemp, watermelons, and canalfa--
canola, excuse me. His commitment to agriculture extends from 
creation of the first Georgia Organic Peanut Association. His 
pursuit of a Ph.D. in soil health--that is going to come in 
very handy as we grapple with our climate change, no-till 
farming, and cover crops. And his commitment to rural Georgia 
is evident by his work with young farmers in his community, and 
as a recognized leader of young farmers. He is an example of 
hard work and brains, and I hear he knows how to play football, 
too. Thank you for being with us, Mr. Rowe.
    Our fifth witness is Mrs. Shirley Sherrod, an extraordinary 
individual and a legendary leader in the fight to help her 
Black farmers. Mrs. Shirley Sherrod is Executive Director of 
the Southwest Georgia Project for Community Education, 
Incorporated. Mrs. Sherrod is a distinguished fellow Georgian 
who has served in multiple positions promoting rural 
communities and agriculture. Mrs. Sherrod is a graduate of 
Albany State in Albany, Georgia, and Mrs. Sherrod was the first 
person of color to be appointed as Georgia's state director of 
the United States Department of Agriculture's Rural Development 
in 2009. I am really looking forward as we move to really 
address rural development and rural broadband. Mrs. Sherrod 
brings years of cumulative expertise to today's panel of 
witnesses as the founder and Vice President of Development for 
New Communities, Inc., the nation's first community land trust, 
the Executive Director of Southwest Georgia's Project for 
Community Education, Inc., as well as the state lead for 
Southern Rural Black Women's Initiatives for Economic and 
Social Justice. Thank you so very much for sharing your wealth 
of experience and knowledge with us today, Mrs. Sherrod.
    And to introduce our final witness, I am pleased now to 
yield to our colleague on the Agriculture Committee, the 
distinguished gentleman from Kansas, Mr. Mann.
    Mr. Mann. Thank you, Chairman Scott. Thank you for this 
hearing. I am honored to introduce to you Arnetta and Earrak 
Cotton, the owners of Kingdom Community Development Services 
and Cattle For The Kingdom in Wagoner, Oklahoma. The Cottons 
have more than 54 years of farm and ranch experience, and have 
dedicated their lives to outreach and assistance for rural and 
underserved communities. I am especially grateful for the 
Cottons and their recent work to distribute USDA Farmers to 
Families food boxes in Kansas, among other states, and through 
the Rural Impact Food Pantry at the church that they lead. I 
very much enjoyed getting to know the Cottons. They are 
wonderful people. They are the perfect example of serving, 
educating, and finding ways to farm and ranch despite 
adversity. Mr. and Mrs. Cotton, we look forward to hearing your 
testimony in a few minutes.
    The Chairman. I thank the gentleman for his remarks and for 
his introduction.
    Now, we will now proceed to our historic hearing, and with 
our testimony, and each of our panelists will have 5 minutes. 
Now, I am going to be strict on the timer so that we can get 
everybody in and heard. And so, the timer will be visible to 
everyone on your monitors so that you will have a countdown to 
zero, at which point, your time will be expired and I will 
bring down the gavel.
    So, now let us start with our distinguished Chairman of the 
agriculture--the United States Agriculture Department. Mr. 
Vilsack, our distinguished Secretary, you are now recognized 
for 5 minutes. Please begin now.

 STATEMENT OF HON. THOMAS ``TOM'' J. VILSACK, SECRETARY, U.S. 
          DEPARTMENT OF AGRICULTURE, WASHINGTON, D.C.

    Secretary Vilsack. Mr. Chairman, thank you very much to you 
and to Ranking Member Thompson for calling this historic 
hearing on the state of Black farmers in America and 
discrimination directed at Black farmers by the Department of 
Agriculture.
    In the interest of time and my belief that the testimony of 
the other panelists on this panel is far more relevant and more 
compelling than anything I would offer, I won't read my 
prepared statement but would ask that it simply be placed in 
the record.
    What I wish to do today is to speak from the heart, and I 
want to provide you, Mr. Chairman, and Members of this 
Committee a single and solemn commitment from me and from the 
team at USDA that we will, over the next 4 years, do everything 
we can to root out whatever systemic racism and barriers that 
may exist at the Department of Agriculture directed at Black 
farmers, socially disadvantaged farmers, and people who live in 
persistently poor areas in rural America.
    Efforts have already been made in the past as you have 
indicated, Mr. Chairman, good faith efforts to respond to 
specific acts of discrimination, but more needs to be done to 
dig deeper into the systemic causes and barriers that 
perpetuate discriminatory practices, and to deal directly with 
the cumulative effect of discrimination, the gap that now 
exists between those who had the full array of services at 
USDA, the full array of programs at USDA, and those who, for 
far too long, have not had that array.
    Work has begun already to start the implementation of 
President Biden's Executive Order on equity. A working group 
has been formed at USDA across all agencies, and they have 
already begun to meet and to begin the work of the assessment 
of services, benefits, contracts, and procurements, and 
barriers and problems that may exist. I will have the benefit 
of the guidance and direction for the first time ever of a 
senior advisor for equity in the Secretary's office. Dr. 
Dewayne Goldmon has been appointed in that position, and he 
will work with our new team at the Civil Rights Office, and 
with the dedicated men and women at USDA to provide advice and 
direction on equity issues throughout the USDA. I certainly 
look forward to the day of Senate confirmation of Dr. Jewel 
Bronaugh, who once confirmed, will be the first African 
American Deputy Secretary at the United States Department of 
Agriculture. She and I will partner together to carry out and 
fulfill the commitment that I made to you today.
    Finally, I am grateful for your leadership, Mr. Chairman, 
and that of Chairman Bishop, Senators Booker, Warnock, and 
Warren, who helped to shepherd through the American Rescue Plan 
of 2021 that contains an historic step forward in responding to 
the cumulative effect of discrimination in the past by 
providing debt relief for socially disadvantaged producers, by 
establishing an Equity Commission to review barriers that exist 
at USDA, to assist with heirs property issues, expanded 
outreach, market development, and land access. These resources 
will help restore some balance in the USDA COVID Covenant 
Relief Approach, and allow an external review of all of our 
programs at USDA.
    We are prepared to move quickly, efficiently, and 
thoughtfully to implement the American Rescue Plan of 2021 
sections related to Black farmers and socially disadvantaged 
farmers, and other sections of the Rescue Plan that relate to 
rural America.
    As part of my commitment to you today, I also want to 
provide an additional guarantee, and that is I plan to have in 
place a system of rigorous reporting, accountability, and 
oversight in all of our equity efforts.
    Let me be clear. There is no place at the USDA for 
discrimination, none. Nor, for that matter, anywhere. This 
historic moment to advance equity must not be lost, and I 
intend to do everything I can to ensure that it isn't.
    Mr. Chairman, I look forward to the questions from the 
Committee at your pleasure.
    [The prepared statement of Secretary Vilsack follows:]

 Prepared Statement of Hon. Thomas ``Tom'' J. Vilsack, Secretary, U.S. 
              Department of Agriculture, Washington, D.C.
    Thank you, Mr. Chairman, Ranking Member Thompson, and Members of 
this Committee.
    When I testified in front of the Senate for my confirmation hearing 
a few months ago, I said the world and our nation are different today 
than when I served as Agriculture Secretary in a previous 
Administration. The COVID-19 pandemic has changed all our lives and 
will continue to do so until enough of us are vaccinated to put COVID 
behind us. Some things, however, have not changed. The horrific 
shootings in Atlanta last week remind us that hatred and bigotry toward 
non-white Americans and gender-based violence are real, are threats, 
and must end.
    I am here today to discuss with you something not unrelated--the 
systemic racism and discrimination perpetuated against Black farmers, 
and the history of discrimination against Black farmers by USDA that 
has prevented numerous African-Americans, among other people of color, 
from fully realizing the same level of prosperity and success as their 
white counterparts. Unfortunately, the racism that resulted in the 
precipitous decline of Black farmers over the last century has also 
been evidenced among other groups of socially disadvantaged farmers.
    The Congress and the Department have attempted to address the 
systemic racism and discrimination that has been repeatedly documented 
and found to plague the programs at USDA, especially in the farm loan 
programs. In the late 1990's, Congress took the unprecedented step of 
waiving the statute of limitations to enable socially disadvantaged 
producers to have the chance to be heard and receive some remedy for 
the harm they suffered. Congress on several occasions provided funding 
to support the settlement of these cases, which was accomplished while 
I was previously in this position. During this time, Congress also 
acknowledged through support of outreach and other efforts the need to 
address the systemic discrimination these producers encountered. USDA 
also undertook efforts of self-examination and reform including through 
the work of the Civil Rights Action Team and an independent assessment 
and identification of barriers to USDA programs.
    The history of systemic discrimination against Black farmers has 
been well-documented, including a 2003 U.S. Commission on Civil Rights 
report which found that Black farm loan applications took 220 days to 
process as compared to their white counterparts, or a more recent study 
finding that although Black farmers are disproportionately 
underrepresented among farmers, were foreclosed on at a higher rate 
than any other race.
    Despite all that has been done, clearly more needs to be done to 
drive our efforts deeper. Here are two steps we must take. First, we 
must redress the discrimination that has proven to be systemic, 
evidently reflecting the way we have designed or implemented our 
programs, laws and regulations. By focusing on determining whether 
producers can prove specific, individualized discrimination, our past 
actions have failed to do the necessary work tailored to addressing the 
systemic discrimination socially disadvantaged producers face. Second, 
we must establish the support systems to enable socially disadvantaged 
producers to have the opportunity to succeed. Only with the 
establishment of such systems, will we be able to finally address the 
cumulative effect of discrimination and break the cycles that are 
holding these producers back.
    When I testified in front of the Senate, I committed to bold action 
to address discrimination in all its forms across USDA agencies, 
offices and programs. I pledged to ensure all programming is equitable 
and works to root out systemic racism. And I promised to build one of 
the most capable and diverse teams in the Federal Government, one that 
looks like the America we serve.
    Within the first 2 months of this Administration, USDA has 
appointed and nominated an incredibly talented cadre of appointees, 
reflective of a commitment to build a team that looks like America. 
USDA field and state offices are often the front door of USDA for 
producers and other stakeholders seeking support. From loan officers to 
County Committees to State Directors, it is essential that we build a 
pipeline and identify leaders for positions that represent the 
diversity of America and share this Administration's commitment to 
equity.
    Additionally, in response to President Biden's Equity Executive 
Order, EO 13985, USDA is examining opportunities to increase equity for 
all underserved populations, ensuring access to healthy meals to tackle 
nutrition insecurity, putting greater emphasis on our nation-to-nation 
consultation practices with Tribal nations, and bringing an equity lens 
to all strategic priorities, especially tackling the climate crisis and 
improving the rural economy.
    In short, we are building a USDA that represents and serves all of 
America. Many of the new leaders who have joined our team have a 
background working with producers. They share personal stories about 
farmers of color being rejected for a farm loan or getting a loan too 
late in planting season. Those farmers--some of whom you will hear from 
today--will tell you that they never forget the sting or consequences 
of that rejection, which can be long-lasting and even generational. In 
addition, creating more equitable opportunities for Black farmers is a 
rising tide that can lift all boats. As one study found, closing racial 
gaps in wages, housing credit, lending opportunities, and access to 
higher education would amount to an additional $5 trillion in gross 
domestic product and six million jobs to the American economy over the 
next 5 years.
    I am here today to say that racism and discrimination have no place 
at the Department of Agriculture. I will not tolerate it, and I am 
committed to rooting it out and establishing a relationship with 
producers that is built on a commitment to equity, trust and customer 
service. One of the most important steps I took in my previous tenure 
as Agriculture Secretary was to use authority granted under the 2002 
Farm Bill to appoint voting members to over 385 Farm Service Agency 
County Committees, addressing a longstanding inequity due to the under-
representation of socially disadvantaged farmers and ranchers. We must 
ensure these important appointments continue and that these individuals 
have privileges equal to the elected members.
    I was pleased when the socially disadvantaged farmer provisions in 
the American Rescue Plan began to come together. I'm grateful to you, 
Mr. Chairman, for your leadership, alongside Chairman Bishop, and of 
course Senators Booker, Warnock, and Chairwoman Stabenow.
    From the beginning, these provisions recognized that on top of the 
economic pain caused by the pandemic's impact on the economy and 
agriculture, socially disadvantaged farmers are also dealing with a 
disproportionate share of COVID infection rates, hospitalizations, 
death and economic hurt.
    The law provides funding to address longstanding racial equity 
issues within the Department and across agriculture. It provides debt 
relief for socially disadvantaged farmers and ranchers to respond to 
the cumulative impacts of systemic discrimination and barriers to 
access that have created a cycle of debt.
    The new law also provides approximately $1 billion in additional 
funding for assistance and support to socially disadvantaged producers 
and groups. USDA is in the process of standing up a Racial Equity 
Commission to identify and address barriers across USDA. The law also 
directs USDA to invest in programs to facilitate land access, 
strengthen outreach and education, business development, and more. USDA 
is now engaged in a process of outreach and seeking feedback directly 
from socially disadvantaged producers as we implement the law. This 
will be a collaborative, inclusive process.
    Before I close, I want to say that all of us here should want 
successful farmers. We should want more farmers. We should want farmers 
who can pass their land down to the next generation--who are role 
models including for young people of color to take up farming and 
ranching. We should want farming to be associated with equity and 
opportunity and entrepreneurship--not racism and barriers and 
intimidation. We should want farmers of color to have equal opportunity 
to contribute to the diverse fabric of American agriculture. We should 
make clear that prosperous farmers of color means a prosperous 
agricultural sector and a prosperous America. And we should do 
everything we can to make that possible. You have my commitment that I 
will do just that.
    Thank you for your time today.

    The Chairman. Thank you, Mr. Secretary. Thank you very much 
for your very good testimony that we have just heard.
    Now, I want to recognize for 5 minutes our next panelist, 
Mr. Boyd. You are now recognized to begin.
    Mr. Boyd, you may be muted.

          STATEMENT OF JOHN W. BOYD, Jr., FOUNDER AND 
 PRESIDENT, NATIONAL BLACK FARMERS ASSOCIATION, BASKERVILLE, VA

    Mr. Boyd. There we go. I am sorry. Okay.
    Mr. Chairman, thank you very much. First, glad to give 
honor to God, first and foremost, and I would like to thank 
you, the Ranking Member Thompson, Congressman Thompson, the 
other congressperson from North Carolina, the Vice Chair, Alma 
Adams. I have spent some time visiting with most Members of the 
Agriculture Committee to talk to them about the plight of the 
Black farmers this week, so I would like to thank all of the 
Members who took time to visit with me personally to talk about 
the plight of the Black farmers.
    It is an honor to be here today to talk to you and this 
Committee. This is a hearing, Mr. Chairman, that I personally 
have been advocating for, for over 30 years. When I first began 
to advocate and press the issue on Capitol Hill, we could never 
even get a full Committee Agriculture hearing. The people who 
are watching here, this is a very, very historic hearing and 
nature. Where the only hearing we could get at that time was 
with the Congressional Black Caucus in 1997 where all of the 
Members participated and listened to the plight of Black 
farmers. On behalf of every enslaved Black man in this country, 
on behalf of every sharecropper in this country, on behalf of 
every Black farmer who tilled the soil, past and present, we 
thank you and this Committee for finally hearing our cries.
    I am a fourth-generation farmer, and I was trained to farm 
by my grandfather, Thomas Boyd, and also my other grandfather, 
Lee Robinson, a sharecropper, and my father, John Boyd, Sr., 
who is probably watching this hearing today. I have a long, 
rich history of farming along the Roanoke River in Mecklenburg 
County, Virginia, where my great-grandfather, Andrew Boyd, was 
a slave. We bring a lot of history and wealth and pride and 
wisdom to this Committee today as we reach out to talk to you.
    Currently today, I raise corn, wheat, and soybeans, but I 
was trained as a tobacco, cotton, and peanut farmer. Many of 
those things were bought out under the government buyouts, and 
I, too, switched over to those types of commodities.
    Today, as you know, Mr. Chairman, in your comments, we are 
less than one percent of the nation's farmers, and we are 
facing extinction. At the turn of the century, we were over one 
million Black farm families strong, tilling 20 million acres of 
land in this country. Today, we are down to 4\1/2\ million 
acres of land in this country, and less than 50,000 Black 
farmers in this country. We got to this place partly by the 
United States Department of Agriculture and its discrimination, 
and I can attest that discrimination was alive and well at the 
Department of Agriculture, and we need to resolve the backlog 
of complaints that exist there. We need to improve program 
delivery at local offices around the country where those 
farmers, even today when they walk into the office and inquire 
about the Farmers of Color Act that recently passed, and we are 
getting a snobby and disrespected type of tone from the local 
offices, that they don't know anything about it and don't know 
how it is going to move forward. That was the same type of 
information that got us here in the first place, Mr. Chairman. 
This Committee worked hard to get that measure passed and we 
need to--I'm urging the Secretary today--and I heard his 
comments--to move swiftly and implement the bill so that the 
farmers can get the debt relief, and also the $29 billion that 
was doled out in the Trump Administration, less than 0.01 
percent went to Black farmers, 0.01 percent out of the $29 
billion went to Black farmers, Mr. Chairman.
    We can do better than that, and it was due to the act of 
discrimination by using the same policies by rolling this 
information out through the county offices, and is failing 
because Black farmers don't trust the United States Department 
of Agriculture. We have to find a better way to do that, and 
that is why we named it, Mr. Chairman, the Last Plantation, and 
rightfully so.
    And today, we need to move in a more cohesive way. This 
isn't a Republican issue. It is not a Democratic issue. It has 
happened on the hands of all Presidents, and I have met with 
Sonny Perdue, and it was the worst meeting in history for me as 
a leader where he said Black farmers had to get big or get out. 
He didn't need any tokens or people who didn't want to work on 
these committees. That is the type of discrimination that Black 
farmers are facing, and--it looks like I am running out of my 
time, but I can talk to you, Mr. Chairman, about this all day 
long.
    I am looking forward to getting all of the questions and 
input from this Committee, and again, thank you for having this 
very, very important hearing.
    [The prepared statement of Mr. Boyd follows:]

    Prepared Statement of John W. Boyd, Jr., Founder and President, 
          National Black Farmers Association, Baskerville, VA
    Dear Honorable Chairman David Scott, Vice Chair Alma Adams, and 
Congressman Glenn ``GT'' Thompson, Ranking Member. Thank you for the 
invitation. It is truly an honor to address your Committee hearing, A 
Hearing to Review the State of Black Farmers in the U.S.
    I am John Boyd, Founder and President of the National Black Farmers 
Association (NBFA). The National Black Farmers Association seeks 
justice in terms of the distribution of wealth, opportunities, and 
privileges within the United States ``U.S.'' and U.S. territories.
    The National Black Farmers Association (NBFA) is a nonprofit 
501(c)[(3)] organization with farm training sites across the United 
States in rural and urban areas. NBFA is a community-based organization 
with a national constituency of over 116,000 members predominately in 
42 states. Our membership consists of full-time farmers, part-time 
farmers, land and timber owners and many concerned citizens. To date, 
the organization continues to work diligently to improve the quality of 
life in rural communities through improved agricultural outreach, 
technical assistance, access to credit for small farmers, family farm 
business development, food distribution, rural economic development and 
environmental protection with a Memorandum of Understanding (MOU) with 
United States Department of Agriculture (USDA), U.S. Forest Service and 
Environmental Protection Agency.
    As a national civil rights figure representing Black Farmers, I 
have met with President Barack Obama, President Bill Clinton, President 
George W. Bush and President Jimmy Carter. I have led dozens of 
training sessions and community meetings across the nation, Africa and 
Haiti serving as a social justice advocate for women, Native American 
and Hispanic farmers in their pursuit to fair access to USDA programs 
and services. As a result, I am highly regarded in the farm community 
as someone ``who cares'' and has access to critical information about 
programs for Black and other minority, youth, veteran, women and 
limited resource farmers with a proven ability to deliver high-quality 
technical advice and solutions. The latest example of my personal 
commitment and corporate resolve to ensure civil, economic, 
environmental and social justice and fiscal responsibility for NBFA 
members and other small-scale farmers is the NBFA call to action 
``ReClaiming, ReGaining, and ReGenerating Our Family Farms''.
    The NBFA has been providing sustainable agriculture workshops and 
conferences for over 30 years due to the ongoing injustices faced by 
Black and other minority farmers. The NBFA provides all educational 
outreach training initiatives, direct technical assistance and 
conferences free of charge to attendees and open invitation for all to 
attend in accordance with the MOU between USDA, EPA, U.S. Forest 
Service. SC Commission for Minority Affairs and the NBFA.
    I am a fourth-generation farmer, maintaining about 1,300 acres in 
Southside, Virginia, where I grow soybeans, wheat, corn and raise beef 
cattle.
    The long history of discrimination by the United States Department 
of Agriculture (USDA) is not in dispute.
    Scholars, commissions, the courts, and even the Department itself 
have confirmed that USDA systematically denied loans, subsidies and 
other benefits to Black farmers that were routinely provided to white 
farmers.

   In 1965, the U.S. Commission on Civil Rights found \1\ that 
        discrimination in farm programs had contributed to a decline in 
        Black ownership of farmland.
---------------------------------------------------------------------------
    \1\ https://static.ewg.org/reports/2021/
BlackFarmerDiscriminationTimeline/1965_USCCR-Report.pdf.

   In 1968, the U.S. Commission on Civil Rights found \2\ that 
        Black farmers faced discrimination when seeking farm loans and 
        other forms of assistance.
---------------------------------------------------------------------------
    \2\ https://static.ewg.org/reports/2021/
BlackFarmerDiscriminationTimeline/1968_USCCR-Report.pdf.

   In 1970, the U.S. Commission on Civil Rights found \3\ 
        discrimination in the administration of USDA programs.
---------------------------------------------------------------------------
    \3\ https://static.ewg.org/reports/2021/
BlackFarmerDiscriminationTimeline/cr12en2.pdf.

   1982, the U.S. Commission on Civil Rights documented \4\ 
        discrimination complaints at USDA county offices.
---------------------------------------------------------------------------
    \4\ https://static.ewg.org/reports/2021/
BlackFarmerDiscriminationTimeline/1990_House-Report.pdf.

   In 1995, the [General Accounting] Office found \5\ USDA 
        county committees had few people of color.
---------------------------------------------------------------------------
    \5\ https://static.ewg.org/reports/2021/
BlackFarmerDiscriminationTimeline/1995_Minorities-and-Women-on-Farm-
Committees.pdf.

   In 1996, a study for USDA's Farm Services Agency found \6\ 
        farmers were not getting an equitable share of farm payments 
        and loans.
---------------------------------------------------------------------------
    \6\ https://static.ewg.org/reports/2021/
BlackFarmerDiscriminationTimeline/1996_DJ-Miller-Report.pdf.

   In 1997, USDA's Inspector General documented \7\ a ``climate 
        of disorder'' among USDA civil rights staff.
---------------------------------------------------------------------------
    \7\ https://static.ewg.org/reports/2021/
BlackFarmerDiscriminationTimeline/1997_IG-Report.pdf.

   In 1997, the Civil Rights Action Team created by USDA 
        documented \8\ stories of discrimination against farmers of 
        color.
---------------------------------------------------------------------------
    \8\ https://static.ewg.org/reports/2021/
BlackFarmerDiscriminationTimeline/1997-crat-report.pdf.

   In 1998, the USDA's Commission on Small Farms cites \9\ 
        discrimination as a cause of the decline of Black farmers.
---------------------------------------------------------------------------
    \9\ https://static.ewg.org/reports/2021/
BlackFarmerDiscriminationTimeline/1998-NCSF-Report.pdf.

   In 1999, a Federal court found \10\ USDA discriminated 
        against Black farmers by denying or delaying loans.
---------------------------------------------------------------------------
    \10\ https://acresofancestry.org/wp-content/uploads/2021/01/April-
1999-Court-Opinion-Approving-Consent-Decree-.pdf.

   In 2001, the U.S. Commission on Civil rights found \11\ 
        Black farmers waited four times longer than white farmers to 
        receive farm loans.
---------------------------------------------------------------------------
    \11\ https://static.ewg.org/reports/2021/
BlackFarmerDiscriminationTimeline/2001_USCCR-Report.pdf.

   In 2008, the Government Accountability Office reported \12\ 
        that USDA had still not resolved many discrimination 
        complaints.
---------------------------------------------------------------------------
    \12\ https://static.ewg.org/reports/2021/
BlackFarmerDiscriminationTimeline/2008_GAO-Report.pdf.

    But discrimination is not something that I read about in a report 
or a court transcript. I have attached to my testimony the reports by 
the Commission on Civil Rights, the Department of Agriculture, and the 
Government Accountability Office as well as written testimony I have 
presented to Congress over the years as the NBFA President that 
document this history of discrimination, differential treatment, and 
breach of trust by USDA. They also detail the struggle the NBFA has 
encountered at the USDA to end racial discrimination and achieve 
justice for Black Farmers as the NBFA was a named plaintiff in In Re 
Black Farmers Discrimination and has filed objections and sought legal 
remedies to protect Black Farmers in America.
    In 1983, I was introduced to the USDA Farmers Home Administration 
(now known as Farm Service Agency) by an elderly Black farmer who was 
fighting off foreclosure. Once I purchased the farm with a farm 
ownership loan, the lien was recorded in the local county courthouse. 
That was the being of my relationship or lack thereof that brings me 
before you today to discuss the ``State of Black Farmers''. I 
experienced racial discrimination personally when I sought farm 
operating loans from the Department. I was called ``boy.'' I was spit 
on. My loan applications on numerous occasions were torn up and thrown 
in the trash while I watched. Upon investigation by the USDA Office of 
Civil Rights, several applications were found unprocessed in my USDA 
file. In my county office, Black farmers were only seen on Wednesday--
or what came to be known as ``Black Wednesday.'' When Black farmers 
received USDA loans they were assigned ``supervised'' bank accounts 
which required white loan officers to co-sign every transaction.
    As a result of differential treatment and discrimination against 
Black farmers like myself, the number of Black farmers has fallen 
dramatically--from more than 900,000 in 1920 to less than 50,000 today.
    Unfortunately, the effects of discrimination by the Department can 
be felt decades after reaching historic settlement agreements. I 
reached a settlement agreement with USDA in 1997 which provided 
complete debt relief. In 2019, I was informed that USDA had breached 
the settlement agreement and over $600,000 in USDA liens remained 
against my farm according to a title search. I filed a complaint 
against USDA for Breach of Agreement and Retaliation because the 
amounts recorded in the liens were erroneous and the prepared 
Certificates of Satisfaction to release the liens had been prepared but 
never executed or filed as they remained unsigned by the local county 
FSA official in my USDA file. It wasn't until I secured and paid for 
the services of an attorney to file these Certificates that my farm was 
no longer in jeopardy of [land loss] at the hands of the USDA. This 
wasn't the 1st time USDA officials had failed to act upon my behalf and 
I am here today because I want to openly address why the NBFA has 
continued to call for accountability and transparency at the Department 
in 2021. Too many Black Farmers continue to request our assistance to 
address program complaints and civil rights violations.
    Discrimination continues to be reflected and reinforced by current 
USDA programs.
    While Black farmers receive about $60 million in annual commodity 
subsidies, white farmers annually receive about $10 billion in 
commodity subsidies.
    While an eligible Black farmer receives, on average, $7,755 in 
commodity subsidies, an eligible white farmer receives, on average, 
$17,206 in commodity subsidies.
    Like commodity subsidies, ad hoc disaster payments also 
overwhelmingly flow to white farmers.
    Experts found that 99% of the Market Facilitation Payments made to 
offset the effects of President Trump's trade war went to white 
farmers. Experts also found that 97% of Coronavirus Food Assistance 
Payments made to address the [COVID]-19 pandemic went to white farmers.
    The disparity in the crop insurance program--which requires a 
farmer-paid premium many Black farmers cannot afford--may be even 
greater, but Congress will not lift the veil of secrecy that hides who 
receives crop insurance subsidies.
    As you know, arm income support payments are tied to production or 
revenue. The largest 10% of subsidy recipients collect more than half 
of all subsidies. Virtually all of these farmers are white.
    The result of decades of discrimination is that Black farms are 
smaller, and our revenues are smaller than those of our white 
neighbors. Therefore, eligible Black farmers receive less support from 
USDA and fall further and further behind. What's more, a 
disproportionate share of Black farmers produce farm products that are 
not even eligible for traditional subsidies.
    Rather than right these historic wrongs, government programs have 
largely perpetuated systemic racism.
    In response to discrimination by the Department, I joined with 
other farmers to sue USDA, which resulted in the Pigford and In Re: 
Black Farmers Discrimination settlements. By acknowledging the long 
history of discrimination, the Black Farmer settlements were an 
important first step. But they failed to provide farmers the debt 
relief Black farmers needed.
    During the Trump Trade war, it was unacceptable that foreign owned 
corporations benefited at an alarming rate while tax-paying American 
farmers such as myself received min[u]scule amounts of the relief 
designated with stated purpose to help American Farmers. Economic 
fairness was at stake in that matter but failed to provide much needed 
relief for the disruption to our farms.
    On June 19, 2019, I testified before the U.S. Financial Services 
Committee. I stated, ``Unless there is a set aside amount for support 
of small-scale farmers in the proposed $16 Billion Bailout, we will be 
treated as invisible and insignificant participants in the process. 
Policy decisions regarding farmers will continue to disproportionately 
reward foreign-owned corporations and exclude already disadvantaged 
farmers in our category. Justice would be served in the current crisis 
by a vote for bipartisan legislation from this Committee to set aside 
$5 Billion to help address the needs of Black and other small-scale 
farmers. Fair treatment is all we are asking. Just justice.'' \13\
---------------------------------------------------------------------------
    \13\ https://docs.house.gov/meetings/BA/BA10/20190619/109679/HHRG-
116-BA10-Wstate-BoydJ-20190619-U1.pdf (video testimony: https://
youtu.be/Ibm-zA4wQII)
---------------------------------------------------------------------------
    By providing debt relief to Black farmers and other farmers of 
color, the American Rescue Plan Act begins to fulfil the promises of 
the Black Farmers lawsuits and, more importantly, gives new life to 
Black farmers facing foreclosure. But there is still much more to be 
done to right these historic wrongs and to ensure that Black farmers 
remain part of the fabric of American agriculture.
    To support Black farmers, we must reform our subsidy and crop 
insurance programs to level the playing field between white farmers and 
Black farmers. We must make these programs more transparent, so Black 
farmers can see whether promised reforms are actually working. We must 
expand access to land and credit so that Black farmers can expand our 
operations. And we must improve outreach and technical assistance to 
Black farmers who have been treated as second-class citizens by the 
Department for too long.
    Thank you, Chairman Scott, for holding this historic hearing.
                                Appendix
    Editor's note: the documents listed were submitted by the witness 
as an Appendix. They are listed here in the order that they were 
submitted. Due to its size the Appendix is retained in Committee file, 
and the individual documents are available online at the hyperlinks 
noted. Note: items marked with () denote that in addition to the 
excerpt the full report is retained in Committee file.

  1.  USDA RBS Research, Report 194: Black Farmers in America, 1865-
            2000 The Pursuit of Independent Farming and the Role of 
            Cooperatives (https://www.rd.usda.gov/files/RR194.pdf) \14\
---------------------------------------------------------------------------
    \14\ Note: contained further on in the Appendix is an excerpt from 
this report, p. 24 (Appendix Table 3--Farm operators in the U.S. by 
race, 1900 to 1997).

  2.  USDA NASS, 1964 Census of Agriculture, Vol. 2, Part 8, Color, 
            Race, and Tenure of Farm Operator (http://lib-usda-
            05.serverfarm.cornell.edu/usda/AgCensusImages/1964/02/08/
            1964-02-08.pdf), Table 4. Number of Negro and Other 
            Nonwhite Farm Operators, by Regions and States: 1900 to 
---------------------------------------------------------------------------
            1964, p. 761 

  3.  USDA NASS, 1964 Census of Agriculture, Vol. 2, Part 8, Color, 
            Race, and Tenure of Farm Operator (http://lib-usda-
            05.serverfarm.cornell.edu/usda/AgCensusImages/1964/02/08/
            1964-02-08.pdf), Table 3. Number of Farms by Color and by 
            Tenure of Operator, and Land in Farms by Tenure and 
            Operator, by Regions and States: 1880 to 1964, p. 756 

  4.  U.S. Commission on Civil Rights, 1965, Equal Opportunity in Farm 
            Programs: An Appraisal of Services Rendered by Agencies of 
            the United States Department of Agriculture. A Report of 
            the United States Commission on Civil Rights, 1965 (http://
            files.eric.ed.gov/fulltext/ED068206.pdf)

  5.  U.S. Commission on Civil Rights, 1965, Civil Rights Under Federal 
            Programs: An Analysis of Title VI of The Civil Rights Act 
            of 1964 (https://hdl.handle.net/2027/mdp.39015019789091) 
            \15\
---------------------------------------------------------------------------
    \15\ Note: this document is available at a variety of university 
sites; however, in all extant instances they are using the ``Digitized 
by Google'' copy.

  6.  U.S. Commission on Civil Rights, 1970, Federal Civil Rights 
            Enforcement Effort: A Report of The United States 
            Commission on Civil Rights 1970 (https://
            www2.law.umaryland.edu/marshall/usccr/documents/
---------------------------------------------------------------------------
            cr12en2.pdf), pp. I-III, 48-49 

  7.  USDA, January 1981, A Time to Choose: Summary Report on the 
            Structure of Agriculture (https://archive.org/details/
            timetochoosesumm00unit/page/n1/mode/2up)

  8.  U.S. Commission on Civil Rights, February 1982, The Decline of 
            Black Farming in America (https://files.eric.ed.gov/
            fulltext/ED222604.pdf)

  9.  USDA, Economic Research Service, July 1986, Rural Development 
            Research Report Number 59, Black Farmers and Their Farms 
            (https://static.ewg.org/reports/2021/
            BlackFarmerDiscriminationTimeline/1982_USDA-History.pdf)

  10. House Rept. 101-984, The Minority Farmer: A Disappearing American 
            Resource; Has The Farmers Home Administration Been The 
            Primary Catalyst? (https://books.google.com/books/download/
            Congressional_Serial_Set.pdf) \16\
---------------------------------------------------------------------------
    \16\ Note: the submission in the Appendix document is from a 
LexisNexis printout of the House report. The item retained in Committee 
file is a pdf excerpted from the Congressional Serial Set 14029 
digitized by Google.

  11. USDA, February 1997, Civil Rights at the United States Department 
            of Agriculture: A Report by the Civil Rights Action Team 
            (https://static.ewg.org/reports/2021/
            BlackFarmerDiscriminationTimeline/1997-crat-report.pdf), p. 
---------------------------------------------------------------------------
            9 

  12. U.S. DOJ, 1994, Vol. 18, Authority of USDA to Award Monetary 
            Relief for Discrimination \17\ (https://www.justice.gov/
            olc/file/626886/download), pp. 52-73 
---------------------------------------------------------------------------
    \17\ Note: this is an excerpt from the U.S. Department of Justice 
report entitled, Opinions of the Office of Legal Counsel of the United 
States Department of Justice Consisting of Selected Memorandum Opinions 
Advising the President of the United States, the Attorney General and 
Other Executive Officers of the Federal Government in Relation to Their 
Official Duties, Volume 18, 1994.

  13. U.S. GAO, September 29, 1995, GAO/GGD-95-211, Equal Employment 
            Opportunity Women and Minority Representation at Interior, 
            Agriculture, Navy, and State (https://www.gao.gov/assets/
---------------------------------------------------------------------------
            ggd-95-211.pdf)

  14. U.S. GAO, March 1, 1995, GAO Decision, B-260588, RCED-95-113R, 
            Minorities and Women on Farm Committees (https://
            www.gao.gov/assets/rced-95-113r.pdf)

  15. USDA FSA, March 4, 1996, D.J. Miller Disparity Study Final 
            Report, Producer Participation and EEO Complaint Process 
            Study for the Farm Service Agency (FSA) of the U.S. 
            Department of Agriculture, Part I, Vol. I-II (https://
            static.ewg.org/reports/2021/
            BlackFarmerDiscriminationTimeline/1996_DJ-Miller-
            Report.pdf)

  16. USDA CRIT, September 1997, Implementation of the Civil Rights 
            Action Team Report at USDA: An Interim Progress Report 
            (https://permanent.fdlp.gov/lps15852/critprog.pdf)

  17. U.S. GAO, March 19, 1997, GAO/T-RCED-97-112, Farm Programs: 
            Efforts to Achieve Equitable Treatment of Minority Farmers 
            (https://www.gao.gov/assets/t-rced-97-112.pdf)

  18. USDA OIG, February 27, 1997, Report No. 50801-2-Hq(1), Report for 
            the Secretary on Civil Rights Issues--Phase I, Farm Loan 
            Programs--Civil Rights Complaint System Evaluation (https:/
            /www.usda.gov/sites/default/files/oig.htm)

  19. U.S. District Court for D.C., April 14, 1999, Civil Action No 97-
            1978 (PLF), Timothy C. Pigford, et al., Plaintiffs, v. Dan 
            Glickman, Secretary, The United States Department Of 
            Agriculture, Defendant. Civil Action No. 98-1693 (PLF), 
            Cecil Brewington, et al., Plaintiffs, v. Daniel R. 
            Glickman, Defendant, Notice of Class Certification and 
            Proposed Class Settlement (https://www.dm.usda.gov/
            pigford.pdf)

  20. USDA NCSF, January 1998, A Time to Act: A Report of the USDA 
            National Commission on Small Farms (https://archive.org/
            download/timetoact
            1545usda/timetoact1545usda.pdf)

  21. U.S. District Court for D.C., April 14, 1999, Civil Action No 97-
            1978 (PLF), Timothy C. Pigford, et al., Plaintiffs, v. Dan 
            Glickman, Secretary, The United States Department of 
            Agriculture, Defendant. Civil Action No. 98-1693 (PLF), 
            Cecil Brewington, et al., Plaintiffs, v. Daniel R. 
            Glickman, Defendant, Opinion (https://
            media.dcd.uscourts.gov/pigfordmonitor/orders/
            19990414op.pdf)

  22. USDA NRCS, undated, Civil Rights at USDA: A Backgrounder on 
            Efforts by the Obama Administration (https://
            www.law.umich.edu/facultyhome/margoschlanger/Documents/
            Publications/Offices_of_Goodness/USDA Civil Rights at USDA 
            A Backgrounder on Efforts by the Obama Administration.pdf)

  23. U.S. Commission on Civil Rights, February 2001, Racial and Ethnic 
            Tensions in American Communities: Poverty, Inequality, and 
            Discrimination. Volume VII: The Mississippi Delta Report 
            (https://files.eric.ed.gov/fulltext/ED457307.pdf)

  24. USDA NASS, June 2004, 2002 Census of Agriculture, AC-02-A-51, 
            United States Summary and State Data, Volume 1, Geographic 
            Area Series, Part 51 (http://lib-usda-
            05.serverfarm.cornell.edu/usda/AgCensusImages/2002/01/51/
            2002-01-51.pdf), pp. 48-49 

  25. USDA NASS, December 2009, 2007 Census of Agriculture, AC-07-A-51, 
            United States Summary and State Data, Volume 1, Geographic 
            Area Series, Part 51 (https://www.nass.usda.gov/
            Publications/AgCensus/2007/Full_Re
            port/Volume_1,_Chapter_1_US/usv1.pdf), pp. 58-61 

  26. U.S. GPO, 110-246, Statute Compilation, December 20, 2018, 110-
            246--Food, Conservation, and Energy Act of 2008.xml 
            (https://www.agriculture.senate.
            gov/imo/media/doc/110-246_Food, Conservation, And Energy 
            Act Of 2008.pdf), pp. 92-95  \18\
---------------------------------------------------------------------------
    \18\ Note: the full compilation is retained in Committee file. 
Further note: the compilation has been updated as of January 8, 2019 
(https://www.govinfo.gov/content/pkg/COMPS-10237/pdf/COMPS-10237.pdf).

  27. U.S. GAO, October 22, 2008, GAO-09-62, U.S. Department of 
            Agriculture: Recommendations and Options to Address 
            Management Deficiencies in the Office of the Assistant 
            Secretary for Civil Rights (https://www.gao.gov/assets/gao-
---------------------------------------------------------------------------
            09-62.pdf)

  28. Committee on Oversight and Government Reform Hearing, 
            Subcommittee on Government Management, Organization, and 
            Procurement, May 14, 2008 Management of Civil Rights at the 
            USDA (https://www.govinfo.gov/content/pkg/CHRG-
            110hhrg48172/pdf/CHRG-110hhrg48172.pdf), Serial No. 110-137

  29. USDA OASCR, November 5, 2010, Informational Memorandum for Deputy 
            Chief of Staff to the Secretary, Proposed Resolution to 
            Adjust the Recorded Yields of Black Farmers in Clarendon 
            County, South Carolina (https://static.ewg.org/reports/
            2021/BlackFarmerDiscriminationTimeline/2010_Black-Farmers-
            Yield-Clarendon-SC.pdf)

  30. U.S. DOJ, February 18, 2010, Department of Justice and USDA 
            Announce Historic Settlement in Lawsuit by Black Farmers 
            Claiming Discrimination by USDA (https://www.justice.gov/
            opa/pr/department-justice-and-usda-announce-historic-
            settlement-lawsuit-black-farmers-claiming)

  31. 111th Congress, H.R. 2847, An Act making appropriations for the 
            Departments of Commerce and Justice, and Science, and 
            Related Agencies for the fiscal year ending September 30, 
            2010, and for other purposes. (https://www.congress.gov/
            111/bills/hr2847/BILLS-111hr2847eah.pdf), pp. 90-97  \19\
---------------------------------------------------------------------------
    \19\ Note: the bill was signed into law (Public Law 111-147 
(https://www.congress.gov/111/plaws/publ147/PLAW-111publ147.pdf)) March 
18, 2010.

  32. USDA Office of the Administrative Law Judges, Office of Hearings 
            and Appeals, February 13, 1984, SOL Docket No. 09-0177 
            Charles McDonald, Complainant v. Tom Vilsack, Secretary, 
            United States Department Of Agriculture, Decision and Order 
            (https://oalj.oha.usda.gov/sites/default/files/100708SOL09-
---------------------------------------------------------------------------
            0177DO.pdf)

  33. USDA NASS, May 8, 2019, 2012 Census of Agriculture, Race, 
            Ethnicity and Gender Profiles, United States (https://
            www.nass.usda.gov/Publications/AgCensus/2012/
            Online_Resources/Race,_Ethnicity_and_Gender_Profiles/
            cpd99000.pdf)

  34. USDA NASS, September 2014, ACH12-10, 2012 Census of Agriculture 
            Highlights, Black Farmers: Up 12 percent since 2007; most 
            live in southern states (https://www.nass.usda.gov/
            Publications/Highlights/2014/Highlights_
            Black_Farmers.pdf)

  35. U.S. District Court for D.C., April 1, 2012, Civil Action No 97-
            1978-PLF, Document 1812, Monitor's Final Report on Good 
            Faith Implementation of the Consent Decree and 
            Recommendation for Status Conference (https://
            media.dcd.uscourts.gov/pigfordmonitor/reports/
            Rpt20120331_final.pdf) \20\
---------------------------------------------------------------------------
    \20\ Note: there is an Appendix (https://media.dcd.uscourts.gov/
pigfordmonitor/reports/Rpt20120331_final-app.pdf) to the report. This 
document was not included in the submission; therefore, it is also 
retained in Committee file.

  36. USDA NASS, September 2, 2020, 2017 Census of Agriculture, Race, 
            Ethnicity and Gender Profiles, United States (https://
            www.nass.usda.gov/Publications/AgCensus/2017/
            Online_Resources/Race,_Ethnicity_and_Gender_Profiles/
---------------------------------------------------------------------------
            cpd99000.pdf)

  37. USDA NASS, April 2019, 2017 Census of Agriculture, AC-17-A-51, 
            United States Summary and State Data, Volume 1, Geographic 
            Area Series, Part 51 (https://www.nass.usda.gov/
            Publications/AgCensus/2017/Full_Report/
            Volume_1,_Chapter_1_US/usv1.pdf), pp. 72-75 

  38. U.S. GAO, July 11, 2019, GAO-19-539, Agricultural Lending: 
            Information on Credit and Outreach to Socially 
            Disadvantaged Farmers and Ranchers Is Limited (https://
            www.gao.gov/assets/gao-19-539.pdf)

  39. Warren Democrats, undated, Addressing Discrimination and Ensuring 
            Equity for Farmers of Color (https://elizabethwarren.com/
            plans/equity-farmers-of-color)

  40. Onika Abraham, Director, Farm School NYC, New York, et al., 
            letter dated August 31, 2019, Re: Justice for Black Farmers 
            (https://static.ewg.org/reports/2021/
            BlackFarmerDiscriminationTimeline/2019_WARREN-LETTER.pdf)

  41. 116th Congress, S. 4929, Justice for Black Farmers Act of 2020 
            (https://www.congress.gov/116/bills/s4929/BILLS-
            116s4929is.pdf)

  42. U.S. GAO, February 24, 2021, GAO-21-399T, Financial Services: 
            Fair Lending, Access, and Retirement Security (https://
            www.gao.gov/products/gao-21-399t)

  43. 117th Congress, H.R. 1319, Union Calendar No. 1, American Rescue 
            Plan Act of 2021 (https://www.congress.gov/117/bills/
            hr1319/BILLS-117hr1319rh.
            pdf) \21\
---------------------------------------------------------------------------
    \21\ Note: the bill was signed into law (Public Law 117-2) March 
11, 2021; however, as of this date (April 6, 2021) the Public Law has 
not been published the enrolled version (https://www.congress.gov/117/
bills/hr1319/BILLS-117hr1319enr.pdf) is the latest available copy.

  44. Emergency Relief for Farmers of Color Act (https://
            static.ewg.org/reports/2021/
---------------------------------------------------------------------------
            BlackFarmerDiscriminationTimeline/2021_Warnock.pdf)

    Submitted as Separate Items (Not in Appendix), the documents that 
are available online will not be republished herein, and are available 
at the hyperlinks noted.

  1.  USDA, Apr. 2020, Commitment to Progress: Civil Rights at the 
            United States Department of Agriculture (https://
            archive.org/details/CAT11079176)

  2.  Case: 20-16758, February 19, 2021, National Association of Wheat 
            Growers, et al., Plaintiffs--Appellees, v. Xavier Becerra, 
            in His Official Capacity as Attorney General of the State 
            of California, Defendant--Appellant, and Lauren Zeise, in 
            Her Official Capacity as Director of the Office of 
            Environmental Health Hazard Assessment, Defendant. Amicus 
            Curiae Brief of the National Black Farmers Association in 
            Support of Appellant and Reversal (https://docs.house.gov/
            meetings/AG/AG00/20210325/111400/HHRG-117-AG00-Wstate-
            BoydJ-20210325-SD013.pdf)
                            Submission No. 3
January 28, 1997
Informational Memorandum to the Secretary
    Subject: Discrimination Complaints filed by Minority Farmers in the 
    State of Virginia
    To: Dan Glickman, Secretary of Agriculture
    From: Lloyd A. Jones, State Director, USDA Rural Development

    The purpose of this memorandum is to provide an overview and 
general assessment of the activities and process which lead to 
preliminary investigations of alleged discriminatory practices at the 
local level of the United States Department of Agriculture (USDA). This 
memorandum is intended to serve as a confirmation that discriminatory 
practices appear to have imposed themselves upon our external customers 
(in particular, minority farmers) in Mecklenburg, Brunswick, Lunenburg 
and other counties in southside and southeastern Virginia. It is my 
opinion that these discriminatory practices are the result of three 
main components which are noted as follows: super intense regulatory 
barriers which are unfriendly to the small producers, poor quality 
customer service (with a healthy portion of weak employee performance), 
and a lack of sensitivity for the needs and limited resources of small 
producers (to include an apparent unwillingness to communicate with 
some producers in a manner that they could understand the regulatory 
requirements imposed by the agency, meaning the Farmers Home 
Administration, in the customer's attempt to obtain a loan or to 
service an existing loan) by some employees within USDA. This report is 
my effort to relay to you a chronology of events that took place in 
response to charges that were brought to my attention by minority 
farmers.
    As a former career, and currently a political appointee, civil 
servant, I have worked for the Department of Agriculture for more than 
20 years. During that time, I have had the opportunity to observe and 
react to issues that could be construed as poor customer service. It is 
my belief that the support and enforcement of the civil rights and EEO 
law within USDA have been monumental challenges for both senior and 
mid-level management. As a State Director, it is my responsibility to 
make sure that these laws, as mandated by Congress and the Clinton 
Administration, are successfully administered.
    Recently, there has been a flurry of complaints, allegations, 
innuendoes and misstatements concerning discrimination complaints and 
activities within the Farmers Home Administration (FmHA) in Virginia. 
The following chronological history of events that took place should 
clarify most, if not all, of these allegations.
Chronological History
John W. Boyd, Jr.
    February 19, 1992--A discrimination complaint was received from Mr. 
Boyd by the Farmer Programs Chief, Herman Lundy, and the State Civil 
Rights Manager, Ava Marshall.
    February 24, 1992--A copy of the discrimination complaint was sent 
to the National Office Equal Opportunity Division in Washington, D.C.
    April 2, 1992--The State Director notified the County Supervisor of 
problems found in a review of Mr. Boyd's case by the Farm Division in 
the State Office which indicated that application and loan processing 
had been handled inappropriately. An explanation was requested.
    April 21, 1992--The County Supervisor wrote a response to the State 
Director's request indicating he believed he had handled Mr. Boyd's 
case in all fairness and in accordance with FmHA procedures.
    June 22, 1992--The State Director notified the County Supervisor of 
the importance of processing requests within the timeframes stated in 
FmHA procedures.
    July 17, 1992--A request for preliminary inquiry was received by 
the State Office from the National Office Equal Opportunity Staff for 
investigation.
    Due to illness, Ava Marshall was unable to act on the preliminary 
inquiry for approximately 45 days. She communicated with the National 
Office on several occasions to inform them of her efforts to respond to 
their request.
    April 9, 1993--Ava Marshall became seriously ill and was diagnosed 
with multiple sclerosis.
    On or about May 9, 1993--A Civil Rights team from Mississippi came 
to the Virginia State FmHA office to assist in completing the 
preliminary inquiry assignment which was being conducted by Ava 
Marshall.
    May 12, 1993--The State Director wrote to the County Supervisor 
acknowledging that the restructuring of Mr. Boyd's farm loans were not 
completed. The County Supervisor did not follow instructions at the 
time he ran the Debt Adjustment Loan Restructuring System (DALR$) 
program. He forgot to include the $5,000.00 Operating Loan. The County 
Supervisor was directed to take appropriate corrective actions within 
thirty (30) days.
    May 14, 1993--A loan review made by Russell L. Marsh, Farmer 
Programs Chief, indicated this case had not been properly handled by 
James Garnett, the Chase City County Supervisor. Mr. Boyd had no chance 
of meeting his obligations due to the failure to properly service his 
loan accounts by the County Supervisor. His FmHA accounts had been 
referred to a credit bureau by the County Supervisor and is currently 
showing up as delinquent when, in fact, they should be current. Mr. 
Boyd also stated that a payment of $3,100.00 made in late 1992 was 
never credited to his account. The County Supervisor was given thirty 
(30) days to correct these actions.
    June 1, 1993--The findings of the team from Mississippi were sent 
to the National Office Equal Opportunity Staff.
    On or about December 12, 1993--Doug McDowell, Equal Opportunity 
Specialist, from the National Office called Ava Marshall, State Civil 
Rights Manager, and informed her the Mississippi report was 
unsatisfactory and more information was needed on this case.
    January 4, 1994--A new request for additional information was sent 
to Ava Marshall to research, gather information, and prepare a report 
which required a considerable amount of time.
    June 16, 1994--Ava Marshall, State Civil Rights Manager, compiled 
and sent new information with recommendations and conclusions to 
Washington, D.C.
    June 24, 1994--The State Civil Rights Manager met with Russell Lee 
Marsh, Farmer Programs Chief, to discuss payments Mr. Boyd indicated 
were made and not credited to his account. The wrong amount was 
credited to Mr. Boyd's account and too much was given to another 
borrower. Mr. Marsh instructed the County Office to reverse the payment 
from the other borrower's account and apply the correct amount to Mr. 
Boyd's account. They are to notify Mr. Marsh when this is completed. 
Once completed, everything in the original May 12, 1993, memorandum 
must still be done. He indicated this needed to be done right away so 
the accounts could be properly set up, and the loan be serviced in 
accordance with FmHA Instructions.
    July 14, 1994--The State Director notified Sharron Longino, 
Associate Administrator, FmHA, that after Mr. Boyd having been in 
business for ten (10) years, the FmHA Chase City County Supervisor's 
actions had put him further behind in his farming operations and debt 
servicing than he was when he started. Mr. Boyd had no farm income to 
pay his loans and relied totally on non-farm income for his family 
living expenses. FmHA was holding a mortgage on Mr. Boyd's farm with a 
new poultry house which was not even being utilized. The County 
Supervisor and District Director provided no supervisory support to Mr. 
Boyd which increased his chances for failure.
    August 15, 1994--The National Office Farmer Programs Division 
reviewed Mr. Boyd's case and provided specific recommendations to the 
Equal Opportunity Staff for reconciling the problems with this case.
    September 12, 1994--The National Office responded with corrective 
servicing actions to resolve this case.
    October 11, 1994--Mr. Boyd and his attorney met with the State 
Director, the Farmer Programs Chief, and six (6) other members of the 
FmHA staff to discuss items outlined in the letter from the National 
Office.
    October 24, 1994--The State Director wrote to Mr. Boyd notifying 
him of the corrective actions that were to be taken by the Chase City 
County Office concerning his farm accounts.
    October 24, 1994--The State Director wrote to Mr. Boyd notifying 
him of actions taken on his FmHA rural housing application.
    November 1, 1994--The State Director responded to the National 
Office regarding the outcome of the letter dated September 12, 1994. 
This letter indicated that all corrective actions suggested by the 
National Office were not completed. Mr. Boyd was not satisfied with the 
results of the meeting or the actions taken by the State Office staff, 
and proceeded to inform the National Office that he wanted to continue 
with his complaint as filed.
    January 10, 1995--The new Chase City County Supervisor, Anne J. 
Rickman, provided the State Director with an update on the status of 
Mr. Boyd's loan restructuring and information needed on an operating 
loan.
    October 1, 1995--Farm Service Agency assumed responsibility for 
agricultural credit lending activities.
    April 5, 1996--J. Calvin Parrish, Acting State Executive Director, 
Farm Service Agency, sent Mr. Boyd a copy of his 1992 original 
discrimination complaint.
    October 11, 1996--The final decision of USDA, signed by Wardell C. 
Townsend, Jr., Assistant Secretary for Administration and Designated 
Director of Equal Opportunity Officer, on John Boyd's February 18, 1992 
complaint alleging discrimination based on race, found that 
discrimination on the basis of race had occurred and ordered corrective 
actions be offered.
    November 26, 1996--Otis Dailey, District Director, Farmville, 
Virginia, reported that according to the final decision from Wardell C. 
Townsend, Jr., the Assistant Secretary for Administration and 
Designated Director of Equal Opportunity Officer dated October 11, 
1996, the complainant met with him in April 1988 to express concerns 
about James Garnett failing to process loan applications and the 
acceleration of John Boyd's account. Mr. Dailey said that he does not 
deny meeting with Mr. Boyd, but he does not remember it. Mr. Dailey 
reported he does not recall Mr. Boyd contacting or attempting to 
contact him until the summer of 1996 concerning a 502 Rural Housing 
application he filed in the Chase City Office and assigned to the 
District Office for processing. Prior to the appeal date set up by the 
Appeals Officer, Mr. Boyd called and requested information from his 
file for the meeting. Mr. Dailey met Mr. Boyd in Chase City and 
assisted him with what he needed for the appeal. The day Mr. Boyd met 
with Mr. Dailey, Mr. Boyd asked that he follow him out of the office 
into the hall. Mr. Boyd made statements about Mr. Garnett's handling of 
his farm loans, and felt it was because of his race. Again, Mr. Boyd 
said that he met with Mr. Dailey years ago about the charges made 
against Mr. Garnett. Mr. Dailey stated that there were no specific 
incidents that could be considered discriminatory.
    Mr. Dailey was notified by memorandum from the State Director that 
Mr. Boyd had filed a Civil Rights complaint alleging discrimination. In 
June 1993, Anne Rickman, District Farm Specialist, was assigned to the 
District Office. All responsibilities for farm loans were designated to 
Anne Rickman. The Farm Program was handled by the State Office through 
the District Farm Specialist. Mr. Dailey reported that, at that time, 
he was distanced from farm activities in the District Office and the 
John Boyd case. In a discussion with the District Farm Specialist, Anne 
Rickman, later to be the new Chase City County Supervisor, it was 
reported the complainant's requests were being taken care of to resolve 
the concerns. Mr. Dailey stated he had had no contacts with Mr. Boyd 
since being informed that his complaint had been turned over to the 
State Civil Rights Manager in 1992. Mr. Dailey states specifically, as 
District Director, he was not involved ``in the loop.'' Mr. Dailey 
stated that in his position, it was like one hand did not know what the 
other was doing. Mr. Dailey stated that the District Farm Specialist 
representing him was actively and aggressively working towards 
``fixing'' Mr. Boyd's loan problems, thereby keeping him on his farm 
and operational. Mr. Dailey stated that in discussions with the 
District Farm Specialist and regular contacts with the County Office, 
it was reported Mr. Boyd's problems were being handled. Mr. Dailey met 
with Mr. Boyd in the summer of 1996 in the Chase City Office. Mr. 
Dailey said it is to be noted that he was questioned about this case, 
officially, approximately February 1994. This was after the County 
Supervisor had been forced to accept a transfer or separate from the 
agency, and the performance appraisal for the County Supervisor had 
been completed. Mr. Dailey stated that his comments were taken out of 
``context'' during the February 1994 meeting.
Chronological History
Willie L. Crute, Jr.
    January 22, 1994--Discrimination complaint was filed by Mr. Willie 
Crute based on race against James Garnett, County Supervisor, Chase 
City, Virginia.
    February 17, 1994--A copy of the discrimination complaint was sent 
to the National Office Equal Opportunity Division by the State 
Director.
    March 18, 1994--Freedom of Information Act (FOIA) request was 
submitted to Lloyd A. Jones, State Director, by Mr. Crute's attorney, 
requesting documents related to loan applications filed by Mr. Willie 
L. Crute, Jr.
    April 20, 1994--Freedom of Information Act request was denied in 
part and appeal rights were given by Randall M. Welch, FOIA Officer.
    May 23, 1994--Request for preliminary inquiry into this complaint 
was requested by Carlton L. Lewis, Chief, Program Compliance Branch, 
Equal Opportunity Staff, FmHA, National Office.
    June 2, 1994--Freedom of Information Act appeal requested by Mr. 
Crute's attorney on the initial request for information.
    July 1, 1994--Freedom of Information Act request was made by Willie 
L. Crute, Jr. for several documents in his file.
    July 18, 1994--Two (2) of the items in Mr. Crute's request for 
information were sent; approval from the National Office on the other 
three (3) items was requested.
    July 19, 1994--The results of the preliminary inquiry were sent to 
the National Office Equal Opportunity Staff for review.
    August 9, 1994--The results of the preliminary inquiry were sent 
back for recommendations and summary of the events. Ava Marshall, State 
Civil Rights Manager, had made recommendations and conclusions, 
previously; however, when reviewed by her supervisor, Mr. Reginald 
Rountree, she was instructed to remove them.
    August 16, 1994--The results of the preliminary inquiry were 
resubmitted with recommendations and conclusions to the National Office 
Equal Opportunity Staff as requested.
    December 21, 1994--Request was received from Philip Southers, 
Attorney, OGC, to close their files on Willie L. Crute, Jr.
    January 9, 1995--Response from Lloyd A. Jones, State Director, in 
reference to the memorandum dated December 21, 1994. Mr. Jones advised 
Mr. Southers to keep the files open since Mr. Crute had filed a law 
suit against the agency.
    October 1, 1995--Farm Service Agency assumed responsibility for the 
agricultural credit lending activities.
    January 24, 1996--Donald L. Davis, State Executive Director, Farm 
Service Agency, wrote to Mr. Crute notifying him they were not aware of 
any offer to settle his complaint by the National Office, and offered 
him an opportunity to file a Tort Claim if he wanted to do so. Mr. Lee 
Marsh, AgCredit Director, sent Mr. Crute a Tort Claim form to complete.
    July 1, 1996--The final decision of USDA, signed by Wardell C. 
Townsend, Jr., Assistant Secretary for Administration and Designated 
Director of Equal Opportunity Officer, on Willie L. Crute, Jr.'s 
January 22, 1994 complaint alleging discrimination based on race, found 
that discrimination on the basis of race had occurred.
    November 26, 1996--Otis Daily, District Director, reported that 
through his regular contacts with the Chase City Office and the 
District Farm Specialist, he learned Mr. Crute had filed a 
discrimination complaint being handled by the State Civil Rights 
Manager. He stated that to his knowledge, no contacts were ever made by 
him with Mr. Crute.
Chronological History
Eric R. Rice
    August 24, 1993--Mr. Eric R. Rice filed a discrimination complaint 
based on race against Mr. Charles M. Featherston, County Supervisor, 
Brunswick County FmHA Office.
    October 19, 1993--Instructions for completing a preliminary inquiry 
on Eric R. Rice was sent to the State Director.
    April 15, 1994--Jacqui Micheli, Equal Opportunity Specialist, 
National Office, Equal Opportunity Staff, mailed Ava Marshall a copy of 
the preliminary inquiry report of Eric R. Rice that was done by Pat 
Baker, state Civil Rights Coordinator, Delaware. Ms. Baker concluded 
from her investigation, the major problem in the Brunswick County 
Office was the attitude of the County Supervisor. She stated that, for 
many years, the Black farmers felt Mr. Featherstun had total control of 
the FmHA office and their applications/benefits. She reported the 
processing cards did not show a large discrepancy in processing time; 
however, a review of the files did show the servicing attitude which 
may have deterred minorities from applying for all benefits/options, 
because they felt it would do them no good. Ms. Baker admitted in her 
conclusions that since she was from another state, she did not have 
enough time to fully complete the review of all items reported by the 
Black farmers serviced by this County Office to determine if 
differences were made between Black and white farmers in areas of loan 
making.
    January 3, 1995--Records show that Carrie Schmidt, Acting State 
Civil Rights Coordinator, in the absence of Ava Marshall, State Civil 
Rights Manager, requested in a letter signed by Lloyd A. Jones, State 
Director, to the Maryland/Delaware State Director for his State Civil 
Rights Coordinator to assist Virginia on this preliminary inquiry. 
These records are very hard to understand because the letter is dated 
January 3, 1995, and requesting assistance from the State Civil Rights 
Coordinator in Delaware from November 15, 1993, through November 19, 
1993. Apparently there was a typographical error in the dates noted.
    February 2, 1995--A letter sent from Vicky E. Hunt, Acting Chief, 
Program Complaints Adjudication Division, to Cheryl Prejean Greaux, 
Director, Equal Opportunity Staff, transmitting a copy of the 
Department's final decision on the discrimination complaint of Mr. Eric 
R. Rice. Ms. Hunt told Ms. Greaux that she had forwarded her request to 
conduct an onsite investigation into the discrimination complaints of 
Mr. Rice and other minority farmers in Lawrenceville, Virginia, to the 
Evaluation and Investigation Division for appropriate action. Mr. 
Rice's complaint from a civil rights standpoint was closed at this 
time.
    February 10, 1995--A letter from the Department went to Mr. Rice 
stating his complaint was not determined to be discrimination based on 
race.
    April 3, 1995--A letter from Carlton L. Lewis, Branch Chief, 
Program Compliance Staff, Civil Rights Division, was sent to Lloyd A. 
Jones, State Director, indicating the Department had responded to Mr. 
Rice's complaint with a decision that discrimination had not occurred 
and the file should be closed.
    August 3, 1995--A letter from Mike Espy, Secretary of Agriculture, 
was sent to Eric R. Rice asking for additional information to be 
provided to continue investigation of his discrimination complaint. He 
was given fifteen (15) days to respond to this letter. He was told if 
FmHA did not receive the information on his complaint, the case would 
be closed. Secretary Espy indicated his files would be returned to the 
Virginia FmHA State Director to consider Mr. Rice's application for 
debt settlement.

          (Note: This file was given to us by Farm Service Agency to 
        prepare this report and is not complete. We do not have a copy 
        of the preliminary inquiry, and most of the dates in the 
        information we have are conflicting throughout the file.)
Chronological History
Sherman D. Witcher
    January 25, 1994--Mr. Witcher filed a discrimination complaint 
based on age and race.
    February 17, 1994--Mr. Witcher's discrimination complaint was sent 
to the Equal Opportunity Division in the National Office requesting a 
guide for conducting a preliminary inquiry.
    March 23, 1994--A letter was sent by Lloyd A. Jones, State 
Director, resubmitting copies of the discrimination complaints from 
Willie Crute and Sherman Witcher to the National Office Equal 
Opportunity Division requesting guides for preliminary inquiry, as it 
had been over a month since they were first submitted.

          (Note: Recently in November 1996, when we requested the files 
        on this case from Farm Service Agency, we were told they had 
        nothing on Sherman Witcher; however, we found the above 
        information attached to other documents in the files of Willie 
        L. Crute, also a complainant. We have no idea of whether a 
        preliminary inquiry or decision was made in this case, or what 
        the outcome has been since.)
Chronological History
William S. Warren
    January 10, 1992--Mr. William S. Warren filed a discrimination 
complaint based on race against Ron Norton, County Supervisor, 
Southampton FmHA County Office.
    February 24, 1992--Lloyd A. Jones. State Director, sent a copy of 
the discrimination complaint to the Equal Opportunity Staff.
    March 30, 1992--Equal Opportunity Staff sent Lloyd A. Jones a guide 
on conducting preliminary inquiry into this complaint.
    September 3, 1992--Ava Marshall began working on the preliminary 
inquiries as requested by the National Office. Shortly after beginning 
work on this preliminary inquiry, Ava Marshall became ill and was out 
from work most of early 1993 after being diagnosed with multiple 
sclerosis.
    July 21, 1993--Mr. Jones. realizing Ms. Marshall was not going to 
return anytime soon, requested assistance from the West Virginia State 
Civil Rights Coordinator to conduct these preliminary inquiries.
    August 23, 1993--Leland Kesner, State Civil Rights Coordinator from 
West Virginia, met with Mr. Warren at his home.
    November 19, 1993--Mr. Kesner submitted the results to the Equal 
Opportunity Staff.
    May 13, 1994--A letter was sent from Michael Dunn, Administrator to 
Robert Franko recommending that the case be closed from a civil rights 
standpoint without further reporting.
    March 2, 1995--Congressman Norman Sisisky received a response to 
Mr. Warren's inquiry concerning a decision on his discrimination 
complaint indicating that Mr. Warren's complaint was being reviewed by 
Office of Civil Rights Evaluation (OCRE) and a decision would be made 
as quickly as possible. Once a decision was made, Mr. Warren would be 
notified directly.
    March 2, 1995--Lou Anne Kling, Acting Deputy Administrator, Farm 
Credit Programs, again, verified Mr. Warren's claim was still being 
reviewed by OCRE. She indicated a decision will be made in the near 
future.

          (Note: It appears, from the records that we received from 
        Farm Service Agency, there has been no further action on 
        discrimination to date.)
Chronological History
Carol Clay
A White Female Borrower
    September 8, 1994--A memorandum from Carlton Lewis, Branch Chief, 
Program Compliance Staff, Civil Rights Division, to Lloyd A. Jones, 
State Director, requesting the State Civil Rights Manager attempt to 
conciliate Ms. Clay's complaint or conduct a preliminary inquiry into 
the subject's complaint, and provide the National Office, Equal 
Opportunity Staff with a copy of the proposed conciliation or the 
preliminary report.
    May 30, 1995--A memorandum from Cheryl Prejean Greaux to Willie 
Cook, an employee on the CFSA Staff, with the original RECD casefile 
enclosed. On June 2, 1994, the RECD Equal Opportunity Division 
requested the State Director to have his Acting State Civil Rights 
Coordinator attempt conciliation, and if conciliation was not 
necessary, conduct a preliminary inquiry. A copy of this memorandum re-
notified the Virginia State Director the file was transferred to CFSA. 
She pointed out that no further action had been taken by the Equal 
Opportunity staff at this time.
    August 2, 1995--Lloyd A. Jones, State Director, sent a report to 
the National Equal Opportunity Staff on the preliminary inquiry 
alleging discrimination by Carol Clay, submitted by Leland Kesner, 
State Civil Rights Coordinator, West Virginia.

          (Note: No further information is available on the outcome of 
        this complaint since the file was transferred to FSA. There is 
        no information in the files giving us the outcome of this 
        complaint after being sent to the National Office.)
Chronological History
Linwood Brown
    July 21, 1994--Mr. Linwood Brown filed a discrimination complaint 
against Rose Finch, Acting FmHA County Supervisor in Lawrenceville 
County Office.
    July 26, 1994--A copy of Mr. Brown's complaint was sent to the 
Equal Opportunity Division in Washington, D.C. It was pointed out, at 
that time, that this was the second complaint Mr. Brown had filed 
against this office and no actions by the Brunswick County Office have 
been taken in previous complaints.

          (Note: No further in formation is available on this case 
        since it was submitted to the National Office Equal Opportunity 
        Staff on July 26, 1994.)
Chronological History
John and Betty Townsend
White Farm Borrowers
    This case was closed by the Department on March 13, 1995, in a 
letter signed by Jetie B. Wilds, Jr., Deputy Director of Evaluation and 
Adjudication on the basis that no discrimination occurred based on 
race.
Chronological History
Minority Farmers of Brunswick Country (Lawrenceville, Virginia)
    Once I received a copy of the report from the Delaware State Civil 
Rights Coordinator, I realized this problem was much more serious than 
I anticipated. I discussed my concerns on numerous occasions after a 
complete review of complaints my office had received from Brunswick, 
Mecklenburg, Lunenburg, Sussex, and Nottoway Counties in Virginia. I 
discussed the concerns that I had regarding these issues with the 
appropriate National Office officials. I finally submitted a request in 
writing on August 2, 1994, for a full and complete investigation 
coordinated by the National Office, FmHA, on program delivery, in this 
entire area where most of the complaints had originated.
    It was my opinion, as State Director, that a more experienced team 
in the area of civil rights should have been allowed to look into the 
complaints made by Brunswick County farmers alleging discrimination.
    The seventeen (17) farmers who were affected by this are:

 
 
 
John Wyatt               Julia Seward             Robert Seward
Beatrice Rice            Walter Rice, Jr.         Charles Bland
James Maclin             Mary Maclin              Laura Rice
Irene Hayes              Eric Rice                Larry Tucker
James Walker             William Royster          Leon Wall, Sr.
Linwood Brown            Alvin Rice
 

    October 26, 1993--Carrie Schmidt, Acting State Civil Rights 
Coordinator, prepared a memorandum for the State Director's signature 
indicating the cases evidenced by the December 31, 1992, memorandum had 
been resolved. Mrs. Schmidt was very new to the civil rights program 
and perhaps did not understand the complexity of these cases. 
Specifically, they involved both violations by the County Supervisor in 
program areas and civil rights areas. This memorandum was incorrectly 
prepared because the action taken on these cases was program related 
only. The files on the discrimination complaints should remain open and 
the National investigation conducted as recommended.
    August 2, 1994--A memorandum was developed and signed by Lloyd A. 
Jones, State Director for FmHA, Virginia, requesting a full and 
complete investigation of the discrimination complaints filed by the 
minority farmers in Brunswick County.
    August 29, 1994--A letter was written by Walter Dent, Acting 
Director Equal Opportunity Staff, to Robert Franko requesting 
assistance on the matter of discrimination on minority farmers and 
employees in the Brunswick County area.
    September 13, 1994--Robert Franko, Associate Director of Compliance 
and Enforcement, responded to Walter Dent on his request to conduct an 
onsite investigation on the minority farmers in Lawrenceville, 
Virginia, by stating a request had been sent to the Evaluation and 
Investigation Division (EID) for review and appropriate action. He 
advised Mr. Dent this staff would evaluate all information pertaining 
to the subject complaint, and advised the Enforcement Division as to 
whether [an] investigation would be scheduled.
    July 20, 1996--Thomas Beaumont, Chief, Program Complaints 
Adjudication, wrote to Willie D. Cook, Director, Equal Opportunity, 
FSA, requesting additional information regarding minority farmers and 
employees in the Lawrenceville, Virginia, FmHA office. Mr. Beaumont 
advised Mr. Cook FmHA had notified his office that it had conducted an 
investigation at the request of several minority farmers and employees 
in the Lawrenceville office, found several civil rights violations, and 
recommended his office conduct an on site investigation. As of July 20, 
1996, no on[s]ite investigation was conducted. He also pointed out that 
the memorandum prepared by Mrs. Schmidt was insufficient to close the 
cases from a civil rights point. He requested that Mr. Cook advise all 
the farmers who made written complaints to advise whether they were 
satisfied with the actions taken. Mr. Beaumont indicated, upon receipt 
on this information, his office will process these cases.
    August 13, 1996--Willie Cook, Director, Equal Opportunity, Farm 
Service Agency, wrote to Donald Davis, State Executive Director, 
Virginia State FSA Office, asking his staff to contact the following 
farmers on their original discrimination complaints:

 
 
 
Linwood Brown            Tommie Lowe              John Wyatt
Richard Bains            James Walker
David and Dorothy Craig  Robert Steward
 

Chronological History
Other Farmers Who Filed Discrimination Complaints With FmHA Whose Civil 
        Rights Files Could Not Be Found By FSA Since the Reorganization
    Lloyd A. Jones, State Director, Rural Development, Virginia, was 
unable to obtain civil rights files from Farm Service Agency on the 
following borrowers to prepare the chronological history requested. 
(See attached list which was the response from FSA).

 
 
 
Alexander and Helen T.   Jerome Brown             John Wyatt
 Warren
Mary Hayes (Daughter of  James and Sally Walker   John Lipscomb
 James Hayes)            Larry Tucker             Thurman Douglas
                                                   Witcher
Calvin Brown             Richard Pearson          John and Betty
                                                   Townsend
William Royster
 

Executive Summary and Opinion
    I take this opportunity to express my concern regarding the plight 
of the small and family farm agriculture producers in America and, more 
specifically, in the Commonwealth of Virginia. As previously stated, I 
have had the opportunity to serve as State Director of the Farmers Home 
Administration and Rural Development for approximately 7 years. During 
that time, I received numerous complaints as noted above that involved 
alleged civil rights violations by employees within USDA and, more 
specifically, the Farmers Home Administration. After thoroughly 
investigating the cases and obtaining information surrounding the 
allegations, I was convinced that the complaints of civil rights 
violations did, in fact, have merit and warranted a more intense 
investigation by the Office of Civil Rights Enforcement or the 
appropriate investigative agency.
    In my effort to find the truth to the issues brought to my 
attention, I met with several farmers, Black and white, during the 
tenure period of March 10, 1990, through September 30, 1995. The result 
of my discussions with these farmers consistently and persistently 
reaffirmed that there was, in fact, extremely poor customer service 
being rendered in the counties of Mecklenburg, Brunswick, Lunenburg, 
Nottoway, and Southampton. The names of James Garnett (Mecklenburg), 
Charles Featherstun (Brunswick), Waverly Brown (Lunenburg and Nottoway) 
and Ron Norton (Southampton), Berry Wright (District Director, 
Franklin, VA) and Otis Dailey (District Director, Farmville, Virginia) 
all former employees of the Farmers Home Administration were intimately 
connected and in fact were viewed by most, if not all, of the 
complainants as the problem. Often, I would hear comments to the effect 
that these USDA employees did have any concern or compassion for their 
plight or sensitivity to their needs. These comments were made by the 
complainants noted above as well as others that attempted or were 
participating in the USDA programs. The line authority for supervision 
of these was as follows:

 
 
 
Lloyd A. Jones, State Director       Ron Norton, County Supervisor
Berry Wright, District Director      Charles Featherstun, County
                                      Supervisor
 

          Note: Mr. Wright had first line supervisory responsibility 
        over Mr. Norton and Mr. Featherstun.

 
 
 
Lloyd A. Jones, State Director       James Garnett, County Supervisor
Otis Dailey, District Director       Waverly Brown, County Supervisor
 

          Note: Mr. Otis Dailey had first line supervisory 
        responsibility over Mr. Garnett and Mr. Brown.

                  Please note that Mr. Ron Norton is the only local 
                and/or district employee that is still employed with 
                USDA. Mr. Norton presently works for the Farm Service 
                Agency.

    It is my opinion that the poor customer service that I made 
reference to above given by these employees was the disguise used to 
enforce the entrenched subtle discrimination practices carried out by 
them and possibly some of their subordinate employees in administering 
USDA programs. I am convinced that discriminatory practices become such 
a way of life with some people that it is difficult, if not impossible, 
for them to separate right from wrong and cultural acceptance from 
blatant double and triple standards for people that are different 
because of some physical feature that has nothing to do with the 
character of the person or their ability to manage a farming operation. 
When I met with these farmers it was evident that they were sincere, 
determined, offended, disappointed, honest and, yet, hopeful for 
relief.
    Because of the cumbersome process that currently exists in the 
administrative process of civil rights complaints[,] it became 
increasingly clear to me that it was up to me to take administrative 
action in resolving the personnel issues in question with regard to 
performance of their duties and thereby finding a way to utilize the 
skills of these employees in other areas that would maximize there 
potential with regard to good customer service. Therefore, some 
employees were given the option of accepting reassignment offers or 
being released from duty.
    It is also clear to me that the need for a strong civil rights 
enforcement process is imperative to taking corrective action in 
eradicating discriminatory practices in Virginia and throughout this 
country. Although I believe [the] vast majority of the USDA workforce 
is in fact dedicated to top quality customer service to all, it is also 
my belief and confirmation that there are employees that do not have 
the understanding and sensitivity that it takes to be a public servant. 
I also believe that there are employees who knowingly discriminate 
against people who are different from them regardless of the basis of 
that difference whether it is based on physical characteristics or 
economic conditions. In my effort to carry out an effective outreach 
program by working with and through the 1890 Land-Grant Institution in 
Virginia, which is Virginia State University, it was still difficult to 
gain the full commitment needed from some of the local USDA personnel 
in providing the technical assistance in developing and carrying out a 
financial and/or business plan that supported the most effective and 
efficient use of a customer's resources, particularly for the small 
producers. Virginia State University and Farmers Home Administration 
worked hand in hand by seeking and obtaining grants to provide the 
financial resources for staff personnel that would forge strong 
partnerships between USDA, VSU and the end-user of the services that we 
provide. Some USDA employees did display the supportive and positive 
attitude that was necessary to assist our customers in the most 
effective and efficient way possible. In carrying out this initiative 
of reaching the small producer with special focus in southside 
Virginia, there were approximately 90 farmers that technical assistance 
specialists from VSU provided support to small producers with special 
emphasis on reaching minority farmers. I also employed a visiting 
professor to work for FmHA in assisting farmers with technical support. 
Mr. Hermon Macklin was the visiting professor for VSU and FmHA. I have 
attached Mr. Macklin's reports for your review also. His report reveals 
that there was concern about the small and minority farmer.
    I am persuaded by my [own] personal experiences with USDA, as an 
employee and a manager, that discrimination does, in fact, exist within 
the ranks of this huge department; and having been on the receiving end 
of off-color remarks, ethnic jokes, and insensitive behavior towards 
minorities and women, it is clear to me that the ``good ol boy'' system 
is still a force to be reckoned with even though we are on the verge of 
entering the 21st century with new and exciting opportunities that lie 
ahead for all of us. Discrimination has no place for any of us now or 
in the future; it needs to be eradicated now.
    I strongly recommend that these cases of discrimination be settled 
as soon as possible and that any idea of reopening the Willie Crute and 
John Boyd cases for reinvestigation be quashed. Any effort along those 
lines would be a clear indication of double jeopardy for the victims of 
discrimination.
    My assessment of these issues areas follows:

  A.  Discrimination has been proven and a reasonable settlement should 
            proceed with all haste.

  B.  Civil rights is a people issue and it must be raised to a status 
            of number one priority. It cannot continue to be an 
            afterthought for most and no thought at all for far too 
            many.

  C.  Diversity in management is critically important in [bringing] 
            about change in the behavior and attitude of employees at 
            all levels of the USDA rank file workforce.

  D.  Minority farmers need an avenue of support through USDA in spite 
            of traditional policies that were unfriendly to small 
            producers.

  E.  The small producer issue and minority farmers must be addressed 
            in the farm bill now and in the future. This is such a 
            critical issue because it does in fact lay the footing and 
            the foundation for agriculture and the small producer for 
            the future.

  F.  The 1890 Land-Grant Institutions must become intimate partners 
            with USDA in our effort to improve our relationship with 
            minority farmers and to encourage women and minorities to 
            be willing to pursue production agriculture as a profession 
            and business that can be viable and support a lifestyle 
            consistent with that of other professions.

  G.  Recognize that this a major cultural change for many USDA 
            employees and attitudes may only be changed when managers 
            have the authority and flexibility to immediately take 
            appropriate corrective action with insubordinate and 
            insensitive behavior.

  H.  Immediately reevaluate current policy on the collection of farm 
            accounts to incorporate more flexibility for all rank and 
            file to assess the needs of each borrower on its on merit 
            and not allow the customer to be a victim of a ``cookie 
            cutter'' approach.

  I.  Immediately consider developing training for all USDA and non 
            USDA staff that will include cultural diversity, 
            sensitivity, civil rights and Equal Employment Opportunity, 
            etc.

    In closing, I hope this report has been of some help to you in 
gaining at least my perspective of the problems that we had in Virginia 
and how we resolved some of those problems. I would be more than happy 
to meet with you to discuss any part of this report at your 
convenience.

Lloyd A. Jones,
State Director.
                             [attachments]
Quarterly Report
January, February, March 1994
H.L. Maclin,
Agricultural Management Specialist.

    Fifty two (52) one-on-one contacts were made during the last 
quarter. Sixty four (64) telephone calls (out going and incoming) were 
made or received during the same period. These contacts were in 
conjunction with agricultural management and clarification of subject 
materials or documents received by borrowers from Farmers Home 
Administration (FmHA). In many cases the print on the documents was so 
faded out or dull that it was very hard to read much less to 
understand. This situation should be corrected in the County 
Supervisor's Office.
    The request by two delinquent borrowers have been granted. One was 
for a loan write-down and buy-out under FmHA instruction 1951-S. The 
other was for homestead protection and conveyance of farm property to 
U.S. Government.
    I have counseled with one determined applicant to no avail. He 
wants to over-shadow existing financial responsibilities. Mr. Lipscomb 
contacted me at home by telephone. The call lasted over 2 hours! He 
feels that he is not being treated fairly by all levels of Farmers Home 
Administration. This applicant, according to reports from FmHA, has not 
complied with requests for information, and he is determined to go 
beyond County, District, and State Administrators in his quest for a 
loan.
    By request, I spent 1 day with a new SDA borrower (J. Smith) in 
Prince Edward County to discuss some enterprise options for a newly 
purchased farm financed by Farmers Home Administration. Mr. & Mrs. 
Smith are employed full-time, and operate other business enterprises on 
the side for additional income. They are young and the parents of one 4 
year old. They have established goals and appear to be hard workers and 
should be successful in their endeavors. Follow-up counseling is 
important to assure that this family understand the justification of 
purchasing additional tractor and other machinery. Purchasing another 
tractor was one of Mr. Smith's high priorities. At this stage, other 
options should be considered before venturing into more indebtedness.
    In analyzing the farm situation, pastures need to be improved and 
fenced. Once this is done the beef cattle herd should be upgraded and 
numbers adjusted according to the number of acres of pasture land 
available for grazing. A lot of pine trees were damaged and fallen by 
the ice storm last winter. They should be cut and marketed as soon as 
possible. Mr. Smith plans are to harvest the damaged timber himself and 
market. Maybe this should be his first option.
    Theodore Francis, a man involved in a trucking business in North 
Carolina, is very anxious to establish a beef cattle herd on his one 
hundred and sixty (160) acre farm in Mecklenburg County. He needs 
financial assistance to get started with this enterprise. He telephoned 
my home to receive information about the FmHA SDA program. A visit was 
made to Mr. Francis' farm on Thursday, March 10. The farm has good 
potentials for beef cattle or meat goat production. Approximately one 
hundred (100) plus acres could be developed for pasture. There is a 
watering and fish pond on the farm which would serve as a source of 
water for livestock.
    I have referred Mr. Francis to our County FmHA Supervisor in Chase 
City, Virginia for possible financial assistance. On March 16[,] I 
contacted the County FMHA Supervisor in Chase City to provide an 
overview of my visit with Mr. Francis. It was indicated that Mr. 
Francis had contacted the FmHA Office and a conference date scheduled 
for Tuesday, March 22 was verified.
    Participated in Farm Management Staff meetings and several county 
management workshops. Assisted Farm Management Specialists with FmHA 
borrowers and non-borrowers with enterprise record keeping. On March 
17, visited five farm families in Southampton County to discuss record 
keeping and farm management programs. I have received some feedback 
from FmHA County Supervisors commending the work of Farm Management 
Specialists on how helpful they have been in developing farm and home 
plans for borrowers. Relationship between borrowers and county 
supervisors have improved in some counties. There is a better 
understanding among borrowers about the overall borrowing and payback 
process, what their options are in certain financial circumstances, how 
to concur with FmHA requests in many situations, and the need and 
advantage of keeping farm records for each enterprise.
    I have established a linkage between the FmHA Management Specialist 
at Virginia State University and borrowers I have assisted, so as not 
to disrupt management assistance in the future.
    I have pledged my support to the FmHA Farm Management Project at 
Virginia State University, and will continue to support the program and 
assist the Management Specialist with the program.
    January 26-28[,] I participated in the State Farmer Programs 
Training Seminar at the Omni Hotel, Newport News, Virginia. The 
presentations were reviews and updates of farmer programs. Emphasis on 
Supervisor-Borrower relationship was a fundamental part of the 
discussions. It was made clear and understood that FmHA County 
Supervisors must have full knowledge of all details involved in FmHA 
Farmer Programs before taking any action involving borrowers and loan 
applicants. For me, the sessions were another plus to enhance the image 
of FmHA Programs.
    During the short period of employment by FmHA I wish to say it has 
been another learning experience for me. The job was a challenging 
endeavor working with rural agricultural families who needed assistance 
and appeared to have had an appreciation for the help rendered through 
the SDA FmHA Program.
    Many thanks to the FmHA State Director for providing this 
opportunity for me to serve people in the Commonwealth of Virginia. I 
stand by with an open mind to support and assist Farmers Home 
Administration whenever called upon in the future.
    I wish to extend my appreciation to state and county staff members 
who have made my job very satisfying, informative and productive. May 
the program efforts continue to enhance the ``Well-Being'' of needy 
families.
    Thanks to the Director of Virginia Cooperative Extension and staff 
for a pleasant, personal environment and working relationship during my 
stay at the University. I will invariably remember the many kind and 
helpful program suggestions generated by Virginia Cooperative 
Extension.


Bi-Monthly Report
November and December, 1993
H.L. Maclin,
Visiting Professor.

    Visitation to FmHA County Offices in Farmville, Chase City, 
Courtland, and Brunswick to secure SDA updates and general information 
related to SDA borrowers. It is encouraging to find improvement in loan 
payments and Farm and Home Plans for 1994. FmHA County Supervisors 
indicated that the Farm Management Program coming from VSU is having a 
tremendous impact on borrowers farming systems. Many borrowers are 
beginning to realize the importance of enterprise record keeping. With 
the awareness of nonprofit enterprises, borrowers and small farmers 
should be able to increase farm profits.
    Five socially disadvantaged farmers contacted me concerning the SDA 
program. Some are interested in loans to purchase farms, and others are 
looking for funds to establish livestock and poultry enterprises. I 
visited several of these farmers and frequent contacts were made by 
phone to answer questions or provide information relating to the FmHA 
program.
    Participated in two farm management meetings at VSU on November 30 
and December 15. Places visited in conducting the SDA program were 
Farmville, Courtland, Cumberland, Chase City, Valentines, Warfield, 
Dolphin, Baskerville, and Crewe.
    Other activities involved maintaining good public relationships 
with Virginia Cooperative Extension and Virginia State University 
through participation and involvement in Thanksgiving and Christmas 
events on the University campus.
    Considerable time was spent with the Farm Management Specialist in 
planning FmHA borrowers workshops to be conducted in January and 
February of 1994. I took some time out to enjoy the ``Holiday Seasons'' 
(Thanksgiving and Christmas).
    During the next reporting period I am planning to work closely with 
farm planning and financial management workshops; also SDA borrowers 
Farm and Home Plans.
    Will attend and participate in the Farmer Program Training January 
26-28, 1994.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

Bi-Monthly Report
September & October, 1993
H.L. Maclin,
Visiting Professor

    Fourteen visits were made during this reporting period to SDA 
borrowers in Greensville, Lunenburg, Mecklenburg, Southampton, and 
Brunswick Counties. These visits involved updating correspondence from 
FmHA, existing status, future plans, and assistance needed. My findings 
were that many borrowers were faced with low crop yields and poor 
quality products due to the drought. This situation will lower profits 
and farm income resulting in less money to pay financial 
responsibilities. Some are looking at alternative enterprises; and 
others off-farm employment to supplement farm income. A few are trying 
to obtain family support so as to put forth efforts to raise money and 
pay off indebtedness. None want to [lose] their farms.
    To soften the needs of the SDA borrowers, there are only a few 
options based on the current FmHA guidelines. One possibility would be 
to set up a farming system, including only enterprises that have been 
proven profitable based on the geographic characteristics of the area. 
Restructure the loan so that payments will be compatible to the 
established farming system. ``Lease-back payback'' is a good option, 
but it only applies to those borrowers showing a cash flow. What about 
SDA borrowers not showing a ``cash flow'' operation? Can a farming 
system be developed based on available resources that will provide 
enough farm profit to show cash flow adequate for family living and 
positive potential of paying off the loan? These are options that can 
be initiated and closely monitored by FmHA.
    Representatives from the USDA FmHA-EDS Office in Alexander, 
Virginia, I-MO-FU, a co-worker and I visited and interviewed four SDA 
farmers in Greensville and Brunswick Counties. The interviews were 
centered around FmHA Programs each participated in and how effective 
the program was in solving their problems. What were some of their 
immediate needs and some of the things they thought might help them. 
The ``feed back'' as a result of the visits impressed the USDA visitors 
very much according to comments at the end of the day. We also visited 
the Brunswick County FmHA Supervisor's office.
    Participated in two farm management meetings involving FmHA and CES 
Farm Management Specialist at VSU. Assisted two Management Specialists 
in Southampton and Mecklenburg Counties with programs dealing with on-
farm family financial management.
    Attended and participated in a Research Field Day on October 26 at 
VSU's John Randolph Farm, Petersburg, Virginia. Participated in USDA 
satellite program September 8 at VSU. Met with the Southside Business/
Education Commission in South Boston on September 14, and in Farmville 
September 15. Also on September 15 visited the FmHA office in 
Farmville, the Cumberland CES office and FmHA State Office. On 
September 24 visited FmHA office in Chase City, and two borrowers in 
Mecklenburg County.
    On October 19 attended an Open House at the new location of FmHA 
and ASCS State Offices in the Culpeper Building, 1606 Santa Rose Road, 
Richmond, Virginia.
    On November 5 attended a ``Gala Affair'' Agriculture Alumni Banquet 
at Virginia State University.
    Plans are being formulated for Borrowers Workshops to be conducted 
during the months of December '93, January and February '94. Much time 
will be devoted working with Management Specialists in planning and 
executing these programs. Some time will be spent working one-on-one 
with borrowers requesting assistance.


[August 5, 1992]
July Monthly Report (1992)
H.L. Maclin,
Visiting Professor.

    On July 8, 1992, I visited the last two 1951-S Socially 
Disadvantaged Borrowers assigned by the State Director (Administrative 
Notice (AN), Virginia AN No. 540 (1943A) dated December 20, 1991). The 
purpose of this AN is to provide guidance for the Visiting Professor in 
an effort to improve the assistance provided to the Socially 
Disadvantaged Applicants (SDA), particularly those borrowers who are 
unable to acquire the educational assistance from other sources to 
interpret correspondence received from FmHA.
    The Visiting Professor conducted a total of fifteen conferences 
with eight SDAs assigned. These SDAs were selected by County FmHA 
Supervisors in four counties. The Visiting Professor provided timely 
assistance to these borrowers and made sure they understood all 
proceedings coming from the FmHA, and their (borrowers) 
responsibilities during 1951-S processing. The borrowers were informed 
of their rights under FmHA regulations. It is the intent that no 
borrower will lose the family farm merely because of lack of 
information.
    In all cases, borrowers have been very receptive and eager to learn 
more about FmHA and their individual situation. Most borrowers realize 
their management short-comings, but their financial predicament do not 
look encouraging for a future turn-a-round.
    On July 8, 1992[,] I visited Sylvester Warren and discussed with 
him, his daughter, and son some of his related activities and 
proceedings with FmHA. The following information were revealed.
    Sylvester Warren age 67, Courtland, Virginia owns approximately 250 
acres of farm and timber land. He grows one hundred acres of peanuts. 
Of this number, he rents fifty. He also produces two hundred acres of 
soybeans[,] fifty acres are grown on his farm and one hundred and fifty 
acres are rented. He received [S]ocial [S]ecurity benefits, the sum of 
$352.00 monthly. His liabilities from other creditors are Sovern 
Peanuts Company $40,000; S.P.A. $40,000; and Southern States 
Corporation $2,500. Indebtedness to Farmers Home Administration was not 
revealed. He has requested a $14,000 production loan through Farmers 
Home Administration for the year 1992. He has not paid FmHA anything in 
several years. He is current in payments with other loaning agencies.
    In 1991 twenty six thousand dollar worth of hardwood and pine 
timber was sold from approximately 100 acres of timberland. Mr. Warren 
indicated that he and his family cut the trees and paid a trucker to 
haul logs to the market place. He also stated that the County 
Supervisor for Farmers Home Administration was aware of the transaction 
prior to selling the timber. He had held conferences with the County 
Supervisor and told him he wanted to sell the timber to pay some debts. 
If this is true, which I have no reason to doubt, the timber was sold 
in good faith.
    Mr. Warren filed for a crop disaster loan in 1991 with ASCS. 
According to statements from Mr. Warren and Vivian (his daughter) with 
the right of ``Power Attorney'', the application was misplaced or left 
in the office of the ASCS. Since he has refiled for disaster loan with 
no avail.
    Sylvester Warren is the father of 13 children. Three daughters live 
in his household. One works full time off the farm, one is in tracking 
partnership business with her brothers, and one helped on the farm. Mr. 
Warren's wife expired 2 years ago. His education is limited to the 
first grade. He says he knows how to farm because he grew seed peanuts 
10 years for a seed company in North Carolina. Mr. Warren has hired an 
attorney to handle his business affairs. Telephone [Redated].
    On July 8, 1992[,] I held a conference with the wife of Clifton 
Slade, Surry, Virginia. She indicated that her husband Clifton had 
suffered a stroke and was not able to carry on his farming and other 
business activities. His nephew, Glen Slade, conducts the farming 
operation on his four hundred acre farm.
    Since visiting the Slade Farm, I contacted Mr. Slade by telephone 
for additional information. He indicated that his son, Clifton, was 
assisting him with his business activities.
    I received a telephone call from Mr. Lundy, Chief, Farmer Programs, 
to contact Mr. George E. Morris, Borrower, FmHA, Hwy Rt. 3, Lancaster, 
Virginia, who had received 1951-S serving actions to give assistance in 
filing FmHA package with County Supervisor. George E. Morris was 
contacted by telephone to obtain a statement on his situation. He 
indicated that he had been misinformed and needed help in dealing with 
the problem.
    On July 16, 1992, I visited Mr. Morris and held a conference with 
him and his wife. They are retired farmers with an indebtedness of 
twenty-six hundred dollars ($2,600) owed to FmHA and a four thousand 
dollar ($4,000) debt with Northern Neck State Bank, Warsaw, Virginia. 
They rent their farm land for twenty nine hundred dollars ($2,900) 
annually. Mr. Morris indicated that his son, who lives in the District 
of Columbia, helps in financial management of the farm. He had received 
a 1951 Service Action Processing package from the County Supervisors 
(office at Tappahannock) on June 6, 1992. He asked for assistance in 
filing package. (His package was completed to be returned to the 
County's FmHA Office.)
    Mr. Morris appeared to have been very disoriented over the 1951-
Serving Action process. I indicated to him that he had two options. 
One, file the application requesting rescheduling of payments; and, 
two, borrow money and pay off the indebtedness.
    Having established credit at the local bank. it appeared to be 
advantageous for him to borrow the small amount of money ($2,600) owed 
FmHA and pay off the loan.
    As a follow-up to my visit, Mr. Morris was contacted by telephone 
to check on his decision. He thanked me for the visit and the 
assistance rendered in guiding him to make the decision to borrow the 
money and pay off the FmHA loan. He also stated that if I ran for 
President, I would get his vote.
    On July 24, 1992, I participated in the Soil Conservation Service 
(SCS) tour in Prince Edward County. I had the opportunity to observe a 
Dairy Lot Rotational Management System and a Poultry Dead Bird Litter 
System. I was particularly interested in the poultry demonstration 
because a FmHA borrower is applying for a loan to construct a Dead Bird 
Litter System on his poultry farm. ASCS will pay 75% of the cost when 
constructed in accordance to specifications.
    I visited and discussed the operation of a Poultry Broiler 
Enterprise System with borrower Steven Faircloth in Prince Edward 
County.
    I had a conference with the Chief Farmer Programs and the State 
Director on July 27, 1992. Purpose--administrative procedure.


[June 15, 1992]
  Virginia State University
  P.O. Box 9081
  Petersburg, Virginia 23803
  June 12, 1992

    Dear Friends:

    Farm ownership loans for socially disadvantaged persons will be 
discussed in the Town Hall Building, Bank Street, Waverly, Virginia on 
June 23, 1992, beginning at 7:30 p.m.
    The forum will be conducted by Farmers Home Administration's (FmHA) 
Management Specialist. Lloyd A. Jones, State Director, FmHA will be our 
guest speaker, assisted by Herman Lundy, Chief of Farmer Programs--both 
from the FmHA State Office, Richmond, Virginia.
    The discussion will be centered on the need, purpose, and benefits 
from the SDA program to land owners. There will be 1 hour of allotted 
time for group discussion on issues related to Farmer's Home 
Administration programs.
    We hope you will attend and participate in these activities. This 
is your opportunity to meet our State Director and let him know how you 
feel about the FmHA Program.
            Sincerely,
            
            
Hermon Maclin,
Management Specialist FmHA.
Farm Ownership Loans for Disadvantaged Persons
FmHA Forum
June 23, 1992

  Town Hall Building
  Bank Street
  Waverly, Virginia
Agenda

 
 
 
7:00 p.m.                Opening Remarks          H.L. Maclin
                         Introduction Speaker     Herman Lundy, Chief,
                                                   Farmer Programs
                         Forum Speaker            Lloyd Jones, State
                                                   Director, FmHA
8:00 p.m.                Group Discussion         Gladys B. Holland,
                                                   Coordinator for
                                                   Discussion
9:00 p.m.                Closing Comment          H.L. Maclin
 

                                                  
                                                  
June 12, 1992 *
---------------------------------------------------------------------------
    * Editor's note: this dated report was duplicated in the submitted 
documents, it is reproduced herein as received.
---------------------------------------------------------------------------
  Virginia State University
  P.O. Box 9081
  Petersburg, Virginia 23803

    Dear Friends:

    Farm ownership loans for socially disadvantaged persons will be 
discussed in the Town Hall Building, Bank Street, Waverly, Virginia on 
June 23, 1992, beginning at 7:30 p.m.
    The forum will be conducted by Farmers Home Administration's (FmHA) 
Management Specialist. Lloyd A. Jones, State Director, FmHA will be our 
guest speaker, assisted by Herman Lundy, Chief of Farmer Programs--both 
from the FmHA State Office, Richmond, Virginia.
    The discussion will be centered on the need, purpose, and benefits 
from the SDA program to land owners. There will be 1 hour of allotted 
time for group discussion on issues related to Farmer's Home 
Administration programs.
    We hope you will attend and participate in these activities. This 
is your opportunity to meet our State Director and let him know how you 
feel about the FmHA Program.
            Sincerely,
            
            
Hermon Maclin,
Management Specialist FmHA.

May Monthly Report (1992)
H.L. Maclin,
Visiting Professor.

    On May 7[,] a management conference was held with Linwood Brown at 
his home. We discussed his past farming program. We noted low tobacco 
yields and poor quality. His hog operation wasn't paying off, he had a 
low soybean yield, and he indicated a need for tobacco rotation system. 
For the last 40 years tobacco has been planted on the same fields year 
after year. He admitted to management problems.
    Linwood agreed to cooperate with CES and FmHA in developing a 
better crop rotation system and eliminating his hog project. Plans are 
being developed to rotate his tobacco crop. Tobacco will be the only 
crop he plans to grow in 1992. He planted pine seedlings during the 
planting season to supplement his income.
    On May 8[,] a visit was made to the farm of Richard Barnes, an SDA 
borrower. He grows approximately 4,000 lbs of flue-cured tobacco, 50 
acres of peanuts, and 120 acres of soybeans. His liabilities to FmHA is 
$140,000. His setback has been due to disaster crop failure over a 
period of years without insurance protection. Growing corn was his 
greatest crop failure. He has no plans for growing more corn.
    In talking with Mr. Barnes, he is behind in planting this year due 
to inadequate production money. FmHA has not processed his production 
loan (PL) he applied for in October 1991. Richard usually is the first 
to plant crops in his community. He is very disturbed over the time it 
is taking to process his PL. While visiting him the County Supervisor 
telephoned to let him know his application has been processed, and will 
be mailed to Richmond on Monday, May 11.
    Applying chemicals to the land and planting seeds in the soil on 
time, according to recommendations, are very necessary in maximizing 
crop yields. Based on the telephone calls I have received this year 
from borrowers, there is a need for investigation of loan processing 
systems.
    Had the opportunity to meet with USDA staff members and Chief of 
Farmer Programs on May 13. At this meeting a progress report was made 
to inform the staff about some of the program activities conducted
    Visited borrower Linwood Brown in Brunswick County to discuss his 
farm plan. It was noted that his tobacco crop was looking very good. He 
indicated that he needed some more funds to complete his tobacco 
fertilizer application program. He seems to have exhausted all sources 
for financial assistance to no avail.
    I received several telephone calls from borrowers seeking 
information on issues affecting their farming business. For some, 
referrals were made to the District and State Officers. Others were 
handled by visits or telephone.
    I have been in close contact with County, District and State 
Offices in planning a district meeting for small farmers to be held in 
Wakefield Town Hall on June 4 at 7:30 p.m.
    On [M]ay 26-28, I was in attendance at State Cooperative Extension 
Service Conference in Charlottesville, Virginia. Time permitted me to 
discuss rural educational and service programs with members of the CES 
staff.

June 12, 1992
  Virginia State University
  P.O. Box 9081
  Petersburg, Virginia 23803

    Dear Friends:

    Farm ownership loans for socially disadvantaged persons will be 
discussed in the Town Hall Building, Bank Street, Waverly, Virginia on 
June 23, 1992, beginning at 7:30 p.m.
    The forum will be conducted by Farmers Home Administration's (FmHA) 
Management Specialist. Lloyd A. Jones, State Director, FmHA will be our 
guest speaker, assisted by Herman Lundy, Chief of Farmer Programs--both 
from the FmHA State Office, Richmond, Virginia.
    The discussion will be centered on the need, purpose, and benefits 
from the SDA program to land owners. There will be 1 hour of allotted 
time for group discussion on issues related to Farmer's Home 
Administration programs.
    We hope you will attend and participate in these activities. This 
is your opportunity to meet our State Director and let him know how you 
feel about the FmHA Program.
            Sincerely,
            
            
Hermon Maclin,
Management Specialist FmHA.

[May 18, 1992]
May 14, 1992

  Mr. Lloyd Jones,
  State Director,
  Farmers Home Administration,
  Richmond, Virginia

    Dear Dr. Jones:

    In consideration of our telephone conversation on May 4, 1991, our 
FmHA staff has scheduled two (2) SDA community meetings. We are happy 
and very pleased to know that you will serve as our guest speaker.
    The first meeting will be held at Paul D, Camp Community College, 
Franklin, Virginia on Tuesday, June 2, 1992, at 7:30 p.m.
    The second meeting will be held in The Town Hall Building, Bank 
Street, Waverly, Virginia on Thursday, June 4, 1992, beginning at 7:30 
p.m.
    You are familiar with the profile used in previous meeting you 
participated in. The profile will be the same.
            Sincerely,
            
            
Hermon L. Maclin,
FmHA Visiting Professor.
1992
April Monthly Report
H.L. Maclin,
Visiting Professor.

    The month of April began with a trip to Sussex County to visit 
farmer Phillip Smith, borrower Fm.H.A. and a socially disadvantaged 
person. Phillip was delinquent in 1991 Fm.H.A. payments and was 
concerned very much about a production loan applied for in December, 
1991. He indicated the ``dire need'' for the loan to get started with 
his 1992 farm plan.
    Mr. Smith admitted to the management mistakes made in 1991 and what 
he plans to do about them in 1992. Too much outside labor was one thing 
that cut into profits. Fuel efficiency was another management problem. 
His peanut yields were above average. Soybean yields were very low, 
basically due to droughty conditions.
    Smith feels that he can profit in 1992 by his mistakes in 1991. He 
has adequate seed stock for 1992 planting, which will save thousands of 
dollars in production cost. He plans to cut labor costs and fuel fifty 
percent (50%).
    Mr. Smith discovered through the Cooperative Extension Services 
Agent that he was wasting money buying fertilizer and lime that the 
soil did not need to maximize production. In 1991, fertilizer dealers 
tested the soils on his farm and recommended fertilizer and lime 
application. For the year 1992, the Cooperative Extension Service Agent 
assisted in soil sampling and mailing to laboratory for analysis. Tests 
were returned indicating no fertilizer and lime application were needed 
for 1992 crop year.
    Smith qualified for disaster payments for his soybean crop. 
Payments were expected in April, 1992, and will help in overcoming his 
crop lost in 1991.
    Since my visit with Phillip Smith a production loan has been made 
through a local bank.
    On April 9, a conference was held with Donnie Whitfield in the 
Office of Cooperative Extension Service, Courtland, Virginia. His 
primary interest is in farming, although he works a full-time job. He 
grew some crops in 1990 on the family farm. He plans to farm part-time 
in 1992. He hopes to get a production loan and a (FOL) loan to buy a 
farm. Donnie expressed whole-heartedly the desire and love for farming. 
He impressed me as a good candidate for a (FOL) Farm Ownership Loan. 
Assistance was provided in making application for a production loan for 
1992. Other assistance is pending based on locating a desirable farm 
for sale.
    County Supervisor, Ronald Norton, was visited on the same day to 
discuss Donnie Whitfield's situation and the assigned borrower, 
Sylvester Warren.
    Ron was impressed and highly recommended Donnie as a good potential 
borrower.
    Sylvester Warren, 1951-S, borrower with liabilities outstanding of 
approximately $175,000.00. Fm.H.A. holding second Deed of Trust on 
property. Ron asked me to go out and talk with Sylvester to get a 
``feel'' of the situation. I will be scheduling a visit in May.
    On April 10, held conference with County Supervisor, Waverly Brown, 
to get a progress report on Sylvester Holmes, Tommie Graves and Mark 
Reese. Tommie Graves is in the process of completing application for a 
loan to buy a 47 acre farm. Holmes and Reese are trying to get 
commitments from owners of land they wish to purchase. I also had the 
opportunity to visit with Mrs. Mark Reese for an update on loan 
application. Assisted Mr. and Mrs. George Hendricks in filling out Farm 
and Home Plan for 1992.
    Attended the State Meeting for Farmers Home Administration, April 
13-16, 1992, at the Marriott Motel, Norfolk, Virginia. The program 
content was designed to update the staff on administrative changes and 
to create a better relationship among Fm.H.A. personnel. Also, to 
eliminate existing barriers between borrowers and staff members. In 
essence, to improve the overall structure and image of Fm.H.A. from top 
to bottom.
    Visited James Garnett, County Supervisor, Mecklenburg County on 
April 29, 1992. I had a very interesting discussion with Jim concerning 
SDA borrowers: David Oliver and John Boyd, both are part-time farmers 
working full-time in Northern, Virginia. These borrowers are delinquent 
in payments, but (classified as 1951-S) in the last year are making 
payments and showing considerable progress.
    David Oliver John Boyd is interested in full-time farming. He 
discussed his concerns with supervisor and Chief of Farmer Programs.
    David John would like to borrow more money to establish a poultry 
enterprise and build a dwelling for his family. Fm.H.A. is analyzing 
the potentials of the proposal. No decision at the present date.
    Alfred King rents a small amount of tobacco. He is a part-time 
farmer. He would like to sell his farm to his son, Dennis. If this 
business deal can be negotiated it would resolve Alfred's liability to 
Fm.H.A.
    James and Shirley Small rented and farmed forty (40) acres in 1990, 
hoping to purchase the farm in 1991. In 1991, Fm.H.A. made a loan to 
the Smalls of $85,000 to purchase the farm. It's a one hundred acre 
farm, 4,000 lbs. tobacco and a dwelling.
    The County Supervisor, Garnett, would like to visit and introduce 
me to these borrowers in May. This should establish a working 
relationship between SDA borrowers and the visiting professor.


[April 28, 1992]
First Quarter
Reporting Period
January 1-March 31, 1992
H.L. Maclin,
Visiting Professor.

    For the first quarter (1992) a great amount of time was spent 
visiting by telephone and person to person contacts with County 
Supervisors, Waverly Brown; Wayne Dail; Charles Featherston, and 
borrowers located in their jurisdictions. On several occasions 
conferences were held with the Chief of Farmer programs and the State 
Director Farmers Home Administration to discuss the issues involved in 
conducting the Socially Disadvantaged programs and a progress update on 
some of the day by day activities. Conferences were held with the staff 
members of Cooperative Extension Services to gather pertinent 
information on farm enterprise budgets and analysis of farm plans. 
Whenever necessary, the visiting professor has served in the capacity 
of removing or preventing obstacles that prevented full participation 
of those persons in Fm.H.A.'s farm ownership loan program. Have also 
provided technical assistance to qualified applicants in applying for 
loans and in developing sound farm and home plans essential for 
successful farm operation.
    L.T. Holmes; Silvester Holmes; Tommie Graves; Mark Reese; and 
Charles King; Ron Ellis, potential borrowers, were visited and 
contacted by telephone several times to discuss Operating Loans (OL) 
and Farm Ownership Loans (FOL) and assisted in developing farm and home 
plans.
    Ron Ellis, by request from County Supervisor Waverly Brown, 
assisted with developing a feasible Farm and Home Plan. Enterprise 
options were developed with the cooperation and assistance of Anthony 
Hankins, Cooperative Extension Services Specialist Alternative 
Enterprises. Ron had developed a loan budget in excess of $200,000. But 
in analysis income potentials results showed maximum loan budget of 
$52,000. No decision has been made to make application for loan through 
Fm.H.A.
    Tommie Graves has filed an application for a loan to purchase a 
farm. Option papers are being processed. Upon completion, he should 
qualify for a (FOL) Farm Ownership Loan.
    Mark Reese wishes to make application for a FOL. Application is 
being processed.
    Mr. Silvester Holmes, a previous borrower of Fm.H.A. is interested 
in purchasing adjoining farm consisting of approximately 172 acres. 
This farm was used primarily for live-stock production (beef cattle) by 
owner. A considerable amount of land is open, consisting of a very good 
stand of fescue and grass mixture. No * price has been established for 
the property estimated at $65,000-$75,000.
---------------------------------------------------------------------------
    * Editor's note: the submission included an out of sequence set of 
hand-numbered pages (34-36). They have been published in sequence 
herein.
---------------------------------------------------------------------------
    Silvester owns 100+ acres of land. The land is basically pasture 
land. He is a beef cattle producer which consist of 30 brood cows and a 
[simmental] bull. He has adequate farm equipment for operation and 
liability free. The family is in the process of building a new house on 
the farm site (pay as you go). At the present time his gross income 
from beef cattle ranges from $10,000 to $15,000 annually. His wife 
grows tobacco with a gross income of an average $10,000 annually.
    Holmes was involved in an auto accident a few years back resulting 
in leaving him physically handicapped. He hires a full-time employee. 
Holmes manages the farm and performs small farm chores. As soon as the 
selling price of the farm (172 acres) can be determined, plans are to 
make application for a loan through Fm.H.A.
    On January 27, 1992, Vernon Orrell, Farmer Program Specialist, 
provided some basic training in working with 1951-S. Servicing Actions 
borrowers. To inform some of the right of appeal and other essentials 
involved in the process.
    State Director, Lloyd A. Jones, requested the visiting professor to 
visit county supervisors and assist in communicating with borrowers 
receiving 1951-S. Servicing Actions.
    Visits and conferences were held with the following County 
Supervisors to get an update on borrower assigned. They were:

  a.  Charles Featherston

  b.  Waverly Brown

  c.  Ronald Norton; also Barry Wright

  d.  George Haskett

  e.  Wayne Dail, by phone

    Charles Featherston, County Supervisor, indicated assistance needed 
by the following borrowers:

    Richard Barnes (Greenville County)

    Grows tobacco and peanuts. Management problem expenses too high for 
some reasons. He has reduced the size on acreage but expenses remain 
the same. Some question??
    Visited Steven Faircloth on March 24, 1992[,] after receiving a 
telephone call asking for help in management. Also discussed with Wayne 
Dail, County Supervisor, Steven's situation before making the visit.
    Steven has taken Chapter 7. He stated that this was a must in order 
to clear some of his liabilities. Now he feels secure enough to take 
care of responsibilities for his poultry (Broiler) enterprise. He 
stated that he was current in his payments to Fm.H.A.
    He was desirous of installing nipple drinkers in the poultry house 
and building disposal facilities for his chickens. He is filing 
application for same with Fm.H.A.
    An invitation was extended [to] me to attend the Annual Association 
Meeting the evening of March 24, 1992 in Farmville. In discussions with 
the Chairman and other members it was indicated that nipple drinkers 
and disposal facilities will be required by all poultry producers in 
the near future.
    Discussed borrower, Steven Faircloth's poultry enterprise with 
Wayne Dail. Also, discussed the matter with District Supervisor, Otis 
Daily. The option of installing nipple drinkers and disposal facilities 
requested by Faircloth will be required by the Tyson Company in the 
near future is my understanding.
    Participated in a forestry field day and tour sponsored by 
Cooperative Extension Service, VSU, March 7, 1992. Served on the 
Governor's appointed ``Business/Education Partnership Commission'' for 
Southside Virginia, and participated in two membership meetings.
    Attended a swine Contract Operational Meeting in Brunswick County 
on March 13, 1992 sponsored by Cooperative Extension Services. The 
meeting involved Carrolls Foods of Virginia Contract Swine Production, 
an agreement between producer (farmer) and Carrolls Foods of Virginia 
to grow feeder pigs or/and finished hogs on a percentage contract 
basis. The company furnishing animal feed and transportation to 
producer and market. The farmer providing the facility, equipment, 
labor and management.
    Contacted the State Office (Herman Lundy) to inform management 
process used by the visiting professor in processing borrowers' 
proposals. Managing the potential borrower before loan application, 
defining resources, liabilities, income, enterprise, potential and 
capabilities of pay back.

    Linwood Brown

    Crop yield very low (tobacco). Quality of tobacco poor, preparing 
for market poor. Swine production average pigs per sow five per year. 
He purchases all of his feed. Selling hogs off butchering pole.
    Need to improve crop rotation. Tobacco behind tobacco for many 
years.

    Calvin Brown

    Trying to lease farm and buy back. Too much of a gentleman farmer. 
Cannot do much without people around.
    Frank Webb and Tommy Lowe in a lease back-pay-back situation. Need 
assistance in management.
    Visited with Mr. Waverly Brown, County Supervisor, to get an update 
on the status of George Hendricks, Kenbridge, Virginia. He indicated: 
Limited in educational (4th) abilities.
    Assistance Needed:

   Making farm and home plan

   Record keeping (problem area)

   Swine Operation (very poor)

   Flue-cured tobacco (average)

    Visited his farm and planned tentative dates for one-on-one 
conference. Also, visited with Mrs. Dorothy Graves in making 
application for loan to purchase 47 acre farm.
    Visited with borrowers, Calvin Brown; Linwood Brown; George 
Hendricks, Jr.[;] and Clifton Slade.
    Visited an assigned borrower to update his farm and house plan, and 
to pass on a few management practices.
    Discussed, by phone, a complaint made by a borrower in Greenville 
County (Charles King). The complaint involved an application for a 
Fm.H.A. Guaranteed Loan to install an automatic nesting system for 
layers (hens). According to King and his wife, the application was 
filed in November, 1991. I received the call in March, 1992.
    The visiting professor spent considerable time with Waverly Brown, 
County Supervisor, in conference with Tommie and Dorothy Graves, and 
Mark Reese and his wife. Both families are interested in purchasing 
additional land. We also visited Ron Ellis' farm to identify resources.

[March 12, 1992]

March 9, 1992

  Mr. Herman Lundy,
  Chief, Farmer Programs Division,
  Richmond, Virginia

    Dear Mr. Lundy,

    The enclosed Farm Plan supersedes plan submitted by Mr. Ron Ellis 
in January 1992. Specialist Anthony Hankins, (CES) Alternative 
Agriculture and I assisted Mr. Ellis in developing a revised plan that 
would be feasible and logical to his status.
    Mr. Ellis wasn't too pleased over the revised proposal. He plans to 
meet with Mr. Waverly Brown, County Supervisor FmHA, Kenbridge, 
Virginia to further discuss his intentions.
    We feel that fifty one thousands two hundred dollars would be 
maximum liability in the case of Mr. Ron Ellis, with this we recommend 
off farm employment.
            Sincerely,
            
            
Hermon L. Maclin,
Visiting Professor.

    [Enclosure] *
---------------------------------------------------------------------------
    * Editor's note: the submission included an out of sequence set of 
hand-numbered pages (51-53). They have been published in sequence 
herein.
---------------------------------------------------------------------------
A Farm Loan Application to Establish Commercial Production of Pastured 
        Poultry on my Farm in Lunenburg County
Submitted to Farmers Home Administration
  By: Ronald J. Ellis, 1928 Berkeley Avenue, Petersburg, VA 23805, 
    Phone--[Redacted]
Introduction
    New meat products being sold from several commercial farms in 
Virginia come from ``pastured poultry'' in the form of processed 
broiler and roaster chickens. ``Pastured poultry'' refers to chickens 
that are fed and grown outside within portable pens on clean grass 
pastures. Pastured poultry are often also called ``range poultry.'' 
These poultry products offer consumers an alternative to the broiler 
and roaster chickens grown within confinement buildings by farmers 
under contract with large vertically-integrated poultry companies. Many 
consumers are glad to have an alternative to the poultry products 
offered for sale at supermarkets because they have concerns about the 
safety of the big brand name poultry products. A great deal of media 
attention on the vertically-integrated poultry industry has made 
consumers worried about cleanliness, [S]almonella and adulterants. 
Consumers have learned that chickens raised within \3/4\\2\ of living 
space must be fed high levels of vitamins and antibiotics to grow. They 
do not like the images seen on television of the huge automated poultry 
processing plants operated by the big companies. Those processing 
plants do not appear to be clean and wholesome.
    The vertically-integrated poultry companies have recently caused 
financial hardship for a number of Virginia farmers. Farmers who borrow 
money to build confinement buildings under contract arrangement with 
the big companies must face the risk that their company will move 
operations away from them at some point in the future. This has 
occurred at several locations in Virginia in recent years. The farmer 
is left with big buildings, big debts and no markets for any broilers 
they may raise.
    Pastured poultry are sold at retail prices directly to consumers 
and at wholesale prices to restaurants and health food stores. On farm 
processing assures cleanliness and same day freshness of all poultry 
sold. Pastured birds offer a completely different meat to the consumer 
than the big broiler house birds.
    The flavor is different. Many restaurant chefs prefer to serve 
pastured poultry or ``range poultry'' to their customers because they 
believe that the flavor is superior to that of factory floor chickens. 
Prices paid for pastured poultry are normally twice as high as prices 
paid for regular broilers ($1.00 per lb. versus $.50 per lb.)
    Commercial production of pastured poultry has proven to be a 
profitable enterprise for family farm operations. The best person to 
contact to discuss the viability of this enterprise is Mr. Joel 
Salatin, owner of Polyface Farm Inc., near Staunton, Virginia. Mr. 
Salatin has been producing and marketing pastured poultry from his farm 
since 1965. He developed the flock feeding and management system that 
will be used on my farm in Lunenburg County. (see attached Pastured 
Poultry Manual).**
---------------------------------------------------------------------------
    ** Editor's note: the attachment referenced was not included as 
part of Mr. Boyd's submission.
---------------------------------------------------------------------------
    Mr. Salatin may be reached at [Redacted].
Objectives
    To establish commercial production of 20,000 broiler and roaster 
chickens annually on my 84.5 acre farm in Lunenburg County.
    To process and market 20,000 broiler and roaster chickens annually 
from my 84.5 acre farm in Lunenburg County.
Method
    In April, May and June of 1992, construct 100 floorless cages 10 
by 12 by 2 high.
    In July of 1992, construct a brooder house with heat lamps for 
raising baby chicks. Upon completion, purchase 11,000 chicks and begin 
raising them.
    On August 1, 1992, stock 10,000 pullets in the 100 portable pens 
and grow them out until mid-October. Market these chickens.
    In mid-April of 1993, stock 10,000 pullets in the 100 portable pens 
and grow them out until the end of June. Process and market these 
chickens.
    In early July of 1993, stock 10,000 pullets in the 100 portable 
pens and grow them out until October. Process and market these 
chickens.
    Continue to produce and market two crops of broiler and roaster 
chickens each year (20,000 birds).

 
 
------------------------------------------------------------------------
                               Budget 1992
------------------------------------------------------------------------
Portable pen materials...............................            $10,000
Purchased feeds......................................              4,000
Scalders and pickers.................................              2,000
Brooder house materials..............................                800
Baby chicks (11,000).................................              2,500
Hired labor..........................................              2,000
Utilities............................................              2,000
Transportation.......................................              1,500
                                                      ------------------
  Total costs........................................            $25,000
                                                      ------------------
    Gross income from sale of 10,000 roaster chickens            $20,000
                                                      ==================
      Net income for 1992............................          (^$5,600)
------------------------------------------------------------------------
                               Budget 1993
------------------------------------------------------------------------
Purchased feeds......................................             $9,600
Baby chicks (22,000).................................              5,000
Hired labor..........................................              4,000
Utilities............................................              4,000
Transportation.......................................              3,000
                                                      ------------------
  Total costs........................................            $25,600
                                                      ------------------
    Gross income from sale of 20,000 roaster chickens            $40,000
                                                      ==================
      Net income for 1993............................            $14,400
------------------------------------------------------------------------
Loan request from Farmer's Home Administration to                $51,200
 establish commercial production of pastured poultry
 on my farm in Lunenburg County in 1992 and 1993:....
------------------------------------------------------------------------

Semi-Annual Report
July-December 1991
H.L. Maclin,
Visiting Professor

    In the first semi-annual report it was clearly stated that the 
issues affecting socially disadvantage[d] people were: educational, 
financial and managerial which indicate the necessity of a training and 
management system in coherence with the financial assistance rendered 
to borrowers by Farmers Home Administration. With facts in the proper 
prospective our program initiative for the last 6 months were designed 
to provide some assistance to SDA and SDP that would enhance 
profitability and success. Also the wise choice of owning or purchasing 
land whenever feasible.
    In an effort to provide assistance to the socially disadvantage[d] 
people the visiting professor visited twenty-eight farm families, 
telephoned fifty-four people to plan, execute or evaluate the program 
and conducted/attended fourteen staff conference. Three multi-county 
(SDP) meetings were conducted involving state staff program support. 
Approximately sixty-eight people attended these meetings.
    For self improvement, attended three agricultural field days, 
participated in two training meetings and three State Staff Meetings. 
In developing better public relationship the agent serves on the 
Virginia Governor's (21 member) Business/Education Partnership 
Commission for Southside Virginia. Three meetings were held during this 
reporting period, in which the visiting professor attended and 
participated. The State Director and Chief of Farmers Program (FmHA) 
were personally involved and provided administrative leadership in 
administering the program.

    Socially Disadvantaged

    In analyzing the restraints of the Socially Disadvantaged as to the 
successful endeavors undertaken, there is a tremendous need for 
training and the basic knowledge for success.
    To alleviate and improve upon some of the present borrow[er] 
situation, one-on-one contacts by the visiting professor and community 
meetings were conducted to establish a relationship between SDA and the 
State Administration Lenders. So far three meetings were held involving 
Farmers Home Administration personnel. The first meeting was held in 
Farmville, Virginia approximately eighteen Socially Disadvantaged 
people were in attendance along with the County Supervisor, Wayne Dail. 
Representing the State Office were Ada Marshall and Herman Lundy, Chief 
of Farmer Programs. A brief overview of the purpose of the meeting was 
presented by Wayne Dail, County Supervisor FHA. The stated essence was 
to inform and update people on issues affecting the Socially 
Disadvantage[d] and Farmers Home Administration. The role of the 
visiting professor was described as an active link between the S.D.P. 
and the Chief of Farmer Programs and State Director, as to the issues 
affecting the Socially Disadvantaged. The Chief of Farmer Programs, 
Herman Lundy, outlined and discussed in details the background for the 
establishment of funds for farm ownership loans to eligible members of 
Socially Disadvantaged groups who will operate family-size farms, and 
the benefits anticipated as a result of the program.
    The three key points in his discussion, emphasized very clearly by 
Mr. Lundy: intent of FmHA:

   Make funds and farmland in the possession of FmHA more 
        available to socially disadvantaged persons.

   Discover and remove obstacles that prevent the full 
        participation of those persons in FmHA farm ownership loan 
        programs.

   Provide necessary technical assistance to qualified 
        applicants in applying for the loans and in developing the 
        sound farm management practices essential for success in their 
        farming operations.

    Ada Marshall, Coordinator Civil Rights expressed her concern of 
equal treatment for all borrowers and their rights of appeal. Group 
discussion followed each presentation. Based on the reaction of the 
people information presented was informative and appreciative.
    On the evening of October 29, and December 18, 1991 starting at 
7:30 p.m. a second and third meeting were held in Brunswick and 
Lunenburg for the socially disadvantage[d] people to inform and develop 
a closer relationship between the social disadvantaged people and the 
State Director, Lloyd Jones, from the point-of-view of FmHA program 
design. These meetings were well attended. Representatives from the 
State, Lloyd Jones and Herman Lundy; from the District Offices, Berry 
Wright and Otis Dailey; representing the Counties Office were 
Supervisors Charles Featherstun, Waverly Brown, and Wayne Dail. Dr. 
Thomas Law, President, St. Paul's College, Lawrenceville, Virginia, 
represented the College's while Gladys Holland, CES VSU, Richard 
Booker, Assistant Director, CES VSU and Richard Cagan, CES, CRD VSU 
were representatives of Virginia State University, Petersburg, Va.
    Herman Lundy, Chief of Farmer Programs described the purpose of the 
meetings as a method of establishing better understanding of Farmer 
programs and the State Directors's office.
    It is very important for State FmHA staff and the socially 
disadvantage[d] to be able to relate with each other and discuss issues 
involving FmHA and the people directly affected by the program, 
concluded Mr. Lundy.
    Lloyd Jones, State Director, was the guest speaker at both 
meetings. He started off with creating a positive attitude of FmHA by 
informing the people of his concerns of issues affecting them and their 
concerns were problems that concerns him and the entire staff of 
Farmers Home Administration. Mr. Jones discussion was indicative of 
bringing the people and the staff of Farmers Home Administration closer 
together in dialogue, positive thinking and affirmative action. Mr. 
Jones left no doubt in anyone['s] mind of his sincerity in the well 
being of the socially disadvantage[d] people. He open the doors to the 
State Office in welcoming the people to telephone or visit for a 
conference at anytime or whenever an issue can not be resolved on a 
county or district level. Jones sensitivity of the people problem 
projected over the audience like a beacon light. The people could feel 
his concerns and reacted in response.
    Mr. Jones was seriously concerned by the [loss] of land by SDP and 
the need for more people to re-think their priorities. The meetings 
were designed to accommodate a low profile where everybody felt very 
much [a part] of the discussion. The discussion periods were extended 
beyond allotted time in order to give everybody the opportunity to 
participate.
    The need for a training system for borrowers and county FmHA board 
members were emphasized during the meeting. Farm management and closer 
check on SDA resources, capabilities, and past farming history were 
mentioned as very important components for successful farming 
enterprise.
    These meetings provided an opportunity for people to meet the State 
Director and ask question[s] concerning FmHA programs. A total of sixty 
eight people participated in these meetings conducted by the visiting 
professor. These conducted meetings were the beginning of a series of 
group meetings planned in the future. We can assume that the results of 
these group meetings strongly emphasizes the importance of initiating 
educational assistance programs for S.D.P. and FmHA personnel. The need 
for Cooperative Extension Service assistance in Farm Management; 
Budgeting; Enterprise selections, alternative enterprises; and in 
developing a feasible family farm.
    The visiting professor attended and participated in a ``Small 
Farmer Training Assistance Project Meeting'' in Washington, D.C., 
September 18-20, 1991. Representatives from several states participated 
in the program sponsored by the National FmHA Administration Office. An 
exchange of ideas and methods used to assist the socially disadvantaged 
were presented by organized discussion groups. The meeting resulted in 
providing a vast number of approaches to the problems of socially 
disadvantage[d] people. Also, provided some successful examples of 
assistance to family farmers.

    Highlights of Small Farmer Conference--September 18-20, 1991 
Washington, D.C.

    Overview of Nine States Programs

    Effective Teaching, Training and Success

  1.  One-on-one technical and financial assistance

       Technical assistance to include farm, home and goals of 
            family
       Estate planning for Black land loss and property 
            transfer between gener-
              ations and need for wills
       FmHA borrowers only to outreach primarily

  2.  1890 project Cooperative Extension Program (CESP) staff to attend 
            FmHA training meetings to remain abreast of changes, issues 
            and reverse.

  3.  How to set up SDA project--joint decision within the State 
            between CEP and FmHA to address the need of State and 
            county, i.e., technical assistance to FmHA borrowers to 
            emphasize SDA outreach.

  4.  How to get farmers more involved--let the farmer pick the time 
            and place, build around issues or current problems, build 
            around social activities or groups, i.e., churches, friends 
            on technical tours (civic organizations and public 
            assemblies).

  5.  Develop materials more suitable to that clientele, i.e., FmHA 
            record book is too difficult choose another, i.e., CES ``  
            '', recipe budget box.

  6.  Develop a student program to create positive image for 
            agriculture High school, 1st grade-up, film on Hi-Tech 
            harvest, tours to campus, etc.

  7.  The Council of 1890 Presidents and interested farm groups should 
            put pressure (lobby) to appropriate the $10M that has been 
            authorized.

  8.  Problems if continuity of program is disrupted.

    To Assure Delivery of Programs and Training

    FmHA should be responsible for adequate ongoing training of SDA 
employees:

  a.  1890 Institution develop news articles, pamphlets, radio and TV 
            programs for delivery to target clientele; must be reviewed 
            and approved by FmHA for technical accuracy prior to 
            delivery to news media and public.

        The 1890 extension personnel working with the SDA Project are 
            provided orientation training by the 1890 and 1862 Land-
            Grant Institutional personnel and FmHA State Office.
        During the year follow-up training should be provided by FmHA 
            and technical subject matter specialists from the Extension 
            Service.

    Cooperative Agreement with 1890--FmHA

  1.  Model document

       good

       allows for flexibility

  2.  Paperwork/Reporting

       standardized

       minimized

  3.  Evaluation Criteria

       quantifiable and realistic for Part I?

       Part II criteria = more important

  4.  Success/Continuity

       If project is successful, funding for following cycle 
            should be automatic (18 
              months = relatively short)

       1890s' responsibilities for continuity

       strengthening 1890s' programs

    FmHA Loan Servicing/Processing

    FmHA Supervisors should use all available agencies to assist in 
coming up with a suitable farm plan. The potential borrower can go to 
the Agricultural College, Extension Service, to assist with initial 
preparation of a farm plan. FmHA County Supervisors should assist in 
imputing data once received from the borrower. County Supervisors must 
adhere to the statutory requirement for 30 day and 60 day milestones 
for processing and notification of loan applications. A piecemeal 
approach on the part of the borrower in disclosing debts and FmHA 
notification incomplete request will delay processing.

    Assessment of Applicant Potential for Success

          Investment--Other resources

    Grantee should work with individuals who have a potential for 
success. 1890 county extension representatives should screen 
applicants, their resources and investments and their capability for 
success before bringing them to the FmHA Office. Those who are poor 
candidates for success should be told.
    The 1890 Institution needs to be an active participant in County, 
District and State FAC meetings with other public and private 
institutions and entities invited at local level as appropriate.

    Continuing Extending Projects To Avoid Breaks in Service

    FmHA should:

          Invite proposals and extensions in a timely manner with 
        specific timeframes.

    Statement: Need for Cooperatives

  1.  Small farmers should be encouraged and assisted to assemble 
            themselves in production units/cooperative in order to meet 
            market demand, receive greater return on investments, share 
            cost of cooling, grading, packing and transporting products 
            to market.

  2.  USDA should assist cooperatives/production units with mechanism 
            for financing of processing and marketing facilities by 
            direct loans if guaranteed loans are unavailable.

  3.  Hold small farm conference on alternative farm enterprise. 
            Include representative from successful cooperative 
            presenters at conference.

        In regard to funding for alternative farm enterprise:

          a.  The Administrator should clarify and strengthen the 
            policy statement 
                    on financing alternative agriculture enterprise.

    Recruiting and Retaining Students

    Recruitment can begin with an approach to careers in agriculture 
education at an early age, teaching students about the wide array of 
jobs related to agriculture.
    Retention efforts may be tied to productive internships and 
cooperative experiences plus tutorial programs and exposure to other 
agency staff as occasional teachers using innovative teaching 
techniques and field trips.
    All 42 USDA agencies should be involved in recruitment for interns, 
cooperative education and other types of employment opportunities at 
both high school and college level.

    How Can We Get More Dollars for Alternative Enterprises

    Involve all agencies to make a complete analysis of farm potential 
by looking at alternative enterprises that are profitable. County 
Supervisors should provide guidance as well as the Extension Service.

  1.  Procedures and 1890 representatives need to do a better job of 
            developing crop budgets, marketing plans and so forth 
            (financial data).

  2.  Training FmHA employees on financing alternative crops.

  3.  Involving lenders (sell alternative crops).

    Evaluation Summary Statement

    In evaluating the program efforts, one must conclude that the 
socially disadvantaged people have been denied opportunities to fully 
participate in a bias society. This situation had a degenerating effect 
on the economics, educational and social development of socially 
disadvantaged people. To the extent of [loss] of land ownership, 
economic depression, deprivation of job opportunities and inferior 
educational systems.
    Land loss among Blacks continue to climb above the average of all 
ethnic groups. There are a few purchases but land losses are much 
greater than the gains. The trend for Black land ownership look bleak. 
Economic change could reverse the land ownership trend among (SDP) 
socially disadvantage[d] people. The future will tell.
    In conducting program efforts, emphasis on economic development 
through better resource management, educational training and self 
esteem were priorities in program execution. Group community meetings 
one-on-one contacts, mass media, bulletins, letters, telecommunication 
and conference were the methods employed to upgrade socially 
disadvantaged people.
    Although the program initiatives had some impact on the well being 
of (SDP) socially disadvantage[d] people there still remains a wide 
economic and social gap between ethnic groups in the state of Virginia.

[December 13, 1991]

  Virginia State University
  P.O. Box 540
  Petersburg, Virginia 23803

9 December 1991

    Dear Friends:

    Farm ownership loans for socially disadvantaged persons will be 
discussed in the Agriculture Service Building, 116 Commerce Street, 
Kenbridge, Virginia on December 18, beginning at 7:00 p.m.
    The forum will be conducted by Farmers Home Administration's 
Management Specialist. Lloyd A. Jones, State Director, FmHA, will be 
our guest speaker, assisted by Herman Lundy, Chief of Farmer Programs--
both from the FmHA State Office, Richmond, Virginia.
    The discussion will be centered on the need, purpose, and benefits 
from the SDA program to land owners. There will be 1 hour of allotted 
time for group discussion on issues related to Farmers Home 
Administration programs.
    We hope you will attend and participate in these activities. This 
is your opportunity to meet our State Director and let him know how you 
feel about the FmHA Program.
            Sincerely,
            
            
Hermon Maclin,
Management Specialist, FmHA
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

[October 17, 1991]

  Virginia State University
  P.O. Box 540
  Petersburg, Virginia 23803

16 October 1991

    Dear Friends:

    Farm ownership loans for socially disadvantaged persons will be 
discussed on October 29 beginning at 7:00 p.m. in the Government 
Building located on Tobacco Street, Lawrenceville, Virginia.
    The forum will be conducted by Farmers Home Administration's 
Management Specialist. Lloyd A. Jones, State Director, FmHA, will be 
our guest speaker, assisted by Herman Lundy, Chief of Farmer Programs--
both from the FmHA State Office, Richmond, Virginia.
    The discussion will be centered on the need, purpose, and benefits 
from the SDA program to land owners. There will be 1 hour of allotted 
time for group discussion on issues related to Farmers Home 
Administration programs.
    We hope you will attend and participate in these activities. This 
is your opportunity to meet our State Director and let him know how you 
feel about the FmHA Program.
            Sincerely,
            
            
Hermon Maclin,
Management Specialist, FmHA
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

[July 16, 1991]
Semi-Annual Report
  Farmers Home Administration
  Virginia State University
  Petersburg, Virginia

June 30, 1991

Hermon L. Maclin,
(Visiting Professor).

    The visiting professor serves as an adviser to the State Director 
in matters concerning Black-owned farms and other socially 
disadvantaged borrowers. Efforts are made to enhance management of 
socially disadvantaged farm families and to establish a closer rapport 
with Virginia State University.
    In an effort to focus attention on objectives of the Socially 
Disadvantaged Program, the visiting professor performed a varied number 
of activities. Seventy eight (78) days were spent during the months of 
January through June 1991 conducting the program.
    Special emphasis was placed on locating and assisting socially 
disadvantaged families who may qualify for FmHA assistance; to inform 
and advise the general public and special interest groups about 
available FmHA agricultural assistance; to identify resources available 
to SDA; and to make recommendations for alternative farm enterprises 
which would enhance profitability.
    Socially Disadvantaged Program (SDA) objectives were presented to 
members of the NAACP in Brunswick and Mecklenburg Counties. Programs 
were duplicated, in Charlotte and Halifax Counties, February 20 and 28 
respectively to members of the County Assembly. Total attendance at the 
meetings was 140. A workshop was conducted in Farmville, Va on March 
20, 1991.
    Approximately 15 people attended this activity in the ASCS 
Conference Room. The Chief, Farmer Programs and the Civil Rights 
Coordinator made presentations. Mr. Herman Lundy, Chief, Farmer 
Programs, outlined the procedures and requirements for obtaining SDA 
loans, what is required from the borrowers and what to expect from 
Farmers Home Administration (FmHA). Ms. Ava Marshall, Civil Rights 
Coordinator expressed her concern about equality of treatment for all 
borrowers as provided by the Civil Rights Act, and your right to 
participate.
    The duties of the visiting professor and the program objectives 
were defined in common terms to clarify some of the terminology. For 
example there were questions concerning the eligibility for a SDA loan. 
Can an individual receive a loan on the basis of sufficient education 
or training without having farming experience (within 1 year of the 
last 5)? This question needs further clarification so as to leave no 
doubt in anyone's mind on the matter of qualification for borrowers.
    Wayne Dail, County Supervisor, FmHA, extended an invitation and 
encouraged borrowers to visit his office for assistance at anytime. 
Cooperative Extension Service (CES) was represented at the meeting by 
Kylor Reed, Agent, and Warren Scott, Technician. The participants 
expressed their appreciation for receiving a better understanding of 
the SDA and FmHA at-large program.
    Six visits were made to discuss the SDA Program with FmHA 
Supervisors in Halifax, Lunenburg, Prince Edward, Southampton, 
Brunswick and Mecklenburg Counties. A list of SDA borrowers were 
provided by the County Supervisors that perhaps would need some 
managerial help. Conferences were conducted with Cooperative Extension 
Service in Dinwiddie, Greenville, Southampton, Brunswick, Lunenburg, 
Nottoway, Sussex, Surry and Amelia Counties. Each Cooperative Extension 
Service unit was provided with [an] overview of the FmHA SDA programs 
and was asked as an educational source to inform the public.
    Twenty on-farm visits were made during the work period. Discussions 
involved crops to plant for profit, non-profitable crops for the 
farming area, and general management practices. On several occasions 
visits were made to inform the borrowers about the SDA programs.
    Approximately 100 telephone calls were received and made to discuss 
program objectives, planning activities, scheduling appointments, and 
responding to request. Many conferences were held with the Chief, 
Farmer Programs (Herman Lundy); staff members Gladys Holland, Joel 
Plath, and CES Director Dr. Lorenza Lyons and Vice President Dr. 
Clinton Turner.
    At the request of Ben Lee, Vocational Agricultural Instructor, 
Southampton County a ``pep'' talk was given to 18 high school students 
enrolled in vocational agriculture at the Southampton High School, 
Courtland, Virginia. The discussion involved the importance of securing 
a good education for personal satisfaction or self-esteem, for public 
service, economic future, better livelihood, a resource for better 
community development, and the ``Well Being of the Family.'' Outlined 
career opportunities in areas of agriculture and related occupations, 
and what is required in order to compete with the ``working world?'' 
Closing remarks were centered around the agricultural program at 
Virginia State University and would like for each class member to 
consider attending The State Land-Grant University.
    A very small number of people attending the group meetings were 
engaged in farming. Nevertheless, the people were interested in knowing 
more about the FmHA programs for the benefit of informing others who 
may need the service. Several farmers indicated their desire for 
further contacts with the representatives from the FmHA. The names, 
addresses and telephone numbers are a part of our files at VSU for the 
purpose of future contacts.
    The on-farm visits with borrowers indicates a need for better farm 
records. Record books are provided but very few farm enterprise records 
are kept. This creates a problem when time comes for farm planning. 
There is no way of pin-pointing profitable farm enterprises without 
records of the past farming year. Although there are crop and livestock 
budgets available each farming operation is different. So the average 
budget in many cases are not applicable. Many farm operations need 
assistance in decision making. If the operation is without any records 
of the last years cropping system, it is hard for operators or 
management specialist to make the right decision for the current year. 
A farm management specialist knowing the land capabilities for the 
State of Virginia could inform the farm operator what to expect in 
return from each enterprise.
    Judging from observation, capital investment is one of the major 
causes for the situation borrowers are confronted with today. A large 
number of borrowers have purchased additional tractors for certain jobs 
only, to avoid the time it takes to change equipment. The same job in 
many instances, can be done with one tractor. This management system 
cuts profits and should be closely monitored.
    Traditional farming is one of the major obstacles of many socially 
disadvantaged farm families today. Growing a set number of acres of 
grain, so many acres of hay, etc., because of tradition, can be costly 
to the farming operation. The cropping system should be designed to 
fill the needs of the operators and at the same time show a profit. For 
an example, corn cannot be grown in South Central Virginia for a profit 
based on current prices. The cost input per acre for corn on the 
average is about $240.00. Average corn prices paid to producers amount 
$2.40. A very few farmers will average 100 bushels of corn per acre. At 
$2.40 per bushel this is only the ``break-even point.'' For assurance 
reasons only, corn production in a livestock operation may be 
justified.
    There are other farm enterprises that should be eliminated in 
farming situations in order to establish a profitable unit. These 
factors must be taken into consideration when we establish farm plans 
for borrowers. Cooperative Extension Service and CSRS at Virginia State 
University have established farm enterprises designed for small 
farmers. Some of these enterprises could be profitable for some 
borrowers.
    The socially disadvantaged borrowers are confronted with many 
management problems. A large number were ``share croppers'' before 
becoming borrowers and potential owners. They are confronted with new 
horizons--decision making. Quite often, the wrong decision is made, 
resulting in poor farm management. Perhaps this could have been 
prevented through some form of educational channel. Maybe a farm 
management backup system. During the several conferences with FmHA 
County Supervisors, it was indicated that the socially disadvantaged 
borrowers needed more assistance in management and that the existing 
condition of FmHA (S-51) could have been because of poor supervision.
    Many socially disadvantaged borrowers become wors[e] off 
financially as a result of borrowing money and over-extending their 
capabilities to manage their farming operation than they were before 
making the loan. When this type of situation occurs the relationship 
between the borrowers and Farmers Home Administration changes from a 
positive attitude to a negative attitude. In this state of affairs the 
image of the loaning agency culminates into a very undesirable state of 
being. To prevent or reduce to the minimum discontent between both 
parties, perhaps an analysis of the past records should be made to 
determine what went wrong; based on findings establish guidelines and 
procedures that will better fit the needs of SDAs and not their 
destitutions.
    Socially disadvantaged people will continue to be victims of 
landownership losses unless something can be done to instill in the 
minds of young people that ``owning land is a precious heritage and 
without it, there is no legal independency to live on.''
    Most of our professionals in teaching positions have taught our 
youth to endeavor in careers other than agriculture. This in many 
respects, have dampened the minds of young people and their 
appreciation for land ownership. Blacks who lived on and farmed the 
land operated with limited resources. This created hardship for many 
Black families causing many family members to leave the farm and the 
land with no intention of returning; nor maintaining family ownership. 
Blacks who worked as share-croppers worked hard, but owned nothing. 
They were poorly educated and whenever the opportunity presented itself 
they would migrate to cities with an attitude of hate for land.
Recommendation
    In order to be more serviceable in making loans to the socially 
disadvantaged clientele, FmHA should take a closer look at guidelines 
in determining eligibility for socially disadvantaged applicants. For 
example, potential borrowers with farming experience or training in 
agriculture should be considered not on the basis of having farmed 1 
year of the last 5, but on the basis of farming experience, 
agricultural training, managerial ability, available resources and 
other human traits important to successful business endeavors.
    SDA needs more on-farm management assistance during the production 
of farm enterprises. Perhaps more when the borrower has farmed as a 
tenant, when all farm management decisions were made daily by the 
landowner. Being accustomed to executing decisions and not making any, 
puts the borrower in a situation where management becomes a new chore 
that is difficult to cope with, from the standpoint of making the right 
decision. A farm management specialist could assist these borrowers 
whenever these problems occur.
    A closer check on farm machinery, equipment and buildings should be 
done to ascertain proper maintenance. Through my observation some 
borrower's roofs on buildings are falling in because of negligence. 
Machinery is improperly housed and in need of repairs.
    Farm enterprise recordkeeping should be enhanced and put on the 
priority list of demands. Maybe the official FmHA record book should be 
revised to better fit the requirements and at the same time much easier 
for the borrower to record farm transactions. More emphasis and time 
should be considered in writing individual farm plans. No two farming 
situations are alike. This being true, all precautions should be used 
in choosing farm enterprises adaptable to the operator and show 
profitability.
    It is believed that much more can be done to help borrowers who are 
in default and classified as FmHA 51-S. There is a need for a 
comprehensive program to study the situation and other factors 
responsible for a large number of socially disadvantaged borrowers who 
are victims.
    Based on the list of borrowers received from Farmers Home 
Administration County Supervisors, it was indicated that over fifty 
percent of the socially disadvantaged borrowers were classified as FmHA 
51-S--Default in payments. With this type of situation involving most 
of the Counties it is a possibility that socially disadvantaged farmers 
will continue to lose land and capital at an increasing rate. On the 
other hand, the initiation of an educational enhancement program and 
establishing some new initiatives will perhaps slow down the present 
trend.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

Rise Up--Celebrate Our Successes
1991 Conference of Extension Professional Associations
May 28-30, Lynchburg Radisson

 
 
 
Tuesday                 7-9:00 p.m.             Board meetings (if
                                                 needed)
Wednesday, May 29       7-9 a.m.                Early arrival
                                                 refreshments
                                                 hospitality room
                        8:00                    Registration, Hotel
                                                 lobby
                        9:00                    Benefits Update, Kenneth
                                                 Martin--Ballroom
                        9:50                    Break
                        10:10                   Association Committee
                                                 Meetings
                        11:00                   VESA State Committee
                                                 Meetings
                        11:00                   Professional Improvement
                                                 Seminars (3)
                        11:45                   Buffet Luncheon hosted
                                                 by VESA and ``Special''
                                                 after lunch program for
                                                 all attending
                        1:30 p.m.               Professional Improvement
                                                 Seminars (2)
                        1:30                    VAE4-HA Annual Meeting
                        2:30                    Refreshment break
                        2:50                    Epsilon Sigma Phi Annual
                                                 Meeting
                        3:00                    Professional Improvement
                                                 Seminar for Agents with
                                                 less than 5 years
                                                 service and Agents not
                                                 E.S.P. members. ``Jest
                                                 For The Fun Of It''
                                                 sponsored by VESA
                        4:15                    DSA Awards Presentation
                                                 sponsored by VAEHE. All
                                                 conference participants
                                                 please attend!
                        6:00                    Country Dinner sponsored
                                                 by VAEHE
                        7:30                    Board Meetings (if
                                                 needed)
                        7:30                    Social sponsored by
                                                 VAEHE
Thursday, May 30        8:00 a.m.               VAAEA and VAEHE Annual
                                                 Meetings
                        8:30                    Professional Improvement
                                                 Seminar, VAE4-HA
                        10:00                   Refreshment Break
                        10:20                   VESA Annual Meeting
                        11:45                   Hotel check-out
                        12:15                   Awards Luncheon hosted
                                                 by Epsilon Sigma Phi
                        2:00                    Conference evaluation
                                                 and comment
                        2:15                    Association Board
                                                 Meetings
                        2:30                    VESA Board Meeting
                        3:00                    Have a safe trip home!
 
     Committee lists and detailed meeting locations will be in
     your packet upon arrival. Country Dinner location will be announced
     via electronic mail 1 to 2 weeks prior to the conference.
 
     The elements of the program are listed as of 2/15/91 and
     may be subject to slight changes. Contact Gene Daniel in
     Gloucester, EXO73, if you have a problem or question prior to
     registration.
 
     No registration needed for P.I. seminars. First come . . .
 

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
Farmers Home Administration
Progress Report--August and September, 1990
Visiting Professor (Management Specialist)
    The Socially Disadvantaged Program (SDP) effort in conjunction with 
Virginia State University, involving Cooperative Extension Service 
(CES) as liaison to the program, is being administered in twelve 
counties. One staff meeting was held with the Director of CES and the 
Associate Vice President for Agriculture and Extension to discuss on-
going activities. Seven conferences were held with CES agents in 
Sussex, Southampton, Cumberland, Prince Edward, Charles City, and 
Brunswick. These conferences were designed to enhance the program 
objectives. Three staff meetings and several telephone conferences were 
held with Chief Farmer Programs Director, and one with the State 
Director, Farmers Home Administration, and Chief Farmer Programs 
Director for the purpose of program evaluation and recommendations. 
Visited four (4) farm families who were interested in SDA program 
loans.
    The Visiting Professor worked thirty three (33) days conducting 
educational presentations at group meetings held by Civic 
Organizations, NAACP Chapters, Churches, and Farmers Home 
Administration Districts. Conferences were held with County (Fm.H.A.) 
Supervisors in Charles City, Brunswick, Mecklenburg, Prince Edward, 
Cumberland, Greensville, Lunenburg, and Franklin (special assignment) 
Counties.
    In the office, research was conducted on Farmers Home 
Administration procedures and policies. Also did some research on Black 
Demographics. Weekly conferences were held with CES staff associated 
with Fm.H.A. programs to coordinate efforts, exchange ideas, 
activities, and accomplishments. Telephone calls were made to schedule 
group meetings, staff conferences, and one-on-one farm visits.
    During group meetings in Prince Edward County a number of questions 
were asked about Fm.H.A. policies and County Supervisor. Some felt that 
they were not treated fairly on several occasions. Others discussed the 
hassle they were confronted with along with too much ``red tape''. A 
list of names interested in buying land was provided for loan 
consideration. In churches the ministers requested an area meeting for 
the benefit of several counties to discuss farm ownership loans for 
socially disadvantaged persons. Based on conferences with a number of 
CES staff members and Fm.H.A. County Supervisors, there need to be some 
changes in policies and guidelines if we are to help the SDP in 
Virginia.
    In summary and evaluation there are indications that more and more 
SDAs are [losing] land than ones gaining land. Socially Disadvantaged 
People are eager to purchase or maintain their farms. Yet in many 
instances, financial difficulties have prevented them from doing 
either. A large number need to be taught management skills once they 
become borrowers.
    Maybe the existing situation is due to over-priced appraisals at 
the initial phase of the borrower's purchase. Allowing loans for the 
purchase of excess machinery, equipment, and supplies (chemicals, etc.) 
are other symptoms of financial disaster. A majority of borrowers were 
faced with the problem of making management decisions. They have the 
technique and ability to perform the farm chores, but they lack the 
ability of deciding what to do when. This is the result of being a 
share-cropper where the landlord made the decisions and the cropper did 
the work. When Fm.H.A. grants a loan to a tenant farmer to purchase a 
farm and operate same, he is being placed in a somewhat different 
situation. He has to make the decisions and perform the farming 
activities. Making the wrong decision has been the failure of many 
borrowers.
    Approximately six hundred (600) people have been contacted in group 
meetings, churches, NAACP meetings, farm visits, and by telephone. 
During the state of being in communication with people, program 
initiatives were outlined and questions answered according to 
established guidelines. A list of NAACP State Chapter Presidents, and 
meeting dates have been obtained.
    In response to program efforts, sixteen (16) telephone calls were 
received requesting more information. In the designated counties, seven 
conferences were held with County Farmers Home Administration 
Supervisors. By special request, conferences and visits to SD Borrowers 
were made in September. To date there are six socially disadvantaged 
people who are potential land buyers who plan to make applications for 
Fm.H.A. loans.
    Based on past experience, knowledge of the Fm.H.A., S.D.A.'s 
situation, policies and guidelines of Farmers Home Administration and 
the brief period of direct exposure to the system, I am recommending 
for consideration the following:

   Establish different guidelines for the Socially 
        Disadvantaged Applicants (S.D.A.)

   Provide for on-farm management for borrowers (Farm 
        Management Specialist)

      a.  Cost of capital (land, equipment) is not in access of market 
            value.

      b.  Variable cost of production per acre is complementary to 
            area.

      c.  Crop enterprises selected on the basis of land capabilities 
            and use. (Livestock and poultry if feasible.)

   Define justifiable machinery and equipment needed for 
        maximizing farm profits. (Too many ``borrowers'' can't justify 
        equipment.)

   Keep a closer check on maintenance (machinery, buildings, 
        equipment).

   Require complete recordkeeping for each enterprise (to 
        determine profitability).

   Organize a special program to rescue 51-S borrowers (a large 
        number of SDA's fall in this category).

   Change guidelines for foreclosure borrowers (more family 
        participation, if agreed upon).

 
 
 
                       Farmers Home Administration
 
                          Management Specialist
 
                          (Visiting Professor)
 
                      Farm Family Information Sheet
 
Name____________________________________________________________________
 ________________
 
Address_________________________________________________________________
 _________________
 
________________________________________________________________________
 _________________
Telephone
 Number_________________________________________________________________
 ______
 
Family                   Family                   Age of
 Size________________     Health_____________      Operator____________
 
Formal
 Education______________________________________________________________
 __________
 
Type of
 Farm___________________________________________________________________
 _________
 
Number of                                   Open Farm
 Acres____________         Land________________________________________
 
                         Pasture                  Forest
                          Acres_____________       Land________________
 
                         Timber_________________  Cutover_______________
                          __                       _____
 
Homestead
 Acres__________________________________________________________________
 _______
 
Farming Experience (Number of
 Years)____________________________________________________
 
Organization
 Affiliation(s)_________________________________________________________
 ________
 
Farming--Part-                                    Or Full-
 Time______________________________________        Time_______________
 
Workforce (Number)                                Hired_________________
 Family_______________________________             _____
 
Crops
 Grown__________________________________________________________________
 ___________
 
________________________________________________________________________
 _________________
 
Livestock Raised
 (Number):
 
Cattle_________________  Swine__________________  Other_________________
 ____                     ___                      ____
 
Poultry (Number):
 Kind__________________
 ___
 
Children In:
 
4-H                      High                     College_______________
 Clubs_______________     School________________   _____
                          _
 
Program Participation (County, State,
 National)____________________________________________
 
________________________________________________________________________
 _________________
CES____________________  FmHA___________________  S.C.S.________________
 _                        __                       _____
                         ASCS___________________  Other_________________
                          ___                      ____
Management Problems:
 
1.______________________________________________________________________
 _________________
 
2.______________________________________________________________________
 _________________
 
3.______________________________________________________________________
 _________________
 
4.______________________________________________________________________
 _________________
 
5.______________________________________________________________________
 _________________
 
Credit Available:
 
1.______________________________________________________________________
 _________________
 
2.______________________________________________________________________
 _________________
 
3.______________________________________________________________________
 _________________
 
Credit Needs To Be Used For:
 
1. Farm
 Operations_____________________________________________________________
 __________
 
2. Real                  Indebtedness___________  Purchases_____________
 Estate______________     _____                    _____
 
3. Others: (List Below)
 
________________________________________________________________________
 _________________
 
________________________________________________________________________
 _________________
 
Management Specialist Comments:
 
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

July 1990
Farmers Home Administration
Progress Report
Management Specialist
H.L. Maclin
(Visiting Professor)

    The agent (representative) spent a large amount of time studying 
Farmers Home Administration Policies and Guidelines. Orientation was 
accomplished through staff meetings and staff member conferences.
    We have collected a list of socially disadvantaged applicants 
(SDAs) from Brunswick and Greensville Counties. So far three on-farm 
contacts have been made to discuss the management system. The SDA's 
present farm management system will be the main component in making 
recommendation for change in the farming and administrative systems.
    A list of community organizations have been obtained from the 
``Target Counties''. From this list, three program presentations were 
made in July.
    Dialogue between the agent and from Fm.H.A., County, and District 
Supervisors have been encouraging. The agent has received several calls 
from prospective clients for more information about the SDA program 
activities.
    Overall the program is challenging. It gives the agent an 
opportunity to ``pick-up-on'' and analyze some of the major issues 
confronting the socially disadvantaged applicants.
    A Farm Family Information Sheet was prepared to be used when 
interviewing SDAs (copy enclosed). When completed, it will provide some 
basic information.
Visiting Professors Program
July 8, 1983

    Purpose: To establish closer rapport with the 1890 institutions. 
During the first year, this summer, the visiting professor will study 
agency programs and operations to determine methods for improving 
Black-owned farms in Alabama through greater understanding and 
adaptation of financial programs available through the Farmers Home 
Administration.
    Authorization: Un-numbered memorandum, dated May 22, 1983, directed 
selected states to employ visiting professors from 1890 Land-Grant 
Institutions. Alice Oakley Byrd of EEO Staff, National Office, has 
advised that Alabama should limit hiring to one professor from either 
Alabama A&M or Tuskegee Institute.
    Employment Data: Appointment is under Schedule A--noncompetitive. 
Salary will depend on qualifications of selected professor; GS-11 
($11.78 per hour) or GS-12 ($14.12 per hour). The appointment is 
limited to 130 working days per year. Tour of duty may be full-time or 
part-time (interpreted as 130 part or whole days). Duty hours can be 
changed from month-to-month, but there must be definite duty hours and 
a duty station.
    Applicants: Three (3) professors have expressed interest in the 
Visiting Professors Program and have been scheduled to be interviewed 
for the position allocated to Alabama this year. They are:

  1.*  Dr. Joseph Befecudu (pronounced Befecartre)--Department of Agri-
            Business--Alabama A&M. Appointment: 9:00 a.m., July 15, 
            1983.

  2.*  Dr. Jones, Department of Agri-Business, Alabama A&M. 
            Appointment: 9:00 a.m., July 15, 1983

  3.  Professor Voncile Hale--Tuskegee Institute Appointment: 3:00 
            p.m., July 14, 1983

          * The above professors will be accompanied by Dr. Preyer who 
        is the Dean of the Agri-Business Department at Alabama A&M. Dr. 
        Preyer would like to meet the State Director.

  Contact at Alabama A&M:
  Dr. Aytch (pronounced H)
  Telephone 859-7302
Agricultural Mgmt. Specialist
GS-475-12
A. Introduction
    This position is located in the Farmers Home Administration, 
District Office. The incumbent of this position serves as an advisor to 
the State Director in matters concerning Black-owned farms. The 
incumbent will strive to improve operation of the Black-owned farms and 
will strive to establish a closer rapport with the 1890 Land-Grant 
Institutions.
B. Major Duties and Responsibilities
   Explores alternatives and prepares analytical materials and 
        collects documentation necessary for final action by State 
        Director.

   Identifies and evaluates options to increase income on small 
        farm operations and identifies and evaluates current enterprise 
        combinations and practices utilized by small farm operators.

   Determines the level of knowledge and utilization of 
        services of selected public and private farm-related 
        organizations and attitudes toward use of these services by 
        small farmers.

   Identifies resources--their availability and accessibility 
        to small farmers.

   Conducts studies to determine the extent off-farm income 
        among small farmers that contributes to the total family income 
        and farming operations.

   Evaluates and describes marketing channels utilized by small 
        farm operators and reports to State Director facts found.

   Analyzes field program activity reports to determine trends 
        or detect weaknesses and recommends measures or prepares 
        materials to remedy conditions noted and informs State Director 
        of same.

   Informs and advises the general public and special interest 
        groups about available agricultural and other rural credit 
        assistance.

   Formulates the quality and level of available labor and the 
        timing of off-farm employment on the selection of farming 
        enterprises.

   Prepares reports and submits to State Director on items such 
        as:

    1.  Recommend program changes or new programs which would 
            accomplish the 
              objective of saving the Black-owned farm.

    2.  Identify steps which could be taken to reduce the loss of 
            Black-owned farms 
              under existing FmHA and other USDA programs.

    3.  Compare the loss of Black farmers to the situation in other 
            states with sig-
              nificant Black population and Black ownership of farms.

  4.  Investigate and analyze the farming operations of Black-owned 
            farms in Alabama.
Factor 1. Knowledge Required of the Position
    Position requires a comprehensive knowledge of problems related to 
farming practices in the rural areas. Must have a basic knowledge of 
FmHA program objectives, regulations, and policies, and an 
understanding of financial practices, tax laws, and legal structures, 
and the state and local realty laws. Must have the ability to evaluate 
and analyze techniques to effectively assess small farming operations.
Factor 2. Supervisory Controls
    Incumbent works under the general supervision of the State 
Director, working closely with other State Office program officials and 
direct day-to-day supervision of the District Director. The employee is 
assigned duties in terms of objectives, general ground rules, but must 
plan and carry out specific duties on personal initiative. The broad 
scope of duties requires an ability to determine the proper priority of 
each of the tasks to be performed. Because of constant travel and type 
of work to be done, supervision is extremely limited.
Factor 3. Guidelines
    Guidelines in the form of FmHA Instruction and policy are available 
(also assistance of District Director or other FmHA employees), but 
considerable judgment is required in applying them to a variety of 
financial entities--no two of which are comparable--involving loans for 
farming. Follows National and State Office administration and 
management instructions in assessing rural needs and operations and 
regulating corrective procedures.
Factor 4. Complexity
    Complexity of this position rests with developing program 
objectives, and for exercising broad program evaluation. Extensive 
coordination and joint planning contacts with other governmental 
agencies and public groups to develop program activities are required.
Factor 5. Scope and Effect
    Programs administered involve the physical and economic well being 
of a substantial population of the small community and rural segment of 
the State.
Factor 6. Personal Contacts
    Contacts are with borrowers, prospective borrowers, attorneys, 
representatives of other lending organizations, and with management 
officials of Farmers Home Administration, etc.
Factor 7. Purpose of Contacts
    Contacts are for the purpose of amassing data and/or explaining 
program requirements; to assess rural needs, to report deficiencies or 
problems encountered; and to ascertain or give information concerning 
FmHA function.
Factor 8. Physical Demands
    The work requires some physical exertion; walking over uneven, 
rough, maybe rocky surfaces, but mostly work can be accomplished in an 
office setting. No special physical demands are required to do the job.
Factor 9.
    The work environment involves everyday risks or discomforts which 
require normal safety precautions typical of such places as office, 
meeting rooms, and residences or commercial vehicles. The office area 
is adequately lighted, heated, and ventilated.
Fact Sheet
Visiting Professors Program
    In our letter to Tuskegee and Alabama A&M we stated that the 
visiting professor would report on ``methods to improve Black-operated 
farms and increase survival of Black-owned farms in Alabama through 
greater understanding and adaptation of the financial programs 
available through the Farmers Home Administration''.
    To prepare such a report we would expect the individual employed to 
work as follows:

  1.  Thoroughly research FmHA farm programs and procedures in order to 
            obtain an in-depth understanding of the Agency's farm 
            programs.

  2.  To investigate and analyze the farming operations of Black-owned 
            farms in Alabama.

  3.  Compare the loss of Black farmers in Alabama to the situation in 
            other states with significant Black population and Black 
            ownership of farms.

  4.  Identify steps which could be taken to reduce the loss of Black-
            owned farms in Alabama under existing FmHA and other USDA 
            programs.

  5.  Recommend program changes or new programs which would accomplish 
            the objective of saving the Black-owned farm.
Note
          The visiting professor program is not a contract program 
        requiring a specific product. The visiting professor will be an 
        employee of the Farmers Home Administration under the general 
        supervision of the State Director and immediate supervision of 
        the District Director in the duty station area. As an employee 
        the visiting professor will be expected to report to his or her 
        duty station and work toward the above objectives which my be 
        expanded or refined during the terms of employment.

George S. Kennard,
Administrative Officer.

July 14, 1983

[December 19, 1983]

  Subject: Reaffirmation and Survey of FmHA's Visiting Professor's 
            Program
  To: State Directors, FmHA *
---------------------------------------------------------------------------
    * Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky, 
Louisiana, Mississippi, Missouri, North Carolina, Oklahoma, South 
Carolina, Tennessee, Texas, and Virginia

    On May 23, 1983, in response to President Reagan's Executive Order 
12320 instructing Federal Agencies to increase the percentage share of 
program funds allocated to Historically Black Colleges and 
Universities, I issued a memorandum establishing a program for the 
participation of 1890 Land-Grant Institutions in FmHA-sponsored 
programs. Our first effort in this regard was to implement a visiting 
professor's program in selected States by seeking to employ an 1890 
institution faculty member commencing with the summer of 1983. I wish 
to reaffirm this effort.
    We need to continue our commitment to the visiting professor's 
program. Our objectives, as described in my memorandum of May 23, 1983, 
will not be attained with last summer's effort alone. Our effort last 
summer was merely the first step in reaching our objectives, not the 
program's beginning and end. In this regard, some States--inadvertently 
misinterpreting the scope of the program--limited their effort to the 
summer months of 1983. What we are striving to accomplish, however, is 
a dynamic and substantive program continuing from year-to-year on a 
year-long basis having mutual benefit to FmHA and the institutions 
because of our close rapport and improved relationship. Our visiting 
professor's program, therefore, is a continuing effort, and you should 
gauge your involvement in the program with the broader scope in mind.
    A survey of States, taken in the second week of November, revealed 
that only one State had a visiting professor on its employment roles. 
There were four States, however, which were making plans to hire a 
professor during the school year 1983-84. The remaining 10 States had 
appointed no visiting professor, and moreover, their intentions were 
unclear at the time of the survey. I therefore urge those States having 
employment plans to follow through with them, and those States having 
no activity to initiate contact with the 1890 institutions without 
delay. A sample position description, which you should tailor to your 
State, is attached to facilitate the hiring process. For additional 
assistance, you may get in touch with Steve Klink, National Office 
Personnel Division on FTS-382-1071.
    Further, we have learned that success with these institutions is 
more likely to occur when the dean of agriculture is the person in the 
institution who is contacted. This approach is recommended, even though 
the attachment to my memorandum of May 23, 1983, lists the names and 
addresses of the Presidents of the 1890 institutions.

[December 15, 1983]

  Subject: Support of Historically Black Colleges and Universities--
            Community Facilities
  To: State Directors, FmHA: AL, AR, DE, FL, GA, KY, LA, MD, MA, MS, 
            MO, NC, OH, OK, PA, SC, TN, TX, VA, WV

    This is a follow-up to two previous memoranda concerning Farmers 
Home Administration's (FmHA) commitment to implement the President's EO 
12320, supporting Historically Black Colleges and Universities (HBCU). 
In response to EO 12320, I established a program for the participation 
of HBCU's in FmHA programs.
    My memorandum of May 11, 1983, requested each State Director to 
submit a report on actions taken to implement the FmHA policy regarding 
HBCU's. As of this date we have not received all of the reports. Please 
review your records and promptly submit your report if you have not 
done so.
    All of the listed HBCU's in your State should have been contacted. 
If the HBCU's have not been contacted plans should be made to do so. It 
may be appropriate to schedule a follow-up on previously contacted 
HBCU's.
    It is important that you express FmHA's sincere desire to assist 
the HBCU's in any manner possible consistent with our program 
regulations. It is imperative that in your contacts the appropriate 
officials are made aware of FmHA programs. The Deans or Chairpersons of 
the various departments as well as Board members and Presidents should 
be furnished information that explains FmHA programs.
    We must continue our commitment to the policy as exemplified in EO 
12320. Our efforts to date have only been the beginning of a continuing 
emphasis. We are striving to develop a dynamic, substantive, ongoing 
program that will have mutual benefit to the HBCU's and FmHA. Your 
support and actions are vital and I am sure that your contribution will 
be substantial.


Charles W. Shuman,
Administrator.
Visiting Professor Program
I. Hiring Authority
  A.  One temporary part-time employee

  B.  Period is for 1 year

  C.  Workday equivalent--120 days

  D.  Salary--$30,549 annually (Full-Time Figure) paid bi-weekly

  E.  Headquartered at Petersburg County Office

  F.  Appointment non-competitive
II. Work Requirements
  A.  Major Duties and Responsibilities (Exhibit A)

  B.  Normal weekly Tour of Duty will be Monday thru Friday, 8:00 a.m. 
            to 4:30 p.m.

  C.  Exception will be made for specific scheduling of Night Meetings 
            as well as weekend meetings with farmers.

  D.  Specific duties will be assigned upon entrance on duty.
III. Job Criteria
  A.  Employed by an 1890 Land-Grant Institution

  B.  Teaching experience in Agriculture. Preference given to Agri-
            Business and Agri-Finance.

  C.  Must acquire basic knowledge of FmHA program objectives, 
            regulations and policies.

  D.  Understanding of financial practices, tax laws, legal structure, 
            realty laws and record keeping.
IV. Supervisory Controls
  A.  General supervision of State Director.

  B.  Day-to-day supervision of District Director.
V. Resources for Job Performance
  A.  Essential supplies available in headquarters office.

  B.  Telephone service

  C.  Travel

      1.  Reimbursement at rate of 20.5 per mile

      2.  Use of GSA vehicle

      3.  Overnight per diem reimbursement
VI. Previous Contact With VSU
  A.  April 1983 with Dr. B.B. Archer--School of Agriculture

  B.  February 7, 1984 with Dr. Archer

  C.  Letter dated February 23, 1984 (Exhibit B)
VII. Specific Duties
  A.  Thoroughly research FmHA farm programs and procedures in order to 
            obtain an in-depth understanding of the Agency.

  B.  To investigate and analyze the farming operations of Black owned 
            farms in Virginia.

  C.  Compare the loss of Black farmers in Virginia to other states 
            with significant Black population and ownership of farms.

  D.  Identify steps which could be taken to reduce the loss of Black 
            owned farms in Virginia under existing FmHA and other USDA 
            programs.

  E.  Determine the extent that Limited Resource Loans are made by FmHA 
            to deter the loss of Black farm ownership.

  F.  Recommend program changes or new programs which would accomplish 
            the objective of saving Black owned farms.
Agricultural Mgmt. Specialist
GS-475-12
A. Introduction
    This position is located in the Farmers Home Administration, 
District Office. The incumbent of this position serves as an advisor to 
the State Director in matters concerning Black-owned farms. The 
incumbent will strive to improve operation of the Black-owned farms and 
will strive to establish a closer rapport with the 1890 Land-Grant 
Institutions.
B. Major Duties and Responsibilities
   Explores alternatives and prepares analytical materials and 
        collects documentation necessary for final action by State 
        Director.

   Identifies and evaluates options to increase income on small 
        farm operations and identifies and evaluates current enterprise 
        combinations and practices utilized by small farm operators.

   Determines the level of knowledge and utilization of 
        services of selected public and private farm-related 
        organizations and attitudes toward use of these services by 
        small farmers.

   Identifies resources--their availability and accessibility 
        to small farmers.

   Conducts studies to determine the extent off-farm income 
        among small farmers that contributes to the total family income 
        and farming operations.

   Evaluates and describes marketing channels utilized by small 
        farm operators and reports to State Director facts found.

   Analyzes field program activity reports to determine trends 
        or detect weaknesses and recommends measures or prepares 
        materials to remedy conditions noted and informs State Director 
        of same.

   Informs and advises the general public and special interest 
        groups about available agricultural and other rural credit 
        assistance.

   Formulates the quality and level of available labor and the 
        timing of off-farm employment on the selection of farming 
        enterprises.

   Prepares reports and submits to State Director on items such 
        as:

    1.  Recommend program changes or new programs which would 
            accomplish the 
              objective of saving the Black-owned farm.

    2.  Identify steps which could be taken to reduce the loss of 
            Black-owned farms 
              under existing FmHA and other USDA programs.

    3.  Compare the loss of Black farmers to the situation in other 
            states with sig-
              nificant Black population and Black ownership of farms.

  4.  Investigate and analyze the farming operations of Black-owned 
            farms in Virginia.
Factor 1. Knowledge Required of the Position
    Position requires a comprehensive knowledge of problems related to 
farming practices in the rural areas. Must have or obtain a basic 
knowledge of FmHA program objectives, regulations, and policies, and an 
understanding of financial practices, tax laws, and legal structures, 
and the state and local realty laws. Must have the ability to evaluate 
and analyze techniques to effectively assess small farming operations.
Factor 2. Supervisory Controls
    Incumbent works under the general supervision of the State 
Director, working closely with other State Office program officials and 
day-to-day supervision of the District Director. The employee is 
assigned duties in terms of objectives, general ground rules, but must 
plan and carry out specific duties on personal initiative. The broad 
scope of duties requires an ability to determine the proper priority of 
each of the tasks to be performed. Because of constant travel and type 
of work to be done, supervision is extremely limited.
Factor 3. Guidelines
    Guidelines in the form of FmHA Instruction and policy are available 
(also assistance of District Director or other FmHA employees), but 
considerable judgment is required in applying them to a variety of 
financial entities--no two of which are comparable--involving loans for 
farming. Follows National and State Office administration and 
management instructions in assessing rural needs and operations and 
regulating corrective procedures.
Factor 4. Complexity
    Complexity of this position rests with developing program 
objectives, and for exercising broad program evaluation. Extensive 
coordination and joint planning contacts with other governmental 
agencies and public groups to develop program activities are required.
Factor 5. Scope and Effect
    Programs administered involve the physical and economic well being 
of a substantial population of the small community and rural segment of 
the State.
Factor 6. Personal Contacts
    Contacts are with borrowers, prospective borrowers, attorneys, 
representatives of other lending organizations, and with management 
officials of Farmers Home Administration, etc.
Factor 7. Purpose of Contacts
    Contacts are for the purpose of amassing data and/or explaining 
program requirements; to assess rural needs, to report deficiencies or 
problems encountered; and to ascertain or give information concerning 
FmHA function.
Factor 8. Physical Demands
    The work requires some physical exertion; walking over uneven, 
rough, maybe rocky surfaces, but mostly work can be accomplished in an 
office setting. No special physical demands are required to do the job.
Factor 9.
    The work environment involves everyday risks or discomforts which 
require normal safety precautions typical of such places as office, 
meeting rooms, and residences or commercial vehicles. The office area 
is adequately lighted, heated, and ventilated.

February 23, 1984

  Dr. B.B. Archer,
  Dean, School of Agriculture & Applied Sciences,
  Virginia State University,
  Petersburg, Virginia

    Dear Dr. Archer:

    I have been advised that you met with Mr. Herman Lundy, Farmer 
Programs Specialist of my staff on Tuesday, February 7, 1984 to discuss 
President Reagan's Executive Order #12320 instructing Federal Agencies 
to increase the percentage share of program funds allocated to 
Historically Black Colleges and Universities. As a result of this 
order, the administrator of our agency subsequently established the 
visiting Professor's Program of which we are very much interested. We 
highly appreciate your interest in this program and encourage your 
school to participate. Mr. Lundy is currently working on the expected 
major duties and responsibilities for this job position. As soon as 
this is completed, we will be interested in employing on a temporary 
part-time basis one of your professors.
    Please continue to consider our program in search for a professor 
with a strong agricultural background that could spend a few hours on a 
weekly basis to serve us in an advisory capacity. Mr. Lundy will be 
contacting you on a regular basis to carry out our employment goal.
    If you have questions or comments concerning this, please feel free 
to contact Herman directly at [Redacted].
            Sincerley yours,
Roie M. Godsey,
State Director.

CC:

Dr. Willbert Greenfield
Mr. Steve Klink
                            Submission No. 4
United States Department of Agriculture
Settlement Agreement
Discrimination Complaint of John W. Boyd, Jr.
    This settlement agreement is made by and between the complainant, 
John W. Boyd, Jr., and the United States Department of Agriculture 
(``USDA''). This agreement constitutes a full, complete, and final 
settlement of all claims for relief in connection with the complaint of 
racial discrimination submitted by the complainant on February 18, 
1992, and USDA's final decision on such complaint dated October 11, 
1996, (attached to this agreement)).

  I.  USDA agrees to:

    1.  Pay the complainant the sum of [Redacted] in compensatory 
            damages. A 
              check in this amount payable to the complainant and 
            Clarence N. Jenkins,
               Jr., Esq., will be issued as soon as practicable but no 
            later than 60 days 
              after this agreement has been signed by all parties.

    2.  Pay any and all of John W. Boyd, Jr.'s unpaid outstanding debt 
            owed to the 
              Farm Service Agency, former Farmers Home Administration, 
            and the Rural 
              Housing Service. USDA, the Farm Service Agency, and Rural 
            Housing 
              Service, will forever discharge, hold harmless, and 
            indemnify John W. Boyd, 
              Jr. from any liability for such debt.

  II.  Complainant agrees to:

    1.  Accept the above payment of compensatory damages, and debt 
            forgiveness 
              as a full, final, and complete settlement of all claims 
            in connection with his 
              February 18, 1992, discrimination complaint and USDA's 
            final decision 
              dated October 11, 1996.

    2.  Waive and release any and all claims or complaints of any kind 
            arising out 
              of the events that were the subject of the complainant's 
            February 18, 1992, 
              discrimination complaint and USDA's final decision dated 
            October 11, 1996, 
              against USDA, the United States of America, and any other 
            agency of the 
              United States of America, or any officer, employee, or 
            agent of the United 
              States of America, in either his or her official or 
            individual capacity.

  III.  Both parties agree that the fact that this complaint was 
            resolved by this agreement may be disclosed by either party 
            to any person not a party. However, except as otherwise 
            required by law, terms of this agreement set out in 
            paragraphs I and II will not be disclosed by either party, 
            without the consent of the other party, to any person not a 
            party except as necessary for that person to perform his 
            official governmental duties.
            
            

 
 
 
Ira L. Hobbs,                                                    5/20/97
Director, Office of Operations,                                     Date
United States Department of Agriculture
 




 
 
 
John W. Boyd, Jr.,                                               5/20/97
Complainant                                                         Date
 

                                                             
                                                             

 
 
 
Clarence N. Jenkins, Jr.,                                        5/20/97
Attorney for the Complainant                                        Date
 

                            Submission No. 5
United States Department of Agriculture
Office of Civil Rights
Statute of Limitations
Program Complaint Division
  Complainant: John W. Boyd, Jr., [Redacted], Baskerville, VA, 
            [Redacted]
  Representative: Darlene Smith, [Redacted]
  County: Mecklenburg County, Virginia
  Docket Number: 27
  Basis: Race (Black) and Age (24)
  Issue(s): Treatment and denial of loan
  Agency(ies): Farm Service Agency (FSA), Rural Housing Service (RS)
  Date of Complaint: April 20, 1990
Summary of Facts
    Letter from John Boyd to Otis Daily, FSA District Director, dated 
April 20, 1990 stated he was a 24 year old African-American male that 
had been discriminated against by James Garnett, FSA County Supervisor. 
Boyd stated that the previous week before the dated letter. Garnett 
threw his applications for a home repair loan and farm ownership loan 
(300 acres and nursery swine operation) into the trash can and told him 
that was too much operation for a boy his age. Boyd also stated that 
Garnett told him to apply for government subsidized housing in South 
Hill, Virginia because it would be cheaper than making repairs to his 
old house.
    Ava Marshall, RHS employee in the Virginia State Office who 
initially investigated Boyd's discrimination complaint made the 
following statements via telephone on July 14, 1999 at 10:00 a.m.: 
Marshall stated that Boyd had filed his complaint timely and had 
continued to complain about discrimination by Garnett. Marshall stated 
that Boyd filed a complaint and made mention of the fact that he had 
been complaining with no result. Marshall stated Boyd had kept a copy 
of the letter that he had given Daily pertaining to the way Garnett had 
treated him. Marshall stated while conducting the investigation she 
found out that Daily had the complaint that Boyd had filed, but failed 
to forward the complaint to the state office. Marshall stated the 
complaints were treated as one, not two complaints.
    Boyd stated he had made numerous telephone calls to the Chief of 
Programs Complaints Adjudication Division about his two complaints and 
had not received any response (referenced from letter on file, dated 
Sep1ember 16. 1996).
    There were no copies of the 1990 loan request in the file and the 
agencies were not able to provide any explanation (referenced from the 
Background of the complainant).
    Garnett stated he did not get paid to do outreach, he got paid to 
make loans and that's was what be did. Garnett also stated that there 
were not many minority farmers, because agriculture does not appeal to 
them; and that they were mainly looking for a job with a pay check 
every Friday (referenced from statement Garnett provided during the 
investigation).
    Four out of five Black farmers interviewed stated that the county 
supervisor was biased to Blacks (referenced from interviews of Black 
farmers during the investigation).
    On February 18, 1993 the State Civil Right's Coordinator found that 
the County Supervisor had a bias toward Blacks (referenced from the 
Chronology of Events--John W. Boyd, Jr.).
    Garnett was asked to accept an early retirement rather than be 
disciplined for his failure to promote EO activities and the fact that 
other similar discrimination cases had been discovered in the County 
Office (referenced from the summary of file review).
    The Farm Program Chief determined Boyd's case had not been properly 
handled (referenced from Exhibit G of a loan review report conducted by 
the Chief of Farm Program).
    County Supervisor documented information pertaining to Boyd 
obtaining a Carroll's Food Contract (referenced from a field visit 
report conducted by the county supervisor).
Reference List *
---------------------------------------------------------------------------
    * Editor's note: the entries that are italicized were not included 
in the submission received from Mr. Boyd. The document has reproduced 
herein as received.
---------------------------------------------------------------------------
John W. Boyd, Jr.
Statute of Limitations
Docket Number 27

 
 
 
        1    Letter from complainant, dated April 20, 1990 establishing
              date of complaint
        2    Letter from complainant, dated September 16, [1]996
              inquiring about two complaints
        3    Background of complaint
        4    Statement of County Supervisor, Garnett
        5    Interviews of Black farmers conducted during the
              investigation
        6    Chronology of Events--John W. Boyd, Jr.
        7    Summary of file review
        8    Exhibit G of a loan review report conducted by the Chief of
              Farm Programs
        9    Field visit report conducted by the county supervisor
 
X Denotes the applicable section of the referenced document.









                            Submission No. 6
February 27, 2019

  U.S. Department of Agriculture
  Attention: Deputy Assistant Secretary Naomi Earp
  Office of the Assistant Secretary for Civil Rights
  Washington, DC

  RE: Formal Complaint of Discrimination Based on African American Race

    Dear Ms. Earp:

    I am writing an official letter of complaint in response to the 
failure of the United States Department of Agriculture (USDA) to comply 
with the terms of debt forgiveness as stated in my USDA Settlement 
Agreement dated May 20, 1997 which was approved and signed by Ira 
Hobbs, Director, Office of Operations, United States Department of 
Agriculture; John W. Boyd, Jr., Complainant and Clarence Jenkins, 
Attorney for the Complainant.
    On February 25, 2019, I received an email from Mrs. Ruby L. Martin 
at Hawthorne & Hawthorne Law Firm detailing numerous current USDA liens 
filed against me and my farm property. She stated that all USDA liens 
would need to be paid and removed prior to my March 22, 2019 closing 
date to purchase a $3,000,000 farm in Mecklenburg County, VA. On 
February 27, 2019, I visited the Mecklenburg County USDA Service Center 
in Boydton, VA. My wife Kara D. Boyd and I met with Evan Harver in the 
USDA Farm Service Agency (FSA) Loan Office as evidenced by my receipt 
of service. Mr. Harver researched my farm loan files and in those files 
he found six (6) Certificates of Satisfaction pertaining to USDA liens 
that had been prepared but never signed, dated, notarized and/or filed 
by USDA with the Clerk of Court, Mecklenburg County, Virginia. I 
believe those certificates were prepared in 1997 in accordance to the 
aforementioned USDA Settlement Agreement based upon the fact all the 
certificates have the identical language as follows: ``AUTHORIZED FSA 
OFFICIAL (Note Holder) ANNE J. RICKMAN, Agriculture Credit Manager'', 
``Subscribed, sworn to and acknowledged before me by Anne J. Rickman 
this ___ day of _______, 1997.'' and ``My commission expires: 5/31/
1998.'' In addition, the USDA failed to provide a farm in inventory as 
stipulated in my USDA Statue of Limitations Agreement.
    I believe that this is a clear case of retaliation, breach of 
agreement and racial discrimination against an African American farmer 
for the following reasons:

  1.  My racial discrimination complaint and case against the USDA was 
            one of the 1st in US History. At that time many of the 
            African American and other minority farmers' racial 
            discrimination cases were barred by the two (2) year statue 
            of limitations. Also during that time there was not 
            functioning USDA Office of Civil Rights. I advocated in 
            Congress for the position--Assistant Secretary Office of 
            Civil Rights. I worked to put those things in place.

  2.  I led the fight for African American Farmers as well as helped 
            with Native American, Women and Hispanic farmers' 
            complaints and cases of racial discrimination filed against 
            USDA.

  3.  On Dec. 8, 2010, President Obama signed into law a bill that I 
            authored paving the way for the largest civil rights 
            settlement in history for African Americans $1.25 Billion.

    Now 22 years later (1997-2019), I have been notified of the liens 
the USDA failed to remove as stipulated in Section II paragraph 2 of 
the aforementioned USDA Settlement Agreement.
    I am requesting an immediate investigation and speedy resolution in 
this matter. Thank you in advance for your assistance.
            Sincerely,
            
            
John W. Boyd, Jr.
                            Submission No. 7






                            Submission No. 8

 
 
------------------------------------------------------------------------
    United States Department of Agriculture, Office of the Assistant
                       Secretary for Civil Rights
------------------------------------------------------------------------
John W. Boyd, Jr.,
Complainant
v.                                   Program Complaint No.: FSA-19-8204
Sonny Perdue,
Secretary,
Department of Agriculture
Agency

Final Agency Decision on Allegations of Noncompliance
I. Introduction
    Pursuant to the Alternative Dispute Resolution Act of 1996 (Public 
Law 104-320), and the United States Department of Agriculture (USDA) 
implementing regulation, Departmental Regulation (DR) 4330-003,\1\ the 
Office of the Assistant Secretary for Civil Rights (OASCR) hereby 
renders the following determination on the Complainant's allegation of 
noncompliance with his Settlement Agreement (SA) dated November 19, 
1999.
---------------------------------------------------------------------------
    \1\ DR 4330-003, paragraphs 7(j) and 7(j)(2) states that OASCR is 
responsible for monitoring implementation of SAs and ensuring 
compliance with their terms and conditions. If the complainant believes 
that an agency has failed to comply with the terms of the SA, the 
complainant shall notify OASCR, in writing, of the alleged 
noncompliance within 30 days of when the complainant knew or should 
have known of the alleged non-compliance.
---------------------------------------------------------------------------
II. Issue Presented
    Whether Farm Service Agency (FSA) officials violated the SA when 
they failed to provide Complainant a farm in USDA inventory property 
from July 18, 2018 to February 1, 2019.
III. Procedural History
  Date of Settlement Agreement: November 19, 1999
  Date(s) of Alleged Noncompliance: July 18, 2018-February 1, 2019
  Date of Complaint: February 27, 2019
  Date of Acceptance: April 15, 2019
  Dates of Investigation: July 29, 2019-August 1, 2019
  Date of Report of Investigation: October 9, 2019
IV. Statement of Facts
    The USDA Rural Development/Farm Services Agency (USDA-RD/FSA) 
resale web site provides current information about single-family homes, 
multifamily homes, farms, and ranches for sale by the U.S. Federal 
Government. The website was designed to provide information regarding 
properties owned by the government for public sale. These previously 
owned properties are for sale by public auction or other method 
depending on the property. The properties are located throughout the 
United States including our Commonwealths and Territories in the 
Pacific and the Caribbean. After finding a USDA-RD/FSA home or farm 
property of interest on the resale web site, individuals are to contact 
their local RD or FSA servicing office to obtain the most current and 
accurate information regarding the status of the home/farm property, 
and to determine eligibility for potential program benefits. Depending 
on individual's circumstances and the status of the property listed, 
the method of bidding and ultimate purchase of property may vary.\2\
---------------------------------------------------------------------------
    \2\ For more information about USDA-RD/FSA properties, see: https:/
/properties.sc.egov.usda.gov/resales/public/home.
---------------------------------------------------------------------------
    Complainant resides in and is a farmer in Mecklenburg County, 
Virginia. Since 1984, Complainant has participated in FSA's Farm Loan 
Programs and has been approved for and received farm ownership and 
operating loans. A review of Complainant's complaint history shows, he 
has filed several program discrimination complaints related to his FSA 
loans over the years, which eventually resulted in two Settlement 
Agreements (SA) which were executed on May 20, 1997, and November 19, 
1999. (ROI, pg. 5)
    On November 19, 1999, Complainant and USDA entered into a SA based 
on all claims of Complainant's 1990 discrimination complaints.\3\ The 
SA required USDA provide Complainant with priority consideration, on a 
one-time basis for the purchase, lease, or other acquisition of 
inventory property located in the Commonwealth of Virginia. The SA also 
stated Complainant must exercise his right to such priority 
consideration in writing and within 5 years of the date the SA was 
signed. (ROI, pgs. 214-216)
---------------------------------------------------------------------------
    \3\ Due to age, we do not have access to Complainant's complaints 
filed in the 1990's against USDA.
---------------------------------------------------------------------------
    On July 18, 2018, Complainant emailed the Farm Loan Manager (FLM) 
(race: White) in FSA's Siskiyou County, California office, requesting 
additional information on a property listed on FSA's inventory property 
website. (ROI, pg. 326)
    On July 24, 2018, the FLM responded to Complainant's email inquiry 
with a phone call. During the call, the FLM provided Complainant with 
general information on the property in Lassen County, California and a 
general outline of the sale process. Also, the FLM added Complainant's 
name and email address to the distribution list to ensure he received 
the notice of sale of property once it was published. (ROI, pgs. 325, 
306-307)
    On the same day, Complainant emailed the FLM requesting physical 
address and name of previous owner for the California property he was 
interested in. (ROI, pg. 324)
    On July 27, 2018, the FLM responded to Complainant's email by 
stating she did not have access to a physical address. The FLM 
recommended Complainant contact the County Assessor. Also, the FLM 
expressed she would try and find out information and let Complainant 
know if she could locate the physical address. (ROI, pg. 324)
    On February 26, 2019, Complainant visited the Mecklenburg County 
FSA office and received assistance from the Farm Loan Officer (FLO) on 
outstanding Farmers Home Administration liens on his properties. (ROI, 
pgs. 239-240)
    On February 27, 2019, Complainant filed a program discrimination 
complaint against FSA.\4\ (ROI, pgs. 13-17)
---------------------------------------------------------------------------
    \4\ Complaint # 19-8204.
---------------------------------------------------------------------------
    On March 11, 2019, Complainant emailed the FLM to see if she had 
found any additional information regarding the property of interest. 
(ROI, pg. 323)
    On August 25, 2019, Complainant emailed the FLM again to see if she 
had found any additional information regarding the property of 
interest. (ROI, pg. 331)
    On September 6, 2019, the FLM responded to Complainant's email by 
informing him that property he was interested in was still in the FSA 
inventory. According to the FLM, FSA was still working through the 
steps to prepare the property for sale as a surplus property. (ROI, pg. 
323)
V. Applicable Legal Standards
    A settlement agreement is a contract, and its construction is a 
question of law. See Lary v. U.S. Postal Serv., 472 F.3d 1363, 1367 
(Fed. Cir. 2006). As such, the formation, construction, and 
enforceability of a settlement agreement are governed by contract law. 
Carr v. Runyan, 89 F.3d 327, 331 (7th Cir. 1996). Therefore, in order 
for a complainant to prevail, he/she must show material noncompliance 
with the terms of the settlement agreement. See Gilbert v. Dep't of 
Justice, 334 F.3d 1065, 1071 (Fed. Cir. 2003) (``A party breaches a 
contract when it is in material noncompliance with the terms of the 
contract.'')
    ``A breach is material when it relates to a matter of vital 
importance, or goes to the essence of the contract.'' Thomas v. Dep't 
of Housing & Urban Dev., 124 F.3d 1439, 1442 (Fed. Cir. 1997); 
Restatement (2d) of Contracts  241 (1981) (A material breach is one 
that will, or may, defeat the object or underlying purpose of the 
contract.). A purely technical and immaterial breach of a contractual 
obligation will generally be insufficient to warrant contract 
rescission. See, e.g., Sahadi v. Continental Illinois Nat. Bank and 
Trust Co. of Chicago, 706 F.2d 193, 196-198 & n. 2 (7th Cir. 1983) 
Restatement (2d) of Contracts  231-60 (1981) (A minor breach will not 
generally give rise to a cause of action on the entire contract).
    A determination as to whether a breach is material ``is a 
complicated question of fact, involving an inquiry into such matters as 
whether the breach worked to defeat the bargained-for objective of the 
parties or caused disproportionate prejudice to the nonbreaching party, 
[and] whether custom and usage considers such a breach to be 
material.'' Sahadi, 706 F.2d at 196. These factors, however, do not 
detract from the fundamental materiality inquiry: whether the parties 
would have entered into the contract without the particular provision 
at issue. Id. at 714; see also Francorp, Inc. v. Siebert, 126 F. Supp. 
2d 543, 547 (N.D. Ill. 2000) (``The materiality of a breach depends on 
the `inherent justice of the matter,' and on whether the matter, in 
respect to which the failure of performance occurs, is of such a nature 
and of such importance that the contract would not have been made 
without it.'') In cases involving allegations of breach of a settlement 
agreement, the burden is always placed on the party alleging breach to 
establish that a breach has occurred. Porter v. United States Postal 
Service, EEOC Appeal No. 01A54699 (December 20, 2005).
    A breach of contract claim requires two components: (1) an 
obligation or duty arising out of the contract and (2) factual 
allegations sufficient to support the conclusion that there has been a 
breach of the identified contractual duty. San Antonio Housing Auth. v. 
United States, 143 Fed. Cl. 425, 470 (2019)[.]
VI. Findings and Conclusion
Priority Consideration for Inventory Property
    On November 19, 1999, USDA and Complainant entered into a SA for 
the purpose of resolving Complainant's program discrimination claims 
through a mutually acceptable voluntary agreement. Per the SA, USDA 
agreed to provide Complainant with priority consideration, on a one-
time basis for the purchase, lease, or other acquisition of inventory 
property in the Commonwealth of Virginia. The SA required Complainant 
to exercise this right to such priority consideration in writing and 
within 5 years of the date of the signed SA.
    Complainant asserts he searched FSA's property inventory website, 
but the information available was always out of date. Also, Complainant 
states he emailed FSA's Outreach Director and the point of contact for 
FSA's inventory property. However, Complainant noted his emails were 
never responded to in a timely manner. Complainant asserts he requested 
an extension from USDA officials of the 5 year priority property 
consideration stipulated in the SA. Complainant noted USDA's Assistant 
Secretary for Civil Rights advised him to continue his ongoing efforts 
to request a farm out of the inventory and contact FSA. (ROI, pg. 103) 
We note Complainant did not provide any specific details or evidence 
regarding his efforts to exercise his right to priority consideration 
for an FSA inventory property. Despite his assertions, Complainant's 
current allegation does not support a finding of FSA's material 
noncompliance with the terms of the SA.
    According to the FLM, Complainant contacted her about a Lassen 
County, California property listed in FSA's inventory website on July 
18, 2018. On July 24, 2018, the FLM responded to Complainant by 
providing him with general information about the property and an 
outline of the sale process. In addition, the FLM emailed Complainant 
maps of the property location and added him to FSA's distribution list 
to ensure he received the Notice of Sale once published. On the same 
day, Complainant sent a subsequent email requesting the physical 
address of the property. On July 27, 2018, the FLM informed Complainant 
she was unable to locate a specific address for property and referred 
him to the County Assessor's office for additional information. The FLM 
explained the property remained in FSA's inventory, and Complainant was 
to be notified once a Notice of Sale was prepared and published. (ROI, 
pgs. 118, 313, 323-324)
    The Mecklenburg County FLO stated he had no knowledge of 
Complainant's request for inventory property and was not aware of any 
other FSA personnel who may have assisted Complainant with his request. 
According to the FLO, the process for requesting or purchasing FSA 
inventory property can be found in Part 21 of the FSA Handbook 5-FLP. 
Additionally, the FLO indicated no real estate inventory property was 
available between July 18, 2018 and February 2019 for the Mecklenburg 
FSA Farm Loan Program office. (ROI, pgs. 242-243)
    FSA Handbook 5-FLP Part 21 states when FSA acquires inventory 
property and the authorized agency official confirms that the property 
satisfies the applicable general policies, the authorized agency 
official initiates the sale of the property. For most inventory 
property, the authorized agency official must begin advertising the 
property for sale within 15 calendar days of title acquisition. FSA 
offers inventory property to beginning farmers or socially 
disadvantaged farmers before considering sale of the property to the 
general public.\5\
---------------------------------------------------------------------------
    \5\ For more information on the sale of FSA's inventory property, 
see: https://www.fsa.usda.gov/Internet/FSA_File/5-flp.pdf.
---------------------------------------------------------------------------
    While we agree Complainant was entitled to priority consideration 
to USDA's property inventory, he did not utilize the benefit within the 
timeframe and region covered by the SA. According to the SA, 
Complainant was required to exercise his right to such priority 
consideration in the Commonwealth of Virginia within 5 years of the 
date the SA was signed. The SA between USDA and Complainant was signed 
on November 19, 1999. As such, Complainant would have had until 
November 19, 2004, to exercise his entitlement to priority 
consideration. However, Complainant was seeking priority consideration 
on July 18, 2018, well outside of the allotted timeframe set by the SA. 
Complainant noted he attempted to obtain an extension of the 5 year 
timeframe. However, nothing in the record shows the Agency approved his 
extension request. Additionally, the SA stipulated Complainant would 
have priority consideration for FSA properties in Virginia. The 
property in question associated with the instant allegation of breach 
of settlement was in California.
    The compromise of any matter is valid and binding, not because it 
is the settlement of a valid claim, but because it is the settlement of 
a controversy. Weade v. Weade, 153 Va. 540, 150 S.E. 238 (1929) Here, 
after the agreement was executed, the Agency was under no obligation to 
enlarge the timeframes or geographic areas because Complainant did not 
exercise his priority consideration as specified in the SA. Therefore, 
we find there was no material breach of contract.
Conclusion
    Based on our review of the record and the documentation submitted 
by FSA and the Complainant, we conclude that the FSA complied with the 
terms of the Settlement Agreement.
    No person shall be subject to reprisal or harassment for filing a 
discrimination complaint against USDA; participating in or contributing 
to the identification, investigation, prosecution, or resolution of 
civil rights violations by an agency of USDA or by a recipient of 
Federal financial assistance from USDA; or otherwise aiding or 
supporting the enforcement of civil rights laws, rules, regulations or 
policies applicable to USDA programs.



 
 
 
Cinnamon L. Butler,                                               2/3/20
Director, Program Adjudication Division                             Date
Center for Civil Rights Enforcement
 

                            Submission No. 9

 
 
------------------------------------------------------------------------
    United States Department of Agriculture, Office of the Assistant
                       Secretary for Civil Rights
------------------------------------------------------------------------
John W. Boyd, Jr.,
Complainant
v.                                   Program Complaint No.: FSA-19-8204
Sonny Perdue,
Secretary,
Department of Agriculture
Agency

Final Agency Decision
I. Introduction
    In accordance with 7 CFR Part 15d, this is the final determination 
of the United States Department of Agriculture (USDA) on this 
complaint.
II. Issue Presented
    Whether Farm Service Agency (FSA) officials discriminated against 
Complainant on the bases of race (African American) and retaliation 
(prior civil rights activity) when on February 25, 2019:

  1.  They informed Complainant that USDA liens remained on his 
            property; \1\
---------------------------------------------------------------------------
    \1\ We note the accepted issue is misstated. The record reveals 
Complainant discovered the alleged remaining FSA liens from a third-
party, not FSA officials.

  2.  They failed to forgive all Complainant's USDA farm debt; \2\ and
---------------------------------------------------------------------------
    \2\ Issue #2 was not originally a part of the issues established by 
the complaint and/or OASCR's acceptance letter. However, due to an 
email clarifying Complainant's claims, issue #2 has been added to the 
instant discrimination complaint. (ROI, pg. 35-36)

  3.  From July 18, 2018 to February 1, 2019, they failed to provide 
            Complainant a farm in USDA inventory property as stipulated 
            in his settlement agreement.
III. Procedural History
  Date of Alleged Discriminatory Act: February 25, 2019, July 18, 2018, 
    February 1, 2019
  Date Complaint Filed: February 27, 2019
  Date of Acceptance: April 15, 2019
  Dates of Investigation: July 29, 2019-August 1, 2019
  Date of Report of Investigation: October 9, 2019
IV. Statement of Facts
    The U.S. Department of Agriculture's Farm Service Agency (FSA) 
offers direct and guaranteed loans to farmers and ranchers to promote, 
build, and sustain family farms for a thriving agricultural economy. 
FSA offers a variety of loans to provide additional resources farmers 
need to establish and maintain profitable farming operations. FSA's 
Direct Loan Program is designed to help farmers start, purchase, or 
expand their farming operation. From beginning farmers who have limited 
financial history to qualify for commercial credit to farmers who have 
suffered financial setbacks from natural disasters, FSA's Farm 
Ownership Loans may be used to purchase a farm, enlarge an existing 
farm, construct new farm buildings and/or improve structures, pay 
closing costs, and promote soil and water conservation and 
protection.\3\
---------------------------------------------------------------------------
    \3\ For more information on FSA's Farm Loan Programs, see: https://
www.fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/FactSheets/2019/farm-
loans-overview.pdf.
---------------------------------------------------------------------------
    Complainant resides and farms in Mecklenburg County, VA. Beginning 
in 1984, Complainant has participated in FSA's Farm Loan programs. 
During this period, Complainant was approved for and received several 
farm ownership and operating loans. In reviewing Complainant's 
complaint history, it shows he has filed numerous program complaints 
related to his FSA loans over the years, which eventually resulted in a 
finding of discrimination. As a result, Settlement Agreements (SAs) 
were executed on May 20, 1997, and November 19, 1999.\4\ Complainant 
also participated in the Black Farmers class action lawsuit, otherwise 
known as Pigford.\5\ The 1997 SA ordered forgiveness of all 
Complainant's FSA loan debt. Complainant thus currently does not have 
any outstanding USDA farm loan program debt. The 1999 SA also ordered 
Complainant be provided priority consideration in obtaining FSA farm 
inventory property. (ROI, pgs. 5, 31-32, 214-216)
---------------------------------------------------------------------------
    \4\ The 1997 SA was based on a discrimination complaint submitted 
by Complainant on February 18, 1992 and USDA's related Final Agency 
Decision issued on October 11, 1996. The 1999 SA applied to all of 
Complainant's 1990 discrimination complaints submitted to USDA. (ROI, 
pgs. 31-32, 214-216)
    \5\ African American farmers successfully sued the USDA alleging 
years of systematic discrimination in administering farm programs in 
violation of the Equal Opportunity Act (ECOA). See Pigford v. Glickman, 
185 F.R.D. 82 (D.D.C. 1999), aff'd, 206 F.3d 1212 (D.C. Cir. 2000).
---------------------------------------------------------------------------
    On July 17, 1997, a Farm Loan Manager (FLM #1) (race: White) sent 
Complainant's attorney six Certificates of Satisfaction and Promissory 
Notes for release. Additionally, FSA forwarded documentation to 
Complainant's attorney which included a Termination Statement for the 
release of the financing statements that were on record with the 
Mecklenburg Clerk's Office. (ROI, pgs. 128, 131-179)
    On July 18, 2018, Complainant emailed FLM #2 (race: White) 
requesting additional information on specific property listed on FSA's 
inventory property website. (ROI, pgs. 325-326)
    On July 24, 2018, FLM #2 responded to Complainant's email inquiry 
with a phone call. During the call, FLM #2 provided Complainant with 
general information on the property he was interested in and a general 
outline of the sale process. Also, FLM #2 added Complainant's name and 
email address to the distribution list to ensure he received the notice 
of sale of the property once it was published. (ROI, pgs. 325, 306-307)
    On the same day, Complainant emailed FLM #2 requesting the physical 
address and name of the previous owner for the subject property. (ROI, 
pg. 324)
    On July 27, 2018, FLM #2 responded to Complainant's email by 
stating she did not have access to the physical address. FLM #2 
recommended Complainant contact the County Assessor. Additionally, FLM 
#2 expressed she would attempt to locate the address and let 
Complainant know the results. (ROI, pg. 324)
    In February 2019, Complainant met with a closing company to make 
final preparation for the purchase of a property.\6\ During the 
meeting, the closing company performed a title search and found 
outstanding liens remained on Complainant's farm. As a result of the 
outstanding liens, Complainant was not able to immediately secure the 
loan he needed to purchase the property at that time. (ROI, pgs. 97-98)
---------------------------------------------------------------------------
    \6\ We note this was not the initial FSA property in which the 
Complainant previously inquired.
---------------------------------------------------------------------------
    On February 26, 2019, Complainant called and visited the 
Mecklenburg County FSA office seeking assistance with outstanding 
Farmers Home Administration liens presumed to be on his property. 
During the visit, the Farm Loan Officer (FLO) (race: White) informed 
Complainant he had located copies of satisfaction documents and could 
reissue them since they were not filed after being provided to 
Complainant's attorney. Additionally, the FLO informed Complainant the 
documents would need to be signed by the Farm Loan Manager and then 
notarized. The FLO informed Complainant that the documents could be 
completed and sent to the closing company within 2 days. (ROI, pgs. 
239-240)
    On the same day, Complainant emailed the FLO requesting copies of 
the promissory notes associated with the satisfaction of deeds of trust 
for his properties. (ROI, pg. 240)
    On February 27, 2019, Complainant filed a complaint with the Office 
of the Assistant Secretary for Civil Rights (OASCR). (ROI, pgs. 13-17)
    On March 11, 2019, Complainant emailed FLM #2 to see if she had 
found anyadditional information on the farm of interest. (ROI, pg. 323)
    On the same day, Complainant emailed FSA's Riverside-San Diego 
County, California County Executive Director (CED) requesting 
additional information on a property in FSA's inventory and the next 
steps in the process. (ROI, pg. 121)
    On April 2, 2019, the CED responded to Complainant's email and 
referred him to two additional FSA contacts for details on the 
property. (ROI, pg. 120)
    On September 6, 2019, FLM #2 responded to Complainant's email by 
informing him that the property of interest was still in the FSA 
inventory. According to FLM #2, FSA was still working through the steps 
to prepare the property for sale as a surplus property. (ROI, pg. 323)
V. Applicable Legal Standards
Discrimination Based on Membership in a Protected Class in Programs 
        Conducted by USDA
    USDA regulation 7 CFR  15d.3(a) provides:

          No agency, officer, or employee of the United States 
        Department of Agriculture shall, on the ground of race, color, 
        religion, sex, age, national origin, marital status, familial 
        status, sexual orientation, or disability, or because all of 
        part of an individual's income is derived from any public 
        assistance program, exclude from participation in, deny the 
        benefits of, or subject to discrimination any person in the 
        United States under any program or activity conducted by the 
        United States Department of Agriculture.

    Reprisal--7 CFR  15d.3(b)

          USDA regulation 7 CFR  15d.3(b) prohibits discrimination on 
        the basis of retaliation in any program or activity conducted 
        by USDA. It is the policy of USDA to follow the framework 
        provided by Title VII of the Civil Rights Act of 1964 to 
        determine a prima facie case of retaliation.
Dismissal
    USDA will close a complaint under the following circumstances:

  a.  Voluntary withdrawal;

  b.  Settlement or voluntary resolution;

  c.  Lack of jurisdiction;

  d.  Failure to state a claim;

  e.  Failure to pursue;

  f.  Failure to file timely;

  g.  Filing in court on the same or essentially similar claims;

  h.  Lack of any further remedies;

  i.  Any other authority provided in law;

  j.  Failure to seek remedy available under the statues, regulation, 
            or court decision;

  k.  Continuation of a pattern of complaints previously filed by the 
            complainant, or someone other than the complainant, that 
            the Office of the Assistant Secretary for Civil Rights or a 
            court of competent jurisdiction already have found to be 
            without merit;

  l.  Dissatisfaction with the processing of a previously filed 
            complaint.\7\
---------------------------------------------------------------------------
    \7\ See Departmental Regulation 4330-003.

---------------------------------------------------------------------------
    Issue #2--Failure to State a Claim

    A dismissal for failure to state a claim is intended to address a 
dispositive issue of law. Under this procedural disposition, the trier-
of-fact does not assess the merit or truthfulness of the allegations or 
the legal theories advanced by Complainant. Rather, the trier-of-fact 
assumes that all facts advanced by Complainant are true. If, under this 
assumption, it is clear that no relief could be granted under any set 
of facts that could be proved consistent with the allegations, the 
complaint must be dismissed for failure to state a claim. See Bell Atl. 
Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 1964-65, 167 L. 
Ed. 2d 929 (2007) (Factual allegations must be enough to raise a right 
to relief above the speculative level.)
    In issue #2, Complainant alleges FSA officials discriminated 
against him based on race, from July 18, 2018 to February 1, 2019, when 
they failed to provide Complainant a farm from FSA's inventory 
property, as stipulated in the terms of the November 19, 1999 SA. We 
find Complainant fails to state a claim because issue #2 is concerned 
solely with what he perceived as FSA's failure to satisfy the terms of 
the SA--not a new adverse action based on race. The SA stipulated 
Complainant be allowed priority consideration for obtaining an FSA farm 
inventory property. Even though this issue will be reviewed under a 
separate breach of SA analysis, we note the terms of the SA established 
a 5 year timeframe for providing priority consideration. The period in 
which Complainant alleges issue #2 occurred is 15 years after the terms 
of the SA expired.
    Furthermore, Complainant does not articulate how his race related 
to his inability to obtain FSA inventory property. According to the 
record, at the time the instant complaint was investigated, the 
property at issue remained in FSA's inventory property and was still 
being prepared for the sale process. As a result, there was not an 
opportunity for Complainant to purchase property. Complainant does not 
allege that the property was unreasonably delayed for sale due to 
discriminatory animus or that other similarly situated buyers of a 
different protected class were given priority, notice, or more 
favorable treatment. Therefore, this issue is dismissed for failure to 
state a claim upon which relief may be granted. (Requirement that 
pleading contain a short or plain statement of claim showing the 
pleader is entitled to relief does not require detailed factual 
allegations but demands more than unadorned the defendant unlawfully 
harmed me accusation.) Ashcroft v. Iqbal, 556, U.S. 662, 129 S. Ct. 
1937, 173 L. Ed. 2d 868 (2009)[.]
VI. Discussion and Analysis
A. Disparate Treatment (Race)
    In evaluating a claim of disparate treatment based on membership in 
a protected class, it is USDA policy to use the shifting analytic 
framework established by the Supreme Court in McDonnell Douglas Corp. 
v. Green, 411 U.S. 792 (1973). The Court has defined disparate 
treatment as situations where an Agency ``simply treats some people 
less favorably than others because of their race, color, religion, sex, 
or other protected characteristic.'' See International Brotherhood of 
Teamsters v. U.S., 431 U.S. 358, 335, n. 15 (1977). Applying the 
McDonnell Douglas principles, the investigating agency must first 
determine if a complainant can raise an inference of discrimination by 
establishing a prima facie case. The elements of a prima facie case may 
vary depending on the facts of the complaint, but often include the 
following:

  (1)  Complainant is a member of a protected class;

  (2)  Complainant applied for and was eligible to receive the benefit 
            sought;

  (3)  Despite Complainant's eligibility, he/she was rejected, referred 
            elsewhere, or otherwise treated differently; and

  (4)  The Agency/Respondent accepted or treated more favorably 
            similarly situated applicants who were not members of the 
            protected class or classes.

See Lawson v. CSX Transp., Inc., 245 F.3d 916 (7th Cir. 2001); 
McDonnell Douglas Corp., 411 U.S. at 802.
    Once a complainant has established a prima facie case for 
discrimination, a rebuttable presumption exists that discrimination has 
occurred, the burden shifts to the Agency to articulate a legitimate 
nondiscriminatory reason for its action(s). See Texas Dept. of 
Community Affairs v. Burdine, 450 U.S. 248, 254 (1981). Once the Agency 
has satisfactorily articulated a legitimate nondiscriminatory reason 
for its actions, the burden shifts back to the complainant to prove, 
that the Agency's legitimate, nondiscriminatory reason is a pretext for 
discrimination. See McDonnell Douglas at 804-05. At all times, 
complainant retains the burden of persuasion that unlawful 
discrimination has occurred. See Burdine at 256.
    In disparate treatment cases, the established order of analysis 
requires a complainant establish a prima facie case of discrimination. 
However, determining the existence of a prima facie case need not be 
followed in all cases. Where the Agency has articulated a legitimate, 
nondiscriminatory reason for the action at issue, the factual inquiry 
can proceed directly to the ultimate issue whether Complainant has 
shown by a preponderance of the evidence that discrimination motivated 
the Agency's actions. See U.S. Postal Service Board of Governors v. 
Aikens, 460 U.S. 711, 713-714 (1983). Here, we will assume, without 
finding, for purposes of analysis, that Complainant established a prima 
facie case of disparate treatment based on race.
    Accordingly, the burden shifts to the Agency to articulate a 
legitimate, nondiscriminatory reason for the actions grieved by 
Complainant.
B. Agency's Legitimate, Nondiscriminatory Reasons
    The only inquiry to determine whether or not the Agency has 
produced evidence to sufficiently articulate a legitimate, 
nondiscriminatory reason is whether the Agency's evidence has frame[d] 
the factual issue with sufficient clarity so that the plaintiff will 
have a full and fair opportunity to demonstrate pretext.'' * See Texas 
Department of Community Affairs v. Burdine, 450 U.S. 255-56 (1981). As 
described below, we find that FSA has articulated a legitimate, 
nondiscriminatory reason for its actions.
---------------------------------------------------------------------------
    * Editor's note: there is no corresponding open quote mark (``) for 
this quotation. It has been reproduced herein as submitted.
---------------------------------------------------------------------------
    FLM #1 stated FSA took proper steps to remove the liens. FLM #1 
asserted she, along with her staff, prepared all the necessary 
documents to remove Complainant's FSA liens. Then, officials sent the 
Certificates of Satisfaction and the Promissory Notes via certified 
mail to Complainant's attorney to have FSA liens removed from the 
record. (ROI, pgs. 231, 234)
    According to the FLM #1, USDA officials did not always go to the 
County Clerk's Office to file or release liens. FLM #1 asserted when 
borrower's loans were closed by attorneys, USDA would send the lien to 
the attorney to file in the County Clerk's Office. FLM #1 further 
explained when Complainant received his USDA loan to purchase the farm, 
the attorney who closed the loan filed the USDA lien in the County 
Clerk's Office. (ROI, pg. 234)
    We find the above is sufficient and the Agency has articulated a 
legitimate, nondiscriminatory reason for its actions. Therefore, the 
burden now shifts to the Complainant to prove, by a preponderance of 
the evidence that these reasons are a mere pretext for unlawful 
discrimination.
C. Pretext
    As the Agency has articulated legitimate, nondiscriminatory reasons 
for its actions, to prevail, the complainant must now prove, but a 
preponderance of the evidence, why these proffered reasons are untrue 
or a more pretext for unlawful discrimination. Burdine at 253. The 
complainant can ``succeed in this either directly by persuading the 
trier of facts that a discriminatory reason more likely motivated the 
agency or indirectly by showing that the agency's proffered explanation 
is unworthy of credence.'' Burdine 256. A complainant can demonstrate 
pretext by exposing such weakness, implausibility, inconsistencies, 
incoherencies, contradictions'' ** in the Agency's reasoning that a 
fact finder could find the Agency's articulated explanation unworthy of 
credence. See Richmond v. ONEOK, Inc. 120 F.3d 205,209 (10th 
Cir.1997)[.]
---------------------------------------------------------------------------
    ** Editor's note: there is no corresponding open quote mark (``) 
for this quotation. It has been reproduced herein as submitted.
---------------------------------------------------------------------------
    Complainant alleges FSA officials failed to forgive all of his USDA 
farm debt. However, we are not persuaded by Complainant's assertions, 
as he has not shown by a preponderance of the evidence that 
discriminatory animus motivated or caused the alleged adverse action.
    It is reasonable to assume that if FSA had not forgiven all of 
Complainant's farm loan debt as indicated in the SA, FSA would have 
made attempts to collect the debt from Complainant at some interval 
over the course of 20 years. Under normal processes, delinquent 
borrowers receive various notifications (i.e., notice of intent to 
accelerate, notice of foreclosure) and demands for payment when they 
are delinquent on their loans. However, USDA's last contact with 
Complainant regarding the subject loans was on July 17, 1997, when FSA 
sent Complainant's attorney the Certificates of Satisfaction and the 
Promissory Notes to release USDA's liens.
    Although 20 years passed before Complainant discovered any issues 
associated with the documentation of the debt forgiveness, the 1997 SA 
clearly established USDA would forever discharge, hold harmless, and 
indemnify Complainant from any liability for his debt at that time. 
(ROI, pgs. 31, 131) We find Complainant's debt had been forgiven by 
USDA, and he has not provided any evidence which demonstrates FSA did 
not forgive his debt based on his race.
    Additionally, the record evidence confirms that Agency officials 
supplied Complainant's attorney with the requisite documentation to 
release USDA liens on Complainant's properties after loans where 
satisfied. The trier of fact is unpersuaded that FLM #1 had intentions 
of not releasing liens based upon race. Rather, it was Complainant's 
responsibility to ensure his representative had filed the appropriate 
paperwork with the County Clerk's Office. Contrary to Complainant's 
assertions, FLM #1's response suggests that she took meaningful steps 
to ensure Complainant's attorney received the documentation needed to 
release liens from public record. Complainant did not provide any 
evidence to substantiate claim of discrimination by FSA officials. 
Absent any operative facts that would lend credence to Complainant's 
allegations, his mere conjecture is insufficient to demonstrate 
pretext. Reed v. Amax Coal Co., 971 F.2d 1295, 1299 (7th Cir. 1992) 
(plaintiff cannot make showing of discrimination through bare 
allegations). Miller v. Auto. Club of KM, Inc., 420 F.3d 1098 (10th 
Cir. 2005) (recognizing unsupported suspicions are insufficient to 
establish discrimination).
Retaliation
    To establish a prima facie case of reprisal discrimination, a 
plaintiff must prove that:

  (1)  Complainant engaged in a protected activity;

  (2)  Agency had knowledge of the protected activity;

  (3)  Complainant subsequently suffered an adverse action; and

  (4)  But for the prior protected activity, the adverse action would 
            not have occurred. University of Texas Southwestern Medical 
            Center v. Nassar, 133 S. Ct. 2517 (2013)[.]

    For the first prong, Complainant must show he engaged in prior 
protected activity. The record shows Complainant filed several civil 
rights complaints regarding his FSA farm loans. Complainant satisfies 
prong #1. (ROI, pg. 5)
    For the second prong, the record sufficiently establishes FSA 
officials had knowledge of Complainant's prior civil rights activities. 
Therefore, Complainant meets the requirements of prong #2.
    Regarding the third prong, Complainant must show he suffered an 
adverse action.\8\ Complainant claims he was retaliated against by FSA 
officials when they failed to remove liens on his farms. In February 
2019, Complainant attempted to purchase a farm. The closing company 
performed a title search on Complainant's properties and informed him 
that FSA liens remained on his farms. As a result, Complainant contends 
he had to negotiate an extension agreement for an additional 30 days to 
secure the prospective loan and purchase the property. The extension 
agreement required Complainant to deposit an additional $25,000 to his 
original deposit of $50,000. As such, Complainant meets the 
requirements of prong #3.
---------------------------------------------------------------------------
    \8\ In the context of a retaliation claim, an action is ``adverse'' 
if it would dissuade a reasonable person from making or supporting a 
charge of discrimination. See Burlington N & Santa Fe Ry. Co. v. White, 
548 U.S. 53, 54 (2006).
---------------------------------------------------------------------------
    Finally, for prong #4, Complainant must show the adverse action 
suffered would not have taken place if it were not for his prior 
protected civil rights activities. The record shows in accordance with 
the May 20, 1997 SA, all of Complainant's debt owed to the Agency was 
forgiven. However, to a reasonable person, the record does not support 
an inference that the recordation of FSA liens on Complainant's farms 
in 2019 was caused by the negotiated SA from 1997.
    It is unclear to the trier of fact who had the ultimate 
responsibility of filing the appropriate paperwork regarding FSA liens 
on Complainant's farms to the Mecklenburg Clerk's Office. The available 
records show delivery of certified mail to Complainant's attorney 
containing six Certificates of Satisfaction and Promissory Notes for 
the release of FSA liens. (ROI, pg. 131). Under the common law of 
agency, the signature of a disclosed, authorized agent has the same 
legal force as the signature of his principal.
    We acknowledge it was a financial burden for Complainant to provide 
additional funding to secure loan because FSA liens remained 
erroneously recorded on his land though the obligation to pay was 
extinguished. However, the Agency's related actions regarding 
Complainant, i.e., discharge of debt, not sending notices of debt owed, 
and immediate assistance when the recording error was discovered, 
weighs against the perception of wrongdoing, negligence, or retaliatory 
motives on the Agency's part. Complainant and/or his attorney bore some 
responsibility to conduct due diligence and ensure the liens were 
released with the Mecklenburg County Clerk's Office. This inaction 
resulted in Complainant having to provide additional funding to secure 
the prospective loan. Considering the above, we conclude Complainant 
does not meet the requirements of prong #4.
    To establish retaliation based on temporal proximity, Complainant 
would have to demonstrate the adverse action was followed closely after 
his protected activity. If we construe his prior protected activity in 
the light most favorable to Complainant, his protected activities 
occurred on May 20, 1997 and November 19, 1999 when the SAs were 
executed. However, Complainant did not discover that liens remained on 
his property until February 2019. Here, almost 20 years elapsed between 
the last protected activity (November 19, 1999) and the alleged adverse 
action (February 2019). In general, a complainant can demonstrate a 
causal connection using temporal proximity alone when the separation 
between the Agency's knowledge of the protected activity and the 
adverse action are very close. Twenty years is a substantial amount of 
time to show a correlation between protected activity and adverse 
action. Additionally, there have been no new allegations of retaliation 
regarding these loans since the November 19, 1999 SA was executed. 
Complainant has not offered any other evidence that would establish 
temporal proximity in his claim of retaliation. See Nguyen v. City of 
Cleveland, 229 F.3d 559 (6th Cir. 2000) (holding that temporal 
proximity alone may be insufficient to raise an inference of 
retaliation in the absence of other evidence of causation).
    We find Complainant has not established a prima facie case of 
retaliation.
VII. Conclusion
    After careful review, and for the reasons set forth previously, 
USDA finds the record does not support a finding of discrimination 
based on retaliation.
    No person shall be subject to reprisal or harassment for filing a 
discrimination complaint against USDA; participating in or contributing 
to the identification, investigation, prosecution, or resolution of 
civil rights violations by an agency of USDA or by a recipient of 
Federal financial assistance from USDA; or otherwise aiding or 
supporting the enforcement of civil rights laws, rules, regulations or 
policies applicable to USDA programs.



 
 
 
Cinnamon L. Butler,                                               2/3/20
Director, Program Adjudication Division                             Date
Center for Civil Rights Enforcement
 


                     U.S. Department of Agriculture
           Office of the Assistant Secretary for Civil Rights
                   Complaint of Program Discrimination
 
 
 
Complainant:                         John W. Boyd, Jr.
Complaint No.:                       FSA-19-8204
Agency:                              Farm Service Agency
 
                         Certificate of Service
 
  I certify that the document listed was sent on this date by certified
 mail (unless otherwise specified) to:
 
Complainant:                         John W. Boyd, Jr.
                                     [Redacted]
                                     [Redacted], Virginia 23915
Agency Head:                         Richard Fordyce (interoffice mail)
                                     Administrator
                                     Farm Service Agency
                                     Room 3096S, South Building
Agency Liaison:                      Emily Su (interoffice mail)
                                     Director, Civil Rights
                                     Farm Production and Conservation
                                     PP III, 12th floor
 

                                     
                                     

 
 
 
Certified by:                        Date
7012 3460 0003 3832 6288
 


    The Chairman. Thank you so much, Mr. Boyd, for your 
excellent testimony.
    And next, we have Mr. Blanding. Please begin your 
testimony.

          STATEMENT OF CORNELIUS BLANDING, EXECUTIVE 
 DIRECTOR, FEDERATION OF SOUTHERN COOPERATIVES/LAND ASSISTANCE 
                      FUND, EAST POINT, GA

    Mr. Blanding. Good afternoon, Mr. Chairman, Madam Vice 
Chair, Mr. Ranking Member, and Members of the Committee. My 
name is Cornelius Blanding, and I am the Executive Director of 
the Federation of Southern Cooperatives/Land Assistance Fund, a 
54 year old cooperative association of Black farmers, 
landowners, and cooperatives from all across the South.
    Founded directly out of the civil rights movement in 1967, 
the Federation is the oldest and largest Black farmer-owned and 
-serving institution in the country. It is also the only 
cooperatively-owned organization of Black farmers, landowners, 
and cooperatives focusing primarily on Black land loss and the 
use of cooperatives as a tool to increase income and build 
wealth in the South, where 80 percent of all Black farmers are 
located.
    I am honored to be before this Committee today, testifying 
on the realities, struggles, and perseverance of Black farmers 
and landowners in the U.S. South. I have submitted my full 
statement to the Committee, which I ask to be made part of the 
hearing record.
    As part of my brief opening statement, I would like to 
thank this Committee again for this opportunity to testify 
before as part of this historic hearing on Black farmers. I 
have served the Federation of Southern Cooperatives and Black 
Farmers for the past 24 years, and as the executive of the 
Federation for the past 6 years.
    We, the Federation of Southern Cooperatives, based on a 
study we did 41 years ago in 1980, entitled, The Impact of Heir 
Property on Black Rural Land Tenure in the Southeastern Region 
of the United States, that was commissioned by Congress and 
funded by the United States Department of Agriculture, and 
based on over 50 years of work, we estimate that approximately 
60 percent of all Black-owned land is heirs property--land that 
lacks a clear title and that the landowner dies without a will 
or estate plan, and is passed down informally to the heirs of 
deceased landowners. It is the reason that I and thousands of 
others in the Black community are not Black landowners or still 
farming today.
    So, you see, this work is personal for me, just like it is 
for other folks testifying on this hearing today, like it is 
for thousands of Black farmers and advocates across this 
country. Heirs property is a civil rights issue. All the 
citizens of our country should have access to government 
services, but because of heirs property, many don't, and for 
decades Black farmers haven't, and this has resulted in Black 
land loss. These are all things that could have been addressed 
with good and reasonable legislation, including the $1.9 
trillion American Rescue Plan of 2021 recently passed by the 
Senate and the House, and signed into law by the President.
    As I mentioned in my opening statement, Mr. Chairman, I am 
here to testify on the realities, struggles, and perseverance 
of Black farmers and landowners. The reality is that Black 
farmers are going out of business and lost the highest 
percentage of land than any other group in this country over 
the past century.
    In 1910, there were 218,000 Black farmers owning roughly 15 
million acres of land. According to the U.S. Census Bureau in 
1992, there were only 18,000 Black farmers owning 2.3 million 
acres of land. That is over a 90 percent loss of Black farmers, 
as well as almost a 90 percent loss of Black-owned land.
    Another reality is that the majority of Black farmers get 
their credit from USDA's Farm Service Agency, the lender of 
last resort, which they are expected to graduate out of that 
system in 7 years, and after that, they are supposed to qualify 
for credit in the traditional market. However, that date never 
comes for most Black farmers. Instead, they are relegated to 
predatory-style lenders at best, and farming out of their 
pockets at worst. No business, especially farming, can survive 
in this reality. The reality is also that Black farmers have 
historically been discriminated against in various ways--
including at USDA, as shown in the historic lawsuit, Pigford v. 
Glickman. These realities have led to the struggles of Black 
farmers, the struggles to hold on to land for generations 
because of unsecure or cloudy titles and discrimination. The 
realities of Black farmers have also led to the struggle to 
successfully operate farms in a sector where they buy in the 
retail market and sell in the wholesale market, primarily 
because of lack of scale. Eighty percent of Black farmers 
operate on 100 acres or less.
    These realities have also led to the struggles to access 
enough fair and equitable credit for farmers to grow their 
business and become part-time--beyond part-time subsistence 
farms. However, these struggles and realities have forced Black 
farmers and landowners to be some of the most resilient people 
in their communities and in this country. Black farmers have 
persevered through the difficult days of sharecropping and the 
long nights of racism and discrimination, and continue to 
persevere in spite of the issues of heirs property, the lack of 
access to fair and equitable credit, and they continue to be on 
the front lines of feeding families, anchoring rural 
communities, and protecting our environment, regardless of 
these realities and struggles.
    The Black farmer's story is of perseverance, and it is 
about time this story is told. It is about time for a hearing 
such as this. It is about time for our country to support those 
that have given so much but receive so little in exchange.
    In closing, Mr. Chairman, I reiterate the Black farmer's 
story is one of struggle and perseverance, and so I end with 
that, Mr. Chairman, but our air, our water, our soil, and our 
lives depend on Black farmers.
    Thank you, Mr. Chairman and Members of this Committee for 
this opportunity to appear before you today. I stand ready for 
any questions you may have.
    Thank you.
    [The prepared statement of Mr. Blanding follows:]

     Prepared Statement of Cornelius Blanding, Executive Director, 
 Federation of Southern Cooperatives/Land Assistance Fund, East Point, 
                                   GA
    Good afternoon, Mr Chairman, Madam Vice Chair, Mr. Ranking Member, 
and Members of the Committee.
    My name is Cornelius Blanding and I'm the Executive Director of the 
Federation of Southern Cooperatives/Land Assistance Fund, a 54 year old 
cooperative association of Black farmers, landowners and cooperatives 
from all across the South.
    Founded directly out of the civil rights movement in 1967, the 
Federation is the oldest and largest Black farmer owned and serving 
institution in the country. It is also the only cooperatively owned 
organization of Black farmers, landowners and cooperatives focusing 
primarily on Black land loss and the use of cooperatives as a tool to 
increase income and build wealth in the South, where 80% of all Black 
farmers are located.
    I am honored to be before this Committee today, testifying on the 
realities, struggles and perseverance of Black farmers & landowners in 
the U.S. South. I have submitted my full statement to the Committee, 
which I ask to be made part of the hearing record.
    As part of my brief opening statement, I would like to thank this 
Committee for this opportunity to testify as part of this historical 
hearing on Black farmers.
    I am not a Black farmer nor do I pretend to speak on behalf of all 
Black farmers. I am merely a servant of the Federation of Southern 
Cooperatives as well as the Black farmer and cooperative movements; 
thus I testify on behalf of our membership, Board of Directors and all 
those who came before me. It is my hope that my testimony is a 
reflection and adequate representation of all those giants who couldn't 
be here today, but are the reasons that I am here.
    I have served the Federation of Southern Cooperatives and Black 
farmers for the past 24 years and as the Executive Director of the 
Federation for the past 6 years.
    I am a son of the South. I was born and raised in the South. I was 
educated in the South. I live and work in the South and I am raising my 
family in the South.
    I am also a product of public housing and public assistance in 
Montgomery, Alabama, the cradle of the Civil Rights Movement. I was 
raised by a single mother in public housing and on public assistance. A 
single mother who was also one of seven heirs to over 40 acres of land 
in rural Lowndes County, Alabama.
    My family was targeted by an unscrupulous lawyer and one of the 
heirs was bought out for pennies on the dollar, which resulted in a 
forced partition sale. Unfortunately, my story is not unique. I am part 
of a common story in the Black community.
    We, the Federation of Southern Cooperatives--based on a study we 
did 41 years ago in 1980, entitled ``The Impact of Heir Property on 
Black Rural Land Tenure in the Southeastern Region of the United 
States'' that was commissioned by Congress and funded by USDA . . . . 
and based on over 50 years of work--estimate that approximately 60% of 
all Black owned land is heirs' property; land that lacks a clear 
title--in that the landowner dies without a will or estate plan and the 
land is informally passed down to the heirs of the deceased land owner.
    With this cloudy or unclear title, called heirs property, the heirs 
or landowners lack the ability to access USDA programs, resources or 
credit; thus putting the land in a vulnerable position. In fact, heirs' 
property is one the major reasons for Black land loss.
    It is the reason my mother and her siblings lost 40 acres of land 
in rural Lowndes County, Alabama, and it is part of the reason my 
mother was forced to raise me, my brother and sister in public housing 
on public assistance about 30 miles east in the more urban city of 
Montgomery, Alabama.
    It is the reason that I and thousands of others in the Black 
community are not Black landowners or still farming today. So you see, 
this work is personal for me, just like it is for the other folks 
testifying here today; and like it is for thousands of Black farmers 
and advocates across this country.
    Heirs' property is a Civil Rights issue. All of the citizens of our 
country should have access to government services; but because of 
heirs' property, many don't. For decades, Black farmers haven't . . . 
and this has resulted in Black Land Loss. The other major reasons for 
Back Land Loss are discrimination and access to fair & equitable 
credit.
    These are all things that could have been addressed with good and 
reasonable legislation. These are things that are just now starting to 
be addressed with the introduction of the Justice for Black Farmers 
Act, the Emergency Relief for Farmers of Color Act, the Reconciliation 
Bill passed by this Committee and the $1.9 Trillion American Rescue 
Plan recently passed by the Senate and the House; and signed into law 
by the President.
    We applaud Senators Booker, Warren, Gillibrand, Smith, Leahy, 
Warnock, Lujan and Stabenow. We applaud the House Agriculture Committee 
and its leadership. We applaud the House and Senate for getting this 
historical legislation passed. We applaud the Administration for its 
vision and USDA leadership for its support. We also applaud the many 
foot soldiers out there whom have tilled the soil, advocated for these 
issues, followed the stories, researched and wrote legislation as well 
as all those that dreamed of and struggled for this day to come.
    But Black farmers are not out of the woods yet. It is not time for 
celebration just yet. This is not the beginning of the story of Black 
farmers nor is it the end. It is merely one of the many chapters of 
Black farmers & landowners; one of the many chapters of our rural 
communities; of urban migration and of our nation.
    As I mentioned in my opening statement, Mr. Chairman, I am here to 
testify on the realities, struggles and perseverance of Black Farmers & 
Landowners.
    The reality is that Black farmers have gone out of business and 
lost the highest percentage of land than any other group in this 
country over the past century.
    In 1910, there were 218,000 Black farmers owning roughly 15 million 
acres of land. According to the U.S. Census; in 1992, there were only 
18,000 Black farmers owning 2.3 million acres of land. That's over a 
90% loss of Black farmers as well as almost a 90% loss of land.
    Another reality is that the majority of Black farmers get their 
credit from USDA's Farm Service Agency--the lender of last resort. This 
in itself is risky because farmers are expected to graduate out of the 
system in 7 years. After that, they are supposed to qualify for credit 
in the traditional market; however that date never comes for most Black 
farmers. Instead they are relegated to predatory style lenders at best 
and farming out of their pockets at worst. No business--especially 
farming--can survive in this reality. Credit is the life line of any 
business and is crucial in farming.
    The reality is also that Black farmers have historically been 
discriminated against in various ways--including at USDA--as shown in 
the historical Black farmer lawsuit (Pigford 1 and Pigford 2) . . . . 
Discriminated against at FSA, the lender of last resort. Thus, the 
Black farmers' reality is bleak even as it relates to credit.
    These realities have led to the struggles of Black farmers. The 
struggle to hold onto land for generations because of unsecure or 
cloudy titles . . . when the problem of heirs property could be solved 
with some simple steps, such as uniform heirs' property legislation; 
adequate funding for the existing heirs' property relending program 
that was approved as part of the 2018 Farm Bill; and targeted resources 
for awareness, education and direct legal & technical assistance to 
heirs' property landowners.
    The realities of Black farmers have also led to the struggle to 
successfully operate their farm business in a sector where they buy in 
a retail market, but sell in a wholesale market--primarily because of 
their lack of scale. 75-80% of Black farmers operate on 100 acres or 
less and primarily grow perishable products. A reality that begs for 
cooperative solutions that aggregate producers; and which could be 
addressed with more resources for cooperative developmentvia programs 
throughout all of USDA.
    And the realities of Black farmers have led to the struggle to 
access enough fair & equitable credit to grow their farms and 
businesses beyond part-time and/or subsistence farms. And this could 
readily be addressed with the creation of a cooperatively owned Black 
Farmer Financial Institution, owned and controlled by Black farmers.
    However, these struggles and these realities have forced Black 
farmers and landowners to be some of the most resilient people in their 
communities and in this country.
    Black farmers and landowners have persevered through the difficult 
days of share-cropping and the long nights of racism and 
discrimination. They continue to persevere in spite of the issues of 
heirs' property and the lack of access to fair & equitable credit.
    Black farmers and landowners continue to be on the front lines of 
feeding families, anchoring rural communities and protecting our 
environment regardless of their realities and struggles.
    The Black farmer story is a story of perseverance. It is about time 
for this story to be told. It is about time for this kind of hearing. 
It is about time for our country to support those that have given so 
much, but received so little in exchange.
    The Black farmer story is the American story. The realities & 
struggles of Black farmers are woven into the fabric of this country. 
Black farmers are a part of and vital to our food system, the 
environment and our nation. But far too often Black farmers are losing 
their land.
    As my late predecessor and mentor, Mr. Ralph Paige, was quoted in a 
New York Times article in 2018, ``when a Black farmer loses his land, 
it's our community losing a piece of this country.'' Now, I would take 
that a step further and say, ``it is also this country losing a piece 
of our community . . . and thus a part of itself.''
    Discrimination and land loss is all to prevalent in the lives of 
Black farmers and the Black community, which makes it difficult for 
many to see themselves in this great nation and as part of the solution 
to many of its challenges.
    So in closing, Mr. Chairman, I must reiterate that the Black farmer 
story is one of struggle and perseverance. A reality of land loss, 
discrimination, and lack of access to credit and resources . . . And 
yet, a reality of feeding families, anchoring communities and 
protecting our environment.
    The solutions to the challenges of our nation rest in the hands of 
our government, our organizations and corporations, as well as our 
citizens--including and especially our farmers & landowners; and this 
must include Black farmers & landowners.
    But we must first make them whole, in order for them to be the most 
effective contributors that they can be.
    Our air, our water, our soils and our lives depend on it!
    Thank you, Mr. Chairman and Members of the Committee, for the 
opportunity to appear before you today during this most historic 
hearing on Black farmers. I stand ready to answer any questions you 
might have.

    The Chairman. Thank you so much. I appreciate your 
excellent testimony.
    Mr. Haynie, please begin now.

  STATEMENT OF PHILIP J. HAYNIE III, CHAIRMAN, NATIONAL BLACK 
                  GROWERS COUNCIL, BURGESS, VA

    Mr. Haynie. Mr. Chairman, Secretary Vilsack, Members of the 
Committee, staff of the Committee, and to the many others that 
have worked tirelessly in making this hearing possible, I would 
like to say thank you. Thank you on behalf of the Black farmers 
and landowners who have been asking, praying, and waiting so 
long for relief. I would also like to say thank you on behalf 
of the Black farmers who have passed on without personally 
being able to witness this day.
    Mr. Chairman, I come before you today on behalf of the 
National Black Growers Council, an organization that consists 
of multi-generational farmers who advocate for the interest of 
Black farmers in their local communities, in their states, and 
to the Federal Government. An organization whose mission is to 
improve the efficiency, productivity, and sustainability of 
Black row crop farmers.
    Mr. Chairman, I think we all know the statistics that two 
percent of the U.S. population of farmers, and that Black 
farmers represent less than two percent of the entire 100 
percent of farmers in the United States. What I would like the 
Committee to truly recognize is that Black row crop farmers 
represent less than eight percent of the entire Black farm 
population. Mr. Chairman, Black farmers that grow corn, cotton, 
soybeans, peanuts, and rice are on the verge of extinction. Mr. 
Chairman, it is imperative that we support the remaining Black 
farmers that exist. It is imperative that we address the 
disparities and inequities that exist between Black farmers and 
their White neighbors, and it is imperative that we put 
programs in place that remove the economic knee that is on the 
neck of a lot of Black farmers and landowners.
    As we at the National Black Growers Council have said 
before, land is a farmer's most valuable and productive asset. 
As you canvass the country, you will often find Black farmers 
on non-irrigated land trying to compete with their White farmer 
neighbors who have used USDA programs to put irrigation on 
their land. You will also find Black farmers who have not been 
able to participate in land leveling and drainage, and other 
USDA programs to improve their farms like their White 
neighbors. These inequities place Black farmers at a 
significant disadvantage to producing higher yields and being 
profitable.
    Mr. Chairman, on a trip to the local USDA office to inquire 
about a beginning farmer loan, the county executive director 
brandished a loaded handgun at my father and I and told me that 
I did not need to get involved in farming and go get a job. My 
father, like many other Black farmers across this nation, was a 
victim of discrimination by USDA. After settling his case for 
25 percent of his economic losses, they barred him from ever 
borrowing money from USDA.
    These issues are discriminatory, and if not addressed, you 
and I will witness the extinction of Black row crop farmers.
    In 2020 the world changed, and we were and still are in 
what is called a pandemic. Unfortunately, Black farmers have 
been going through a pandemic for years. We have watched our 
fellow Black farmers be forced out of business and lose their 
land at far greater rates than our White neighbors.
    Mr. Chairman, the National Black Growers Council is 
committed to the cause, and is working with our corporate 
partners, fellow farm advocacy groups, and the Department of 
Agriculture to reverse the declining trend of Black farmers and 
landowners across these United States.
    Mr. Chairman, I was a college student in 1997, and watched 
my father, John Boyd, and other Black farmers from across this 
nation sit before legislators and policymakers to explain these 
disparities that exist between Black and White farmers. Twenty-
four years later, I am sitting before you, echoing the same 
tones and explaining to lawmakers about the inequities that 
still exist. Too many Black farmers have died with their cry 
for help falling on deaf ears. Mr. Chairman, I would hope and 
pray that my children do not have to sit at this table 24 years 
from now, still asking for you to right the wrongs on behalf of 
Black farmers.
    Mr. Chairman, for all the people who have been working on 
policy and legislation to help right the wrongs for Black 
farmers, I would like to leave them with these words of faith 
found in Galatians 6:9: ``Let us not become weary of doing 
good, for at the proper time, we will reap a harvest if we do 
not give up.''
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Haynie follows:]

 Prepared Statement of Philip J. Haynie III, Chairman, National Black 
                      Growers Council, Burgess, VA
    Chairman Scott, Ranking Member Thompson, and distinguished Members 
of the Committee:

    On behalf of the National Black Growers Council, thank you for the 
opportunity to testify at this important hearing today.
    The National Black Growers Council consists of multigenerational 
producers who advocate for the interests of Black farmers in their 
local communities, their states, and to the Federal Government. NBGC's 
mission is simple: to improve the efficiency productivity and 
sustainability of Black row crop farmers.
    As members of NBGC, we own our farms and seek opportunities to 
expand our operations. We strive to teach young men and women about the 
virtues of farming, the importance of agriculture, and the commitment 
it takes to be successful in the global business of agriculture.
    The NBGC was organized to represent the unique needs of full-time 
Black row crop farmers. We have formed partnerships with each other, 
with majority farmers, with land-grant universities, with agricultural 
companies and with USDA, because together, we all contribute to global 
food security.
    I am a fifth-generation farmer. I grew up working my family land 
with my father and grandfather in eastern Virginia where we grow corn, 
wheat and soybeans. I had a childhood dream of wanting to be a farmer. 
I finished high school and studied agriculture in college. I graduated 
with a Bachelor's of Science degree in Agricultural Economics from 
Virginia Tech and chose to return to my family farming business.
    While growing up on my family farm, as a kid I experienced two 
fires, the first one burned up our farrowing barn and our sow herd was 
lost. The second fire, burned up our equipment and a finishing barn. 
After my father rented the largest tract of land in the county, he 
experienced his equipment being shot up on that farm. We had to sleep 
in the truck with a shotgun whenever we left equipment on that farm. No 
convictions resulted from these cowardly acts; but I don't think the 
perpetrators were Black.
    The discrimination at USDA caused my parents to have an 
unbelievable amount of stress when they were denied loans or were late 
receiving operating money. This unnecessary stress was created by the 
uncertainty of farming in that era, fueled by racism, and ultimately 
caused the divorce of my parents. The discrimination by USDA caused a 
lot of young Black people to not want to be a part of their family's 
farms.
    The discrimination caused irrevocable damage to Black families.
    While in college, I learned from one of my white friends about the 
beginning farmer loan program at USDA. My father and I went into my 
local county office to inquire about the beginning farmer loan. The 
county executive director in my local county office asked me why did I 
want to farm. He told me that I was a bright young man with a good head 
on my shoulders and that I should focus on finding a good job after 
college. When I questioned why he didn't encourage my white high school 
friend to get a job and offered him a farm loan but not me he got 
upset. He asked me if I knew how much money my father owed the USDA? 
When I replied no I did not he opened my father's file and showed me 
all of my father's USDA loans. After doing that, he brandished my 
father and I with a loaded hand gun that he had in his desk. This 
incident has caused me to have nightmares about being shot in that FSA 
office. He also told my father; he should sell his land to a white 
farmer in the county and get a job at the local lumber company driving 
a forklift. Mr. Chairman, this is not something that happened to my 
forefathers, or something that I read in the history books. This 
happened to me.
    If I had not gone through that experience, I may not be able to 
relate to other Black farmers and their stories of discrimination. But 
this is my story. And this is why I am here to make sure no other young 
Black man or woman has to go through that experience again. Mr. 
Chairman some scars in life are irreversible and that is one that time 
cannot fade away.
    Today's hearing is an important step towards addressing a number of 
longstanding problems that continue to plague Black farmers. These 
chronic problems formulate the cumulative effects of being historically 
denied and impact three critical areas of farm sustainability: income, 
access to credit, and risk management.
    With regard to income, annual subsidies paid to Black farmers are 
significantly less than subsidies received by their White farming 
neighbors. Current subsidy options, Agricultural Risk Coverage (ARC) 
and Price Loss Coverage (PLC), are based primarily on the crops and 
yields grown on from 1981-1985, a period of admitted racial 
discrimination by USDA. Studies have shown that Black farmers receive 
less than 20% of the per acre amounts paid to their White farming 
neighbors. These inequities ultimately result in Black farmers being 
less profitable, which impacts the second critical area, access to 
credit.
    This is especially true when commodity prices are low and subsidies 
comprise a larger portion of farmers' income. The combined effects of 
these inequities often result in Black farms being less productive and 
having to rely on low-risk, low-reward enterprises. For example, 
planting less profitable crops like soybeans, right beside our white 
neighbors, because we lack the improvements like irrigation, land-
leveling and drainage that our white neighbors have who plant cotton, 
rice and corn. Even when we can make improvements needed to break this 
cycle, we face higher risks by only being able to obtain crop insurance 
at average production histories that span 10 years. To address these 
disparities, NBGC supports the following:

  1.  Provide credit needed to make improvements that would bring Black 
            farmers' land on par with the production potential of their 
            White neighbors;

  2.  Adjust Black farmers' subsidies to a level comparable to their 
            neighbors; and

  3.  Automatically adjust Black farmers' production history and 
            insurance coverage to an amount comparable to the farm's 
            potential after improvements are completed.

    Finally, Mr. Chairman, I wanted to highlight the ongoing issue of 
heirs' property rights impacting Black farmers. I mention this because 
Heirs' property, land owned by two or more people, often with a common 
ancestor who died without leaving a will, is the leading cause of 
involuntary land loss among Black farmers.
    As we at NBGC have said before, land is a farmer's most valuable 
and productive asset. And yet, 60 percent of Black farmers today 
produce on property that has been passed through their families for 
generations without secure title. Without secure title, Black farmers 
are unable to leverage the full value of their land, including 
accessing Title I USDA programs. Black farmers have gone into local 
USDA offices and have been told they cannot sign a farm up for program 
participation because the farmer cannot provide all the signatures of 
heirs on the property. They offer the white farmer the option to 
provide a cash rent statement and not have to go through these 
obstacles. We need a system where USDA will work with us where the 
property is protected and benefits can be passed on to the operator.
    In order to help address these outstanding issues, we and our 
partners at John Deere and the Thurgood Marshall College Fund launched 
the Legislation, Education, Advocacy, and Production Systems (or LEAP) 
Coalition in September 2020. In cooperation with the Federation of 
Southern Cooperatives and my colleague on this panel Mr. Blanding, the 
LEAP Coalition brings awareness, expertise, and legal resources to help 
Black and traditionally under-represented farmers gain clear title to 
their land.
    Specific activities the LEAP Coalition will support include:

   Supporting legislation on Heirs' Property reform

   Partnering in efforts to clearing title for Black farmers

   Investing in Fellowships, Internships, and Agribusiness 
        career paths

   Engaging in estate planning to prevent the further 
        proliferation of Heir's Property

   Amplifying the work of The Federation of Southern 
        Cooperatives

   Raising awareness regarding the issues and challenges 
        experienced by Black farmers

   Providing education and training to support Long-term 
        Sustainability and Economic viability

    After heir's property issues are cleared, NBGC plans to continue 
working within our networks to bring this land to maximum productivity. 
I want to thank our sustaining members for their support of this 
legislation and their continued commitment to help us achieve this 
goal.
    In closing, it is clear that much work remains to address 
longstanding issues impacting Black farmers. We look forward to working 
with you and the Committee to address these issues moving forward, and 
I look forward to your questions.

    The Chairman. Thank you very much, Mr. Haynie, for your 
excellent, excellent report to us.
    And now, I recognize Mr. Rowe. Please begin your testimony.

 STATEMENT OF SEDRICK ROWE, OWNER/OPERATOR, ROWE ORGANIC FARMS 
                        LLC, ALBANY, GA

    Mr. Rowe. Thank you for the opportunity to be able to be on 
this call and be able to share my testimony. My name is Sedrick 
Rowe. I am a young farmer from south Georgia. I do row crop and 
I do also organic farming. I am a first generation farmer. I 
have been farming for 4 years on my own. I had the opportunity 
to graduate from a land-grant institution that also taught me a 
little bit more about farming, and my experience of it, nothing 
has changed since the past. Hearing my granddaddy and older 
people talk about farming back in the day and how they weren't 
able to access land and equipment. I am going through that 
personally myself.
    I applied for beginning farmer programs, micro loans. The 
reason I didn't get funded, I don't know. I have a legit reason 
why I need the assistance, and also, the red flags are still 
there because I'm giving them all of my information, all of my 
life, just for them to tell me no again. It holds me back as a 
farmer.
    I see the effort we are doing to allocate monies for those 
programs, but are those programs actually funding these farmers 
or not? Are these farmers taking advantage of those programs? 
We are not able to, because when you look at a Black farmer, 
you are thinking small. That is why we are on that one percent, 
two percent level. Speaking from my personal experience, it has 
just been hard to even get into the market with peanuts. As you 
know, peanuts are a commodity, and in order for you to grow 
peanut--a commodity sells itself. So, as a Black farmer, I 
can't just take my peanuts to any peanut mill, because they 
will say oh, we are full. They will give me some excuse of why 
they can't take my peanuts.
    As a young farmer, I created my own avenue to create my own 
market, organic peanuts. Something that I know large farmers 
can't compete with. That is why I stepped into another market 
like hemp. I started doing more organic and start work focusing 
on the soil and the land, something that we always focused on 
growing up. Take care of the land, the land will take care of 
you. Coming from that era and having that mentality, even my 
little small piece of land, it matters just like a larger 
farmer.
    I see, to this day, monies being allocated to help out 
young and Black farmers, and socially disadvantaged farmers, 
but, it comes with so much just for that farmer to access that 
money. You look on the other hand, it is easy for them to 
access money. They will tell you I qualify for it, but when I 
get there, it is a whole other story. We need to change up who 
qualifies and who doesn't. A lot of the Black farmers miss out 
on the opportunity to keep the land in their family name, so 
they are forced to go get a loan from the government, which 
nine times out of ten, brings them into more debt, because 
everyone knows farming is a risk. Every year is not a 
profitable year. Farmers like me will look, in order for me to 
feel like the government is giving me the right assistance, it 
is funny how we have a pandemic, and during the pandemic you 
have other banks and all that that have forgiveness on their 
loans, but government, USDA had loans out allocated for these 
farmers, but you never gave them the option for forgiveness so 
their family can keep their land in their name. Something to be 
able to show--with forgiveness, you have to show what you are 
doing, show how you--at this one step, how it bettered you--to 
the next step. I feel like we need to take more steps and the 
people at the top need to focus more on the people at the 
bottom.
    Just to lead with a scenario that--something that I always 
used to tell people. The important person in the building is 
the janitor. We as Black farmers are janitors. The top person 
can be the principal or the President. If the President is not 
too attentive, it is not a good structure. We need to make sure 
we build that structure from the top all the way to the bottom 
to the farmers. The people that are allocating this money need 
to know exactly who is using it, why they are using it, who 
really needs it. And I think there is a separation in between 
there, because it is different saying, ``Yes, we put money out 
there for you,'' but when we are not able to access it, it is 
more like saying, ``Well, we put it there. It is up to you to 
get it.'' That is not hope. That is not giving a farmer or a 
Black farmer any hope to be able to continue to hold on to what 
they had in their family.
    So, that was just some personal stuff that I have been 
through that I can still see that hasn't changed within the 
system.
    [The prepared statement of Mr. Rowe follows:]

Prepared Statement of Sedrick Rowe, Owner/Operator, Rowe Organic Farms 
                            LLC, Albany, GA
    My name is Sedrick Rowe. I am a young Black first generation 
farmer. I have a Bachelors Degree in Plant Science with a concentration 
Horticulture and a Masters of Public Health with a concentration in 
Environmental Health. I own a 30 acre organic farm where I grow 
peanuts, watermelons, sunflowers, and hemp. I was one of the first 
three farmers in my area to establish a market for organic peanuts and 
I am a founding member of the Georgia Organic Peanut Association. I 
have been involved in agriculture all of my life and that experience 
continues to show me what it takes to develop a successful farm 
business. Unfortunately, I did not inherit land, so I built my farm 
from the ground up by purchasing land. I have seen and experienced 
racism and discrimination within the agricultural system, as have so 
many other Black seasoned as well as young farmers. My experience has 
allowed me to witness firsthand, the difficulties Black farmers have 
when attempting to access funds from the United States Department of 
Agriculture. I personally have been unable to access those funds while 
watching my white counterparts having little, if any, problem doing so. 
I have applied for micro-loans as well as Beginning Farmers Assistance 
and was denied: reasons given included insufficient collateral, market 
contracts were insufficient and tax returns for the previous year did 
not show enough income to pay the loan. It is extremely difficult for a 
beginning farmer to meet these criteria. Loan criteria has to be more 
flexible and equitable--and should include a combination of loans and 
grants.
    Even when funds are supposedly put in place to assist Socially 
Disadvantaged Farmers and Ranchers, the rules, regulations and 
paperwork make them difficult to access, for example, farming history 
and matching funds. Although FSA is supposed to be the ``go to'' agency 
for farmers who are having difficulty securing loans from commercial or 
other sources, it falls way short when it comes to Black farmers--again 
this comes from personal experience.
    Although I consider myself to be a successful young Black farmer, 
it is difficult for me to convince others to join me if I cannot assure 
them that if they do all of the right things, they will have the 
backing of the USDA.
    Although Black farmers make up a small percentage of all farmers, 
they play a critical role in making sure that marginalized people and 
communities throughout the Black Belt Region have access to healthy and 
affordable food. We need to make sure they not only remain in business 
but that their number increases.
    Community organizations also need support as they are often the 
only thing standing in the way to keep people like me from losing their 
farms. I once worked with one organization (The Southwest Georgia 
Project). I saw how these organizations advocated on behalf of farmers 
of color and worked through the red tape when farmers could not do so 
themselves. In many instances they helped mitigate the lack of trust 
between the USDA and farmers of color. So their continued existence and 
sustainability is critical.
    In the end, it is the responsibility of the USDA to level the 
playing field so that Black and other minority farmers can not only 
survive, but also prosper.
    Thank you.

    The Chairman. All right. Thank you very much, Mr. Rowe, for 
your very good and very informative testimony. Thank you.
    And now, Mrs. Sherrod, we recognize you. Please begin now.

  STATEMENT OF SHIRLEY SHERROD, EXECUTIVE DIRECTOR, SOUTHWEST 
                 GEORGIA PROJECT FOR COMMUNITY 
                  EDUCATION, INC., ALBANY, GA

    Mrs. Sherrod. Thank you, Chairman Scott--can you hear--and 
the Committee for inviting me to speak today.
    I grew up on a farm and my life's work has been with 
farmers and people in rural communities in the South. On a more 
personal note, though, today, March 25, marks the 56th 
anniversary of the death of my father, a farmer who was 
murdered by a White farmer that the racist system failed to 
prosecute. It is within this context that I dedicated my life 
to help make this world more just and equitable for everyone.
    For over 5 decades, I have worked with and on behalf of 
farmers, especially Black farmers and the rural communities in 
which they live. Although Black farmers share many of the 
problems faced by all small farmers, their situation is 
compounded by systemic racism within the USDA and other public 
and private institutions that are supposed to serve all 
farmers, no matter their race or agenda.
    The USDA is assumed to be the source of last resort when 
the private-sector falls short. Unfortunately, since its 
inception, USDA itself has fallen short and failed to meet its 
obligations to Black farmers. Regrettably, the USDA has been 
the driving force behind the steady decline in the number of 
Black farmers and Black-owned farmland. This loss has and 
continues to have a domino effect throughout the Black Belt 
region of America and beyond. Without productive land that 
supports economic development, the region suffers from 
inadequate education, lack of access to healthy and affordable 
food, poor health outcomes, and brain drain, among other 
things.
    Now, the USDA did admit in the Pigford case that it has a 
history of discrimination against Black farmers. That admission 
and subsequent settlement did not bring about any systemic 
changes and left in place many of the individuals who 
perpetrated the racism and discrimination. In fact, to my 
knowledge, I, a Black woman, am the only person ever fired by 
the USDA for discrimination, a claim that was later disproven. 
Although Pigford itself was historic and exposed the real USDA, 
unfortunately because the government was so incalcitrant, over 
90 percent of the farmers who prevailed in the lawsuit were not 
made whole.
    So, where do we go from here? We need to restore Section 
2501. This policy was the brainchild of the Federation of 
Southern Cooperatives nearly 3 decades ago. I was a staff 
member of the Federation, and therefore, very familiar with all 
the work and documentation that led to its passing as a 
permanent part of the farm bill. Its original intent was to 
provide farmers of color, especially Black farmers with 
outreach and technical assistance, so they could better access 
USDA services.
    The second one, eliminate burdensome matching requirements. 
Many USDA programs require a match that is out of reach for 
most Black farmers. This is akin to a poll tax. It keeps the 
benefit out of our hands.
    Three, engage in real problem solving. Use the Georgia 
Strike Force example as a model, and fully fund it. Invest in 
1890s. 1890 universities are key to Black farmers' success. 
Ensure that they are funded adequately--equitably, let's say. 
Launch infrastructure fund, provide funds for Black farmers to 
develop or improve processing facilities, secure 
transportation, organize cooperatives, and more. Diversify the 
staff. Mandate increasing diversity in USDA staff makeup. And 
last, culture change. Staff culture flows from the culture of 
the leaders. Secretary Vilsack should invest significant time 
and effort into building a culture in which discrimination is 
not tolerated, and is with the end in which dismantling of 
systemic racism is rewarded.
    Thank you so much for giving me this opportunity. These are 
but a few things that we can begin to put in place today while 
we wait on the fate of policies currently under consideration. 
We must also understand that even if these policies are 
approved, they only represent a down payment on what is owed to 
Black farmers and their communities after more than a century 
of neglect and discrimination.
    Thank you.
    [The prepared statement of Mrs. Sherrod follows:]

 Prepared Statement of Shirley Sherrod, Executive Director, Southwest 
       Georgia Project for Community Education, Inc., Albany, GA
    My name is Shirley Sherrod; I live in Albany, Georgia and currently 
serve as the Executive Director of the Southwest Georgia Project for 
Community Education, Inc. (SWGP). SWGP is a nonprofit organization that 
was born out of the civil rights movement with a mission to educate, 
engage and empower communities through grassroots organizing and 
technical assistance.
    On a more personal note, today March 25, marks the 56th anniversary 
of the death of my father, a farmer who was murdered by a white farmer 
that the racist system failed to prosecute. It is within this context 
that I dedicated my life to help make this world more just and 
equitable for everyone.
    For over 5 decades, I have worked with and on behalf of farmers--
especially Black farmers--and the rural communities in which they live. 
I also served under the Obama Administration as the first Black State 
Director of Rural Development. My work has afforded me the opportunity 
to help build coalitions that cross both state and international 
borders. I have learned that small farmers throughout the world are 
struggling to survive in an environment that overwhelmingly favors 
large scale and corporate farms.
    Although Black farmers share many of the problems faced by all 
small farmers, their situation is compounded by systemic racism within 
the USDA and other public and private institutions, that are supposed 
to provide services to all farmers no matter their race or gender. The 
USDA is assumed to be the source of last resort when the private-sector 
falls short of its duties and responsibilities. Unfortunately, since 
its inception, the USDA itself has fallen short and failed to meet its 
obligations to Black farmers; regrettably, the USDA has been the 
driving force behind the steady decline in the number of Black farmers 
and Black owned farm land. This loss has and continues to have a domino 
effect throughout the Black Belt Region of America and beyond. Without 
productive land that supports economic development, the region suffers 
from inadequate education, lack of access to healthy and affordable 
food, poor health outcomes and brain drain among other things.
    The USDA has been called the last plantation and for the most part 
has worked relentlessly to live up to that reputation. Its efforts to 
try and remedy the problem it caused, has generally fallen way short. 
Those efforts are usually under-funded, short-lived, at the mercy of 
changing Administrations and opposition from employees.
    There has to be a long-term, well-resourced commitment at all 
levels of the USDA if Black farmers are to remain part of America's 
production agriculture system.
    Although the USDA did admit in the Pigford case that it has a 
history of discrimination against Black farmers, that admission and 
subsequent settlement did not bring about any systemic changes and left 
in place many of the individuals who perpetuated the racism and 
discrimination. In fact, to my knowledge, I (a Back woman) am the only 
person ever fired by the USDA for discrimination, a claim that was 
later disproven. Although Pigford itself was historic and exposed the 
``real USDA'', unfortunately because the government was so 
incalcitrant, over 90 percent of the farmers who prevailed in the 
lawsuit were not made whole.
    The question is ``where do we go from here?''
    There are two game changing policies (Justice for Black Farmers Act 
and the recently passed Emergency Relief for Farmers of Color Act) that 
could address some of the past and current problems faced by Black 
farmers and the communities in which they live. History has shown that 
good legislation often dies or is weakened in the regulatory and 
implementation process. While we wait for the outcome of the two 
policies, there are things that can be done now to help struggling 
Black farmers and communities.
    Following are a few commonsense examples:

   Too often USDA uses regulations to hinder rather than help 
        Black farmers such as the Value-Added Producer Program which 
        requires matching funds as well as certain NRCS grants. Also 
        constant changes in the Section 2501 program--changes that are 
        making it less [accessible] for the groups it was originally 
        intended for.

   Return section 2501 to its original intent. This policy was 
        the brainchild of the Federation of Southern Cooperatives/Land 
        Assistance Fund (FSC/LAF) nearly 3 decades ago. I was a staff 
        member of the FSC/LAF and therefore very familiar with all the 
        work and documentation that led to its passing as a permanent 
        part of the farm bill. Its original intent was to provide 
        farmers of color (especially Black farmers) with outreach and 
        technical assistance so that they could better access USDA and 
        other services as they work to develop successful farm 
        businesses. That assistance would be provided by experienced 
        community organization and minority serving universities. 
        Unfortunately, 2501 has become a catchall for almost any small 
        farm program such as beginning farmers and veteran farmers. 
        These farmers are important and deserve a separate program to 
        meet their needs while 2501 should return to its original 
        intent and be fully funded.

   Many of the resources within the USDA cannot be accessed by 
        Black farmers and community-based organizations; the reason 
        being that they cannot meet the matching requirement or other 
        restrictive rules such as having to collaborate and work with 
        other community-based organizations across state lines. These 
        requirements should be eliminated and funds provided solely on 
        the merits of the farmers or CBO's business plan or program 
        respectively.

   The USDA's now dormant Strike Force program was based on a 
        program I instituted while serving as Georgia State Director of 
        Rural Development. It brought together all agencies within the 
        USDA to analyze problems and employed a holistic approach to 
        solving those problems. The program enjoyed mild success and 
        could have had tremendous success had funds been earmarked 
        especially for it. That program should be revisited by the 
        Secretary of Agriculture.

   While I cannot speak for 1890 Universities, I will say that 
        they play a key role in the survival of Black farmers and rural 
        communities. There needs to be more equitable funding for these 
        universities.

   Black farmers need to be able to market their products and 
        not be limited to any one market; they have to be able to 
        diversify their markets. To do this, they need the necessary 
        infrastructure. There needs to be a Black farmer infrastructure 
        fund that will allow farmers to develop and/or improve 
        processing facilities, secure appropriate transportation, 
        organize cooperatives, etc.

   There has to be diversity within the various USDA state 
        offices and everyone in those offices should be held 
        accountable.

   The USDA can only stop being the ``last plantation'' when 
        the culture within the Department changes.

    These are but a few of the things we can begin to put in place 
today while we wait on the fate of policies currently under 
consideration. We must also understand that even if these policies are 
approved, they only represent a down payment of what is owed to Black 
farmers and their communities after more than a century of neglect and 
discrimination.

    The Chairman. Thank you so much for your testimony, Mrs. 
Sherrod. We are learning so much here, and the purpose of this 
hearing is we are putting together a bill, a piece of 
legislation to address and come out. Rest assured that your 
testimony, your ideas are not in vain, because we are putting 
together Black farmers and a piece of legislation to bring 
this. So, this is just the beginning. Thank you all so very 
much.
    And now, we have, I believe, Mrs. Cotton. Mrs. Cotton, 
would you begin your testimony?
    Mrs. Cotton, you may want to unmute.
    Mrs. Cotton. Chairman Scott?
    The Chairman. Yes.

STATEMENT OF ARNETTA COTTON, CO-OWNER AND PROGRAM FACILITATOR, 
                 KINGDOM COMMUNITY DEVELOPMENT 
         SERVICES, WAGONER, OK; ACCOMPANIED BY EARRAK 
             COTTON, OWNER, CATTLE FOR THE KINGDOM

    Mrs. Cotton. Chairman Scott, Ranking Member Thompson, and 
distinguished Members of the Committee, we would like to 
begin--can you see me? Can you hear me?
    The Chairman. Yes, go right ahead. We can hear and see you.
    Mrs. Cotton. Okay.
    Chairman Scott, Ranking Member Thompson, and distinguished 
Members of the Committee, we would like to begin by thanking 
you and God for the privilege and honor of testifying in this 
hearing. It is our hope that something said or done will result 
in greater understanding, reconciliation, and change.
    Thank you, Representative Tracey Mann, for our 
introduction.
    Little children across the United States who grew up 
watching their parents passionately work the land through 
torrential rains, incessant droughts, troublesome pestilence, 
and extreme poverty were often consumed by the idea that one 
day, this land will be mine. Somewhere between working behind 
the plow for several hours at a time in the blazing sun for 
days on end to get the crops in and out, and the rare 
opportunities to reward themselves with a soda or an ice cream, 
they developed an insatiable obsession with nature. However, to 
be Black and possess that type of intensity towards the Earth 
in the United States at a young age can accurately be compared 
to someone laboring under the sweltering sun in a desert 
towards something that appears to be real, but in fact, is an 
optical illusion. Over time, as the mirage steadily relocates, 
the child matures to adulthood. What remains is a diminutive 
essence of potential. Yet, despite years of imagining, the 
slightest scent of possibility is all that is required to 
stimulate hope in the heart of a Black farmer.
    We felt that hope. So, when at the age of 24 and married 
less than 5 years with two baby girls, we were advised that the 
then-FmHA was an agency that existed to assist young and 
beginning farmers, especially minorities. We thought we would 
be welcomed with open arms. Instead, when we stepped into our 
county FmHA office in 1984, the secretary looked up and 
continued working without ever acknowledging our presence. 
``Ma'am, is this the FmHA,'' we asked. ``Yes,'' she answered, 
never moving from her desk. An unwelcoming aura and 
overwhelming strangeness filled the room. Without ever a word 
spoken, its presence seemed to demand that we simply turn 
around and leave. But we didn't. The county supervisor's tenure 
could not be denied, but neither could his unorthodox practices 
and forgetfulness. We had meetings at his home. Our file was 
lost and misplaced several times. Some years later, our initial 
contact transitioned out of his role, and we were buried under 
the transition of powers. For example, on several occasions, 
the FmHA contractor and Langston University representatives 
reworked our farm plan on the same application, and they 
concluded we had good records. Our cattle were in excellent 
condition, and that was an average production and some non-farm 
income, the plan was feasible. Yet despite their findings, the 
county committee rebutted that they were not comfortable with 
our abilities, that the entire application should be changed. 
And since we could not effectively explain the reworked plan, 
we could not possibly implement them with any degree of 
success. All of our alternative plans were repeatedly denied, 
but no viable plan for success was ever offered.
    Were it not for the elders who had a keen eye for 
identifying those whose work ethics and moral compass and 
instinctive cunning were perfectly suited for the land, they 
would have become extinct. Thankfully, one such elder offered 
her wisdom and trust to us, so we appealed the decision of the 
county supervisor. We appealed, and the decision was 
overturned.
    But despite it overturning, the FSA office said maybe we 
should go ahead and let the applicant know that further 
information is needed. The county supervisor told us that we 
needed to get our property appraised, and he selected the 
appraiser. Coincidentally, that appraiser appraised our 
property for less than it was valued for a year earlier. And 
despite winning our appeal, we lost the denial of our 
application.
    It was not our county office who told us about the 
designation and how language was expressly written to extend 
help to socially disadvantaged people. A friend helped us to 
navigate through this system. We went to USDA in Washington, 
D.C., and met with several officials. These consultations 
resulted in our first community meeting. There were over 100 
people there in 4" of rain. We partnered with Langston 
University.
    Let me just skip down to this, if you would, please, Mr. 
Chairman.
    One of the reasons that local churches and faith-based 
organizations are the backbone in communities and the F2F 
Program is because people trust them. We serve from hearts of 
love with boots on the ground. It is the same spirit that we 
really--we humbly ask this Committee----
    The Chairman. I am sorry.
    Mrs. Cotton. Let me say this. May I please? May I say this?
    The Chairman. I am going to----
    Mrs. Cotton. We have faith in God who created one race of 
people, the human race, and who created the Earth, the one on 
which we exist together, and the heavens, the ones that we 
continue to explore. We believe that He gave us the ability in 
Him to equitably dwell together in peace, harmony, and love, to 
preserve this beautiful land.
    [The prepared statement of Mrs. Cotton follows:]

Prepared Statement of Arnetta Cotton, Co-Owner and Program Facilitator, 
          Kingdom Community Development Services, Wagoner, OK
    Chairman Scott, Ranking Member Thompson, and distinguished Members 
of the Committee, we would like to begin by thanking you and God for 
the privilege and honor of testifying in this hearing. It is our hope 
that something said or done will result in greater understanding, 
reconciliation, and change.
    We are Earrak and Arnetta Cotton of Oklahoma, and we have more than 
54 years of farm and ranch experience and 39 years of farm and ranch 
management experience as the owners of Cattle For The Kingdom (CFTK). 
Earrak is retired from a 30 year career service with State Farm 
Insurance and now serves as the head pastor of Unity Temple Family 
Church in Inola, Oklahoma--a body of Believers that started more than 
100 years ago. He also serves on the U.S. Department of Agriculture 
Natural Resources Conservation Services (NRCS) State Technical 
Committee in Oklahoma. Arnetta currently serves as the Program 
Facilitator for Kingdom Community Development Services, the Rural 
Impact Food Pantry, and the Agricultural in Action Program which 
includes a market gardening school and farm training program in 
conjunction with Langston University--the 1890 Land-Grant University in 
Oklahoma, and Oklahoma State University--the 1862 land-grant in the 
state. She was also appointed by Secretary Sonny Perdue to serve on the 
USDA Minority Farmers Advisory Committee.
    Little children across the United States who grew up watching their 
parents passionately work the land through torrential rains, incessant 
droughts, troublesome pestilence, and extreme poverty were often 
consumed by the idea, ``One day this land will be mine.'' Somewhere 
between working behind a plow for several hours at a time in the 
blazing sun for days on end to get the crops in and out, and the rare 
opportunities to reward themselves with a soda or ice cream, they 
developed an insatiable obsession with nature.
    However, to be Black and possess that type of intensity towards the 
[E]arth in the United States at a young age can accurately be compared 
to somebody laboring under the sweltering sun in a desert towards 
something that appears to be real; but, in fact, is nothing more than 
an optical illusion. Over time, as the mirage steadily relocates, the 
child matures to adulthood. What remains is the diminutive essence of 
potential. Yet despite years of imagining, the slightest scent of 
possibility is all that is required to stimulate hope in the heart of a 
Black farmer.

    We felt that hope. So, when at the age of 24 and married less than 
5 years with two baby girls, we were advised that the then Farmers Home 
Administration (FmHA) was an agency that existed to assist young and 
beginning farmers, especially minorities, we thought we would be 
welcomed with open arms. Instead, when we first stepped in our county 
FmHA office in 1984, the secretary looked up then continued working 
without ever acknowledging our presence.
    ``Ma'am, is this the FmHA?'' We asked.
    ``Yes,'' she answered, never moving from her desk.
    An unwelcoming aura and overwhelming strangeness filled the room. 
Without a word ever spoken, its presence seemed to demand that we 
simply turn around and leave; but we didn't.
    The County Supervisor's tenure could not be denied, but neither 
could his unorthodox practices and forgetfulness. We had meetings at 
his home, and our file was lost and misplaced several times. Some years 
later, as our initial contact transitioned out of his role, we were 
buried under the transition of powers. For example, on separate 
occasions an FmHA contractor and Langston University representative 
reworked our farm plan on the same application and concluded we had 
good records, our cattle were in excellent condition, and that with an 
average production and some non-farm income, our plan was feasible. Yet 
despite their findings, the County Committee rebutted that they were 
not comfortable with our abilities, that the entire application should 
be changed, and that since we could not effectively explain the 
reworked plans, we could not possibly implement them with any degree of 
success. All our alternative plans and approaches were repeatedly 
denied, but no viable plan for success was ever offered.
    Our calls were avoided, refused, or forwarded to oblivion; we were 
required to travel to various USDA offices, restaurants and even ball 
parks for any chance to discuss the issue; our meetings were canceled 
and rescheduled without notice; and unofficial County Committee 
meetings took place where official decisions were made on our 
application without having a completed application to review.
    Often, these experiences were witnessed by our four children.

    Were it not for the Elders who had a keen eye for identifying those 
whose work ethics, moral compass, and instinctive cunning were 
perfectly suited for survival, far more Black farmers would have become 
extinct. Thankfully, these strategic leaders (though few in number) 
persevered through insurmountable odds and outlasted personal assaults 
to maintain some semblance of dignity as they paid for their land one 
penny at a time.
    Often, when the stage was properly set and everything was 
synchronized for change, they would test the waters by leasing a 
portion of their land to a competent, but less experienced person of 
color whom they could mentor through the process. The eventual glimmer 
in their eyes served as witness of their approval. While their wisdom 
was readily available, they understood for the fledgling farmer to 
establish a faithful relationship with the land, they had to learn 
about her incalculable nuances for themselves. This search for intimacy 
would inevitably rekindle a desire in the Black farmer to own their own 
property. One such Elder offered her wisdom to and trust in us.

    So, we appealed the decision of the County Supervisor. We appealed 
because of the unjustifiable dragging out of our application process; 
the deteriorated condition of our home; and the intentional and 
persistent prodding and provocation we experienced. In 1994, the 
decision to deny us was overturned, and the state Farm Service Agency 
(FSA) office advised that the best course of action would be to proceed 
with the application and to let the applicant know what further 
information was needed.
    The County Supervisor told us we only needed to have the property 
appraised, and he secured an appraisal service. Conveniently, the 
appraiser the County Supervisor secured valued the property for far 
less than its original worth only a year earlier. Despite winning our 
appeal, our request was ultimately denied based on the appraisal.

    You may not know this, but the term ``underserved farmer'' 
originated from eight Black farmers in West Central Oklahoma who 
submitted a court brief in Pigford v. Glickman. The designation is 
meant to address the unique circumstances and concerns of underserved 
farmers, including Black farmers, and focus on equity in accessing USDA 
programs and services. The term has been used to initiate a wide 
variety of programs and resources at USDA, including grants and loans 
and scholarship opportunities for students studying agriculture at 1890 
and 1994 land-grant universities.

    It was not our county office who told us about this designation and 
how the language was expressly written to extend help to socially 
disadvantaged farmers like us. They did not tell us this when we were 
initially denied, when we were denied for the second time, or even 
after we were instructed to get an appraisal. It was a friend, who like 
us had experienced more than 35 years of extreme racial and 
programmatic discrimination at the hands of others.
    That friend helped us navigate the system. He introduced us to key 
contacts at USDA including then Oklahoma state directors, Gary O'Neill 
at NRCS, Dr. Lee Denny at Rural Development, and Scott Biggs at FSA as 
well as Mike Beatty and Jacqueline Davis-Slay at USDA's Office of 
Partnerships of Public Engagement (OPPE). In fact, it was at a USDA 
OPPE Faith Fellows Training in Washington, D.C. where we learned about 
developing and maintaining partnerships focused on solutions to 
challenges facing rural and underserved communities like ours. Our 
friend also helped us learn that we could utilize programs from all 
USDA arms to solve the issues that have plagued us for nearly 40 years 
and other Black farmers for centuries. In fact, we could utilize 
community facility loans for our nonprofit community organization; farm 
labor housing programs; water and sewer grants; and more.
    Those consultations resulted in our first community outreach 
meeting at the church we lead. We were able to share the information we 
had learned with more than 100 people who came to learn about USDA 
resources during a deluge of 4" of rain.
    Because of our new knowledge of USDA programs and partnerships 
stemming from our various community outreaches, we have also:

   Partnered with Langston University to host an 8 month 
        Marketing Garden School including an active garden throughout 
        the growing season that supported our local Farmers Market;

   Distributed Farmers to Families Food Boxes to more than a 
        million people through all five phases in Oklahoma, Kansas, 
        Missouri, Texas, and Arkansas;

   Distributed 500 turkeys at Thanksgiving last year thanks to 
        our partnership with IRUSA;

   Purchase equipment, supplies, and materials necessary to 
        bring our pantry up to code thanks to Cherokee Nation;

   Earrak became Oklahoma's first African Native American by 
        card to serve on the NRCS Oklahoma State Technical Committee; 
        and

   Arnetta was selected by then Secretary Sonny Perdue to serve 
        on the USDA Minority Farmers Advisory Committee.

    One of the reasons local churches and faith-based organizations are 
the backbone in communities and the F2F program is because people trust 
them. We serve from hearts of love with boots on the ground. It is in 
this same [spirit] that we rally the cause for other Black farmers. We 
forward information we receive to area farmers and other interested 
parties. We take calls. We provide information. We instruct and 
advocate. That mentality should prevail when working with and 
conducting outreach to Black farmers.

    We can no longer afford to shroud the lack of follow-through 
business with Black Farmers in the busyness of meetings about Black 
Farmers. We should not only come with business cards, but also with 
applications prepared to give our time not just our contact 
information. We should go to whatever lengths necessary to provide 
thorough and complete information and assistance. There is still much 
work to be done, and we are committed to helping achieve this goal.
    We humbly ask this Committee to consider implementing a Pilot 
Program with HBCU's Outreach Programs in cooperation with active Black 
Community Based Organizations to implement comprehensive training 
programs on behalf of USDA to underserved farmers in how to complete a 
Whole Farm Plan with subsequent technical and practical support. 
Additionally, we ask that you consider offer training and compensation 
for non-governmental Black farmers to conduct community outreach 
meetings for USDA, FSA, NRCS and RD. This would, in turn, bolster 
confidence, participation and stimulate new interest in USDA programs.
    Just as we have faith in God who created one race of people--the 
human race; one [E]arth--the one on which we dwell together; and the 
heavens, which we continue to explore, we earnestly believe He gave us 
the ability in Him to equitably dwell together in peace, harmony and 
love in order to preserve it all.
    Thank you again, and we look forward to your questions.

    The Chairman. Thank you, thank you, thank you.
    I tell you what, fantastic and very informative, and very 
impressive testimony that we have heard from our distinguished 
panelists, all of our Black farmers here. It has been 
tremendous and very helpful. And from our Secretary as well.
    And now, we are going to now proceed to getting questions 
from us Members. I am going to start, then the Ranking Member, 
and then we are going to go with each of our Members on the 
Committee, alternating between Democrats and Republicans.
    And first of all, let me start with this question, if I 
may. I recognize myself for 5 minutes, and I will be held to 
that to be sure to set the proper example. I hope everybody 
heard me there.
    Secretary Vilsack, again, let me thank you for coming. But 
I want you to clear up for us, if we have this--can you hear 
me, Secretary?
    Secretary Vilsack. Yes, sir.
    The Chairman. Good. We have just passed the American Rescue 
Plan Act of 2021 in which we had a total of right at $5 billion 
to get to our Black farmers.
    First of all, $4 billion of it was for the loan 
forgiveness. Now, tell me what are the instructions for how our 
farmers can make sure they get access to that money? How long 
will it take, and will there be some cumbersome bureaucracy in 
the way of them getting it, first of all?
    Second of all, is it true that this money for the loan 
forgiveness that our Black farmers will be getting will be 
subject to taxation, that the IRS will count it as income, and 
then they got another bill to pay? Clear up the entire 
disposition, and let's get it plain how we can make sure that 
this big hit we are giving to help our farmers get right to 
them quickly, immediately.
    Secretary Vilsack. Mr. Chairman, the instructions, first 
and foremost, is to do this as quickly, as thoughtfully, and 
carefully as possible. Two types of loans we are dealing with, 
direct loans and guaranteed loans.
    Let me deal with the direct loans first. To the extent that 
it is a relatively simple, straightforward loan, we are going 
to try to get this--these done sort of in a tiered circumstance 
situation as quickly as possible. One hundred twenty percent, 
basically, the loan gets paid off. Twenty percent goes to the 
farmer. Now, farmers are going to have to think about this 
because to your question on taxation----
    The Chairman. Well, wait just a minute. You say of the 
amount, 20 percent goes to the farmer?
    Secretary Vilsack. Twenty percent goes to the farmer for 
the purpose of paying the tax.
    The Chairman. Good. Thank you.
    Secretary Vilsack. But, farmers need to think about this, 
Mr. Chairman, because depending upon the size of the loan, the 
tax issue may be so that you may want to divide potentially the 
forgiveness of the loan over more than 1 tax year in order to 
minimize your tax liability. That is why it is going to be 
necessary for us to use a portion of the money from Section 
1006 to provide outreach, technical assistance, and advice so 
the people can make the best decision for their farm so they 
don't find themselves in a deeper hole when this is all said 
and done.
    On the guaranteed loan side, remember, we are dealing with 
banks where we have essentially guaranteed the loan. And we 
have sent a letter today to those banks, basically indicating 
that they are to take no further action whatsoever to foreclose 
on farmers; that we are going to work with them to get these 
loans paid off. Now, a question is going to come up if there is 
a prepayment penalty. There may be a prepayment penalty in that 
loan. We are going to ask for documentation of that prepayment 
penalty, and we are going to try to figure out how to deal with 
that. I don't have an answer today. I just know that it is an 
issue that we are going to have to confront and think about.
    And some of these guaranteed loans themselves have been 
sold by the bank, which makes a bit of a complication. But at 
the end of the day, this whole purpose is to try to get this 
done as quickly as possible, as effectively as possible, and to 
provide farmers enough information and outreach so they can 
make informed decisions about their direct loan and the tax 
implications, and we can settle up their guaranteed loan 
without any further disruption.
    The Chairman. Now, very quickly, Mr. Secretary, how much of 
your time personally will be devoted to getting the full $5 
billion out to our Black farmers? How much time will you be 
putting in to that, because I believe if you have that as your 
top agenda, it will speed the process down the line. Because 
you are working it out. There are problems here. Go ahead.
    Secretary Vilsack. I don't have any doubt that my staff 
understands that this is the top of my list in terms of 
priorities. The whole equity issue, the whole equity effort is 
at the top of the list in terms of time that we will spend 
collectively as a team focused on all of these issues, and 
specifically with the debt relief portion of it.
    The Chairman. All right, thank you. I will bring the gavel 
down on myself here.
    I now recognize the distinguished Ranking Member, the 
gentleman from Pennsylvania, Mr. Thompson, for 5 minutes.
    Mr. Thompson. Mr. Chairman, thank you so much.
    First of all, thank you. Thank you for the compelling 
testimony, to each of the witnesses today, your verbal 
testimony, and quite frankly, your written testimony that you 
provided us.
    I want to reach out to Pastor and Mrs. Cotton, and say 
thank you so much for your ministry and how you have really 
focused all aspects of your ministry, as I have gone through 
your testimony. What a blessing. What a blessing. All the work 
that you do, really, and now you are bringing glory and honor 
to God in your work. It is much appreciated.
    In your testimony, you mentioned USDA's Office of 
Partnerships and Public Engagement. Can you elaborate more on 
your experience with the Faith Fellows training that you 
attended in Washington, and how that experience contributed to 
your interactions with the USDA?
    Mrs. Cotton. Absolutely. It was during that Faith Fellows 
training, and it was the inaugural training that nearly every 
department within the USDA was present. Not only did they give 
individual presentations to the entire group, but by the end of 
the 5th day, we all gathered into an auditorium in sections, 
and we could go to those different departments individually to 
ask questions, and they were able to answer those questions. As 
a result, we stayed in contact with them. As we began to 
implement the instructions that they had given us and the 
different suggestions that they had given, we began to 
implement it. We became a 501(c)(3) for a community outreach 
organization. We partnered with land-grant universities, both 
Langston University and OSU. We partnered with Convoy of Hope, 
and other things. But this was as a result. Even Islamic Relief 
USA, we were able to partner with them as a result.
    When we had questions that could not be answered on the 
local level, we could reach out to those people in D.C. And all 
of that was as a result of OPPE.
    Even when information conflicted from here to there, they 
would get involved and help us to resolve. We began to have 
community outreach meetings. We have had, I believe, six to 
date. We partnered with NRCS. We entered into the Conservation 
Program. And everyone who attends our program, as information 
is forwarded to us, we forward that information on to them. We 
field telephone calls, answer questions. And then we attend 
every single meeting that we can on our local, district, state, 
and national level regarding all of these different entities. 
So, we are busy beavers.
    Mr. Thompson. Yes, you are very busy. Thank you for what 
you do. It sounds like it is very successful, those 
partnerships, that collaboration.
    Based on your experience so far into this, we always look 
for opportunities, even when we are getting things right. We 
always try to do better, right? I think we are called to do 
that.
    Mrs. Cotton. Yes, sir.
    Mr. Thompson. Are there any lessons you have learned so far 
on improvements you would recommend on how we could continue to 
develop and maintain those partnerships with Black farmers and 
other socially disadvantaged farmers?
    Mrs. Cotton. Definitely. In most of the community outreach 
meetings, they are conducted by governmental employees and they 
are basically saying the same thing. They come in--I have 
likened it to a USDA infomercial group, because they say 
basically the same thing.
    If other non-governmental employees with organizations who 
have proven records, who maybe possibly could even be trained 
by the government to have--they have a certain trust level that 
is garnered with communities of color and people of color. If 
those outreaches could be conducted by them in partnership with 
land-grant universities, in partnership with active Black 
organizations, farming organizations such as the Oklahoma Black 
Historical Society, and even our own group, to put out these 
community outreach meetings, and then follow through. Because I 
understand that in the USDA, many of the organizations have 
been compiled, joined in, so there are less bodies out in the 
field, and that strain on the local employees is felt with the 
local farmer. We believe that if some sort of pilot program 
could be implemented to help us to be your feet on the ground 
in order to get this information out. We have proven these 
organizations that I have named, including USDA--Langston and 
OSU, they have a good proven record.
    Mr. Thompson. Very effective.
    Well, thank you, Mrs. Cotton and thank you, Mr. Chairman, 
and I yield back.
    The Chairman. Thank you, Ranking Member Thompson. I 
appreciate that.
    I now recognize the gentleman from California, Mr. Costa, 
for 5 minutes.
    Mr. Costa. Thank you very much, Mr. Chairman, for this 
historic hearing with the Agriculture Committee and it is good 
to see you, Secretary Vilsack, my friend. And for all your 
years of service to our country and your commitment today to 
root out racism and discrimination that has been historic, as 
noted by the testimony. What terrific testimony our witnesses 
have provided, and suggestions and advice for legislation that, 
as the Chairman indicated, we will act on.
    In preparation for this hearing, I asked a constituent of 
mine, Mr. Will Scott, President of the African American Farmers 
of California, to provide some testimony, which, Mr. Chairman, 
I ask unanimous consent to submit for the record.
    [The statement referred to is located on p. 322.]
    Mr. Costa. In his testimony, he details a history of 
discrimination from loan denials, as has been stated in the 
testimony earlier, to unequal access to markets, which is a 
problem. But I wanted to realign what really stood out to me. 
Mr. Will Scott, a third-generation farmer like myself and our 
family, he said ``Members of the African American Farmers of 
California are fearful to apply for any loans from the USDA and 
do not want to deal with government, as they fear they will 
lose everything they have.'' That is a sad commentary.
    We all know that farmers are risk takers, but when you have 
to deal with the discrimination that African American farmers 
and other minority farmers have had to deal with, it makes the 
risk taking all that greater. It is clear today from the 
history of discrimination at the USDA that there is still an 
impact.
    I remember Secretary Vilsack talking to President Obama--
and I shared this with John Boyd the other day--that I told 
him--President Obama, I said, ``Farmers are risk takers, but 
they are also price takers, not price makers.'' And President 
Obama is a very smart guy, but he is from the city. He said, 
``Price takers, not price makers. What do you mean?'' I said, 
``When you put all this investment every year into your crop, 
and then at the end of the year you get whatever the price 
is.'' He says, ``I never thought about it that way. Price 
takers, not price makers.''
    Mr. Secretary, it is critical that you work to provide and 
rebuild trust with Black and other socially disadvantaged 
farmers so that American agriculture can better reflect the 
diversity in our country, and our minority populations. In my 
own district, USDA has indicated that we have 14 African 
American farmers, over 76 Native American farmers, 771 Asian 
farmers, many Pacific Asian farmers, over 1,000 Hispanic 
farmers, and over 5,600 Caucasian White farmers. It is 
important to note that out because discrimination is not only 
for African American farmers, but Southeast Asian farmers in my 
district. It is estimated that approximately over the 1,000 
Southeast Asian farmers in the Central Valley, many of them 
Hmong that settled after the Vietnam War, the USDA aid has not 
been there for them. I would like to submit testimony from the 
Asian Pacific Institute of Resources in Fresno, Blong Xiong is 
the Chair of that, detailing the shortcomings on providing 
support for those farmers. And I ask unanimous consent to 
submit that testimony as well, Mr. Chairman.
    [The statement referred to is located on p. 323.]
    Mr. Costa. Mr. Secretary, one of the barriers to access at 
the USDA programs by Black farmers and Southeast Asian farmers, 
Latino farmers in my district seems to be complicated and 
burdensome applications to requirements and the backlog of the 
local Farm Service Agency offices, FSA. Sanford Bishop, my 
colleague--and he is a cardinal and chairs the Subcommittee on 
this--and I have talked about it.
    As part of your efforts to get more aid to socially 
disadvantaged farmers, can you commit to ensuring that local 
FSA offices are properly staffed with the diversity reflected 
by the farmers they serve and have language capabilities?
    Secretary Vilsack. Yes.
    Mr. Costa. That is so important. The previous 
Administration, we complained that there wasn't sufficient 
support in these FSA offices. The testimony we have heard 
already today has indicated that as such. You are going to have 
to focus that, not only for the American Rescue Plan, but to 
really expedite the support for this. We have a backlog in CFAP 
1 of over 4 months already in my own district.
    Secretary Vilsack. Representative, I think there are 
several things to this.
    First, we have to cast a wider net for people to work in 
these local offices. Second, as has been mentioned earlier, we 
need more partnerships and more connections with community 
building organizations that can assist us. As has been 
indicated, there is a trust issue that needs to be addressed.
    Mr. Costa. My time is going to expire, but Mr. Chairman, I 
want to submit a third level of testimony. A staff member, 
Major Henry Munoz, who has just retired and is going to go to 
work for me, dedicated outreach to listen to stories needed for 
socially disadvantaged farmers in my district. I would like to 
submit his report for the record.
    [The report referred to is located on p. 318.]
    The Chairman. The time of the gentleman has expired there. 
Thank you.
    Mr. Costa. I want to submit the testimony. Is that 
possible?
    The Chairman. Yes, that is possible. Thank you. We will 
take it.
    Mr. Costa. Mr. Chairman, I would like you to look at it and 
I will share it with you. Thank you very much, Mr. Chairman.
    The Chairman. You are quite welcome. Thank you, Mr. Costa.
    And now, I recognize the gentleman from Georgia, Mr. Austin 
Scott, for 5 minutes.
    Mr. Austin Scott of Georgia. Thank you, Mr. Chairman, and 
Mrs. Sherrod, Mr. Blanding, and Mr. Rowe are from right down 
the road from where I am. I actually live in Tifton, Georgia.
    Mrs. Sherrod, I don't have a question for you, but I am 
very familiar with what happened to you where somebody changed 
the context of what you said and you lost your job because of 
that, in 2010, and I am glad you won that suit against that 
news organization that ran that false article. I heard what you 
said and I saw what they reported, and I thought they very much 
changed the context.
    Mr. Blanding, I think you are very much right about the 
heirs-related issue. I think that is something that we can work 
on together that has happened, and I hope that some of the 
money that has come through the recent legislation will help 
with that.
    Mr. Rowe, you are obviously a young farmer in Albany, 
Georgia, and I am right down the road in Tifton. If I can ever 
help you please feel free to reach out to us.
    Mr. Boyd, I certainly enjoyed my conversation with you and 
your wife the other day, and as I mentioned to you, to me, some 
of the challenges of the African American farmers, they are not 
limited to African American farmers. It is pretty much all of 
our small farmers, beginning farmers, and I hope as we go 
forward, we are able to look at young, beginning, small, 
regardless of race with regard to how we handle things at the 
USDA, because there are a lot of people out there that need 
help, and we need more farmers, not fewer farmers in the United 
States.
    I told you this, Mr. Boyd. I don't have a question for you, 
but I do have an issue with the language in Section 1005, 
Secretary Vilsack. Can you tell me, Secretary Vilsack, were all 
of the socially disadvantaged farmers included in the relief 
provided in Section 1005?
    Secretary Vilsack. If you are defining socially 
disadvantaged farmers as consistent with the 1990 Act, yes, 
which is based on race and ethnicity. There are other 
definitions----
    Mr. Austin Scott of Georgia. The current definition of a 
socially disadvantaged farmer, can you tell me who is excluded 
from Section 1005 versus the current definition of a socially 
disadvantaged-farmer?
    Secretary Vilsack. I want to make sure I understand your 
question, Congressman. Are you asking me does the provisions of 
the American Rescue Plan Act of 2021 define socially 
disadvantaged, or are you referring to some other definition of 
socially disadvantaged?
    Mr. Austin Scott of Georgia. Secretary Vilsack, the current 
definition, what I am getting at. You are wasting time. The 
current definition of a socially disadvantaged farmer, which 
farmers that are currently eligible for the socially 
disadvantaged farmer loans are not eligible for the relief 
under Section 1005?
    Secretary Vilsack. White women.
    Mr. Austin Scott of Georgia. Yes, sir, that is correct.
    Secretary Vilsack, you are familiar with the case Love v. 
Vilsack?
    Secretary Vilsack. Yes, sir.
    Mr. Austin Scott of Georgia. And so, respectfully, you were 
named not personally, but as Secretary of the USDA, so this is 
not a personal accusation, but there was a settlement with that 
case as well, correct?
    Secretary Vilsack. There was.
    There is a difference. There is a significant difference, 
Congressman, as I suspect you know, between what we dealt with 
in Love and what we are dealing with here.
    Mr. Austin Scott of Georgia. There is, yes, sir, but my 
concern is I think there are a lot of socially disadvantaged 
farmers. I think there are a lot of small farmers. I think 
there are a lot of people that need the help, and my concern is 
when we start to group certain people out because of the color 
of their skin, then it becomes harder to get anything done. If 
it is not equitable and it is not inclusive, then by 
definition, it is discriminatory. And when it is discrimination 
based on the color of someone's skin, then it is racist. That 
is just my personal belief, and I think most people would 
accept that definition.
    So, one last question for you, Secretary Vilsack. Would you 
commit to me that only American farmers would receive relief 
under Section 1005, and not foreign nationals?
    Secretary Vilsack. I can't commit to that, Congressman, 
because that is not what the law that has been passed and 
signed by the President says, as you well know.
    Mr. Austin Scott of Georgia. So, you are going to----
    Secretary Vilsack. Well, let me finish. It is important for 
people to understand that contained within the definitions 
covered by the American Rescue Plan Act of 2021 are people that 
legitimately are entitled to borrow money from the FSA as a 
result of actions that were taken in 1984 when Jesse Helms was 
the Chair of the Agriculture Committee and Ronald Reagan was 
President that opened up the opportunity at USDA to work with 
folks who were not citizens, but who were legitimately here.
    So, to the extent that Congress passing the American Rescue 
Plan Act of 2021 includes all of those folks, that is what I am 
mandated to do and that is what we will do. We will follow the 
law. I would expect that you would want me to do that.
    Mr. Austin Scott of Georgia. You are going to pay off the 
loans for foreign nationals, but you will not pay off the 
loans----
    The Chairman. The time of the gentleman has expired. Thank 
you very much, Mr. Scott, for your questions.
    I now recognize the gentlewoman from North Carolina, Ms. 
Adams, for 5 minutes.
    Ms. Adams. Thank you, Mr. Chairman. Thank you, Ranking 
Member, as well for hosting the hearing today, and to all of 
our witnesses. Thank you for your personal and compelling 
testimony.
    This is, as our Chairman said, a landmark hearing. The need 
for Federal support for Black farmers cannot be overstated. I 
want to just put on the record, I am a proud graduate twice of 
an 1890, North Carolina A&T. But particularly because the most 
recent statistics from USDA make it clear that Black producers 
were not served by the last Administration's COVID relief 
programs. That is why last month I introduced the House version 
of the Justice for Black Farmers Act, H.R. 1393, to address 
discrimination at USDA, to provide debt relief, and to support 
a new generation of Black farmers. It was good to speak with 
you, Secretary, and with you as well, Mr. Boyd, just a day or 2 
ago.
    I am proudly a supporter of the debt forgiveness for 
farmers of color in the American Rescue Plan Act of 2021. Some 
of my colleagues, though, on the other side have raised 
questions about the constitutionality of that provision. But we 
have studied the Constitution. We know that race-based actions 
by the government are subject to strict scrutiny by the courts. 
And in its 1995 Adarand decision, the Supreme Court held that 
government may use race-based remedies that are narrowly 
tailored to respond to the practice and effects of racial 
discrimination. After the Office of Legal Counsel at the 
Department of Justice issued a legal memo which noted that 
Congress may be entitled to deference when it acts on the basis 
of race to remedy the effects of discrimination.
    Mr. Chairman, I ask for unanimous consent to submit for the 
record a copy of that 1995 memo.
    [The memorandum referred to is located on p. 324.]
    Ms. Adams. And that is what we have--thank you--and that is 
what we have in the American Rescue Plan Act of 2021: Congress 
narrowly tailoring legislation to address well-documented 
racial discrimination against farmers of color.
    Mr. Secretary, my question for you--and thank you for your 
testimony. We have been talking about USDA's discrimination 
against Black farmers and other farmers of color for decades 
now. In 1988, Congress tried to address it by requiring USDA to 
set target participation rates for farmers of color in farm 
loan programs, but target participation rates and other 
important programs like the 2501 Program are limited in scope, 
and haven't fully addressed the barriers faced by our Black 
farmers. In the past 5 years, the number of direct farm loans 
to Black producers decreased by nearly 50 percent from 945 to 
460.
    Mr. Secretary, what do you think might account for this 
steep drop in direct farm loans to Black producers, and what 
steps is USDA willing to take to increase that participation?
    Secretary Vilsack. Congresswoman, I am not quite sure why 
during the Trump Administration the number of loans decreased, 
but what I can tell you is I think it is a combination of 
factors that we have to focus on. First, we have to have people 
in the Farm Service Agency offices and in the county committees 
that reflect the population that they serve. When I was 
Secretary the last time, I did, for the first time ever, 
appoint minority members to county committees that did not have 
minority membership. I think that is important that we take a 
look at that county committee structure. I think it is 
important, as I said earlier, to connect with community 
building organizations to make sure that outreach is taking 
place.
    One of the problems with COVID relief is I don't--we are 
pretty convinced that the outreach to the socially 
disadvantaged population was not what it needed to be, which is 
why we announced yesterday as part of the CFAP announcement an 
effort to try to expand outreach and to reopen CFAP 2 to give 
socially disadvantaged farmers greater opportunity to apply. 
So, it is outreach.
    Ms. Adams. Okay, go ahead.
    Secretary Vilsack. I am sorry. It is outreach, and it is 
also accountability. Reports to me directly, keeping an eye on 
precisely how much progress we are making, and if we are not 
making progress, demanding some accountability and reasoning 
why. There is a lot more to this, which I will talk to you 
about offline.
    Ms. Adams. Right. Let me quickly ask you, in the plan, 
Congress provided for a new equity commission to address racial 
discrimination. We do need individuals on the commission who 
bring fresh eyes to the problems, and so, I wanted you to share 
your plans to ensure that congressional and stakeholder input 
would be used in establishing the commission. I am not sure if 
I am out of time.
    Secretary Vilsack. We are going to follow FACA, 
Congresswoman. We are going to make sure that Congress and 
everyone else has an understanding of participation. You can be 
assured that we will follow the rules and regulations of FACA.
    Ms. Adams. Okay, great. Thank you.
    Mr. Chairman, I think I am out of time. I am going to 
submit my other questions to the other witnesses.
    The Chairman. That will be fine.
    I now recognize the gentleman from Tennessee, Mr. 
DesJarlais, for 5 minutes.
    Mr. DesJarlais. Thank you, Mr. Chairman. I thank you for 
holding this important hearing today, and it is always 
disturbing to hear issues of discrimination. I feel for the 
people and the stories that I was told today.
    I did want to mention, there was a comment about Secretary 
Perdue. I am sorry, in Tennessee, everything is in bloom, so 
forgive the voice and the allergies. But Secretary Perdue was a 
great Agriculture Secretary and great to work with, and I think 
when he said that you need to go big, that was probably a 
comment--if you are a mom-and-pop store, it is hard to compete 
against Walmart. If you are a hardware store, it is hard to 
compete against Lowes and Home Depot. And I would just say that 
knowing Secretary Perdue, he did not mean that in any old 
fashion.
    I am also very appreciative to be able to work again with 
Secretary Vilsack. I am much appreciative for him reaching out 
to Members of the Agriculture Committee. Not all Secretaries 
take time to do that, so thank you, Secretary Vilsack, for 
that.
    I think this hearing could have been better today if 
alongside these witnesses were witnesses that were Hispanic and 
other people--anyone who has been discriminated against, 
because farmers of every race, color, national origin, gender, 
and religion are struggling. The U.S. farmers are saddled with 
near-record debt. There is high suicide rate among families and 
farmers who are losing their livelihood.
    It is a little troubling with some of the legislation that 
has been put forth to have to see what is happening, and then 
come back to my district. I can put the camera out my back 
door. There is cattle grazing, there are row crops. It is a 
rural area. There are small farmers, and they are struggling, 
too. It is hard for me to tell them that there is help on the 
way, but only if you are a certain skin color. It seems like 
that is discrimination in itself. And I would think that the 
panelists and witnesses today didn't like the way they were 
treated, and wouldn't want other people to be treated that way, 
either. It seems like what Austin Scott was saying where 
foreign nationalists can get money under this COVID plan, but 
not White women. That would bother a lot of people. I know that 
he didn't get to finish that line of questioning, but 
discrimination in this country is already illegal, as it should 
be, and it is the job of the courts to rule on discrimination 
and award damages, not Congress.
    We saw the $2.3 billion go out to farmers in the Pigford 
settlement with dubious results. Now we have the American 
Rescue Plan Act of 2021 that includes language for loan 
forgiveness for socially disadvantaged farmers, except the ones 
that Austin spoke of, for up to 120 percent of the outstanding 
debt.
    Secretary Vilsack, did you feel that USDA was 
discriminatory while you were the head of the agency under the 
Obama Administration?
    Secretary Vilsack. Congressman, I am certain that there 
were times and circumstances where people who were of color, 
Black producers, Hispanic producers were not treated as fairly 
or as equitably as they should have been when I was Secretary. 
We have over 4,000 offices. We have 100,000 folks working at 
USDA, so I am not surprised if there were circumstances.
    What we did do, however, was we began a process which we 
are going to continue and deepen in cultural transformation so 
that the number of discriminatory actions was reduced and 
ultimately got to zero. We are going to keep a record of EEO 
complaints and program complaints, and make sure that if there 
was a spike in those complaints, we would find out why and take 
action to solve.
    And I will tell you, sir, with all due respect to this 
discussion, I think people are losing sight of the fact that 
the Pigford case was designed to respond to specific acts of 
discrimination and compensate for this. The American Rescue 
Plan Act of 2021 was designed to do two things: first, to deal 
with the cumulative impact of discrimination over time where 
some people had the full range of the suite of programs at USDA 
and were able to grow and expand, and others did not. Just to 
give you an example, CFAP 1 and CFAP 2. Of those who have been 
self-identified Black farmers received $20 million----
    Mr. DesJarlais. I just wanted to finish with I want us all 
to be aware, as we try to unite as a nation, that actions like 
Senator Hirono and Senator Duckworth in the Senate just 
recently said they wouldn't vote for nominees unless they were 
diverse. That is discrimination in itself. We need to get rid 
of all discrimination. We need to come together as a people. I 
hope our panelists agree. That is what Mr. King would have 
wanted, and that is where we need to go. And so, we need to be 
careful of that moving forward.
    I am sorry to interrupt you, sir.
    Thank you, Mr. Chairman. I yield back.
    The Chairman. Thank you so much there for your testimony.
    Let me make this brief announcement before we move to our 
next Member to be recognized. I want to make all of our Members 
aware that the Committee will take a short 15 minute recess 
following this question period with the gentlelady from 
Connecticut, Mrs. Hayes. Immediately after that, we will take a 
15 minute recess, and then we will come back.
    I now recognize the gentlewoman from Connecticut, Mrs. 
Hayes, for her 5 minutes.
    Mrs. Hayes. Good afternoon, Mr. Chairman, and thank you, 
and thank you to all of our witnesses for being here.
    I just want to add that no one on this Committee or in 
Congress woke up and just decided let's send relief only to 
Black farmers or have this hearing. This is the result of years 
of pervasive discrimination and a problem that has existed that 
we in Congress recognize we have an obligation to address. This 
isn't about what Dr. King would have wanted or we are leaving 
other groups out. It is about we are addressing an area of need 
that has gone unaddressed for so many years.
    This is a pervasive problem, even in my district in 
Connecticut, which is not generally seen as an agrarian 
district. But according to the Northeast Farmers of Color Land 
Trust, White landowners currently control about 95 to 98 
percent of the farmland in the United States, and nearly 100 
percent in the Northeast. This stark disparity in land 
ownership is reflected in the demographics of Connecticut 
farmers. Non-White farmers represent just two percent of 
farmers in the state according to our Census Bureau, which is 
an extremely low number when considering non-White communities 
represent nearly 35 percent of the state's overall population.
    I am happy that we are here today brainstorming solutions 
to address this, and not taking the ostrich approach and 
sticking our head in the sand and pretending that the problem 
does not exist.
    My question is for you, Mr. Boyd. Can you speak to the 
disparities between Black farmers and their White counterparts 
in accessing subsidies, capital, and land for their farms?
    Mr. Boyd. Yes, I can, and thank you very much for the 
comments.
    I also would like to take a step back and address the Sonny 
Perdue issue, because I was the one that stated that at the 
meeting I had with him. I do believe that he meant every word 
of it. He also said if you wanted to know where Blacks are, go 
to TSA and look at New York City and Atlanta, Georgia. And 
based on all my experience of meeting with Agriculture 
Secretaries, going back to the Carter Administration, that was 
my very first meeting--my worst meeting in history with the 
Agriculture Secretary.
    As it relates to farm subsidies, 90 percent of all 
subsidies--the top ten percent receive on average $118,000, the 
bottom 80 percent annually in Mecklenburg County, Virginia 
receive about $700 annually. When you look at how we 
participated in the Trump Administration, the $29 billion that 
was doled out in those payments, Black farmers received 0.05 
percent. Those numbers of people are dramatic, and if I can't 
compete as far as staying in the farm subsidy program and 
receive farm subsidies the way that my White counterparts do, I 
can't compete. I can't pay the land rent and so on and so 
forth.
    So, this hasn't just begun, people. This has been going on 
for decades, for decades. When you hear people say about the 
relief that is out there now, Congresswoman, that is--it is a 
new loan program is what I have been watching on the news. This 
is a new loan program that excludes Whites, White farmers. That 
is not true. It is debt relief, and as Secretary Vilsack 
already said, only for those farmers that already have loans on 
the books. It is not a new loan. It doesn't exclude Whites. We 
simply are trying to level the playing field, and the way to do 
that is to have full transparency. By having transparency----
    Mrs. Hayes. Thank you.
    Mr. Boyd. Yes. By having transparency, we can fix a whole 
lot of this.
    Mrs. Hayes. Thank you. I am happy that you mentioned 
transparency. The time goes by so quickly, but the disparities 
that you just highlighted really stress the need for a robust, 
effective civil rights office within the United States 
Department of Agriculture due to this long history of civil 
rights cases being backed up in the USDA.
    With the 2008 Farm Bill, it required a report to Congress 
describing the number of civil rights complaints filed against 
the USDA, the length of time it took to process those 
complaints, and any follow up for the resolution. The average 
complaint was resolved in what amounted to about 6 years. I 
know we really don't have time to address this, but Secretary 
Vilsack, I hope that you can really think about plans for 
improving the process for addressing civil rights cases within 
the USDA, and making sure that we are providing equitable 
access to all farmers. Our job here is to help all farmers, but 
we also have a responsibility to address those areas of 
greatest concern and need, and right now, Black farmers happens 
to be one of those areas.
    With that, Mr. Chairman, I yield back.
    The Chairman. Thank you very much.
    The Committee will now stand in recess until 2:15.
    [Recess.]
    The Chairman. The Committee will now return to order.
    I now recognize the gentlelady from Missouri, Mrs. 
Hartzler, for 5 minutes.
    Mrs. Hartzler. Thank you, Mr. Chairman, for holding this 
hearing. Thank you to all our witnesses. I also want to thank 
Secretary Vilsack for reaching out to us Members of the 
Agriculture Committee to hear our ideas and concerns in 
agriculture and where we need to go. I really appreciate that.
    Mr. Secretary, I want to follow up on some of your comments 
in your opening statement about some of the challenges of 
rolling out this provision, and specifically, I have been 
hearing from some banks--and you did reference that you don't 
know how you are going to deal with the prepayment penalty. But 
I am hearing that banks that originate FSA guaranteed farm 
loans have raised concerns about the unintended consequences 
that the prepayment of these loans will have on lenders, 
including their ability to make and service these loans in the 
future. Can you go into more detail about what USDA is going to 
do to work with these banks to mitigate the costs and to 
provide certainty for our farmers?
    Secretary Vilsack. Well, thank you very much for the 
question. I think the first thing is we need to have a very 
detailed understanding of precisely what concerns they have and 
why they have them. I have asked the team to reach out to and 
to identify those loans that potentially have prepayment 
issues, reach out to the banks, ask for the documentation of 
the prepayment penalties, and begin a conversation and 
discussion in terms of how that is to be handled.
    It is going to take, obviously, a little time to do this, 
but we are going to be focused on making sure we put adequate 
staff behind this effort to get it done, and as I said, as 
quickly as possible, as thoughtfully as possible, and as 
efficiently as possible.
    Mrs. Hartzler. Right. How many of these loans are there 
that you will be forgiving?
    Secretary Vilsack. Well, I don't think we necessarily know 
precisely how many we--I am going to give you a range. Our best 
knowledge and best information today is somewhere between 
13,000 and 15,000 loans that are potentially impacted by this. 
It could be more, it could be less, but I think it is somewhere 
in that neighborhood.
    Mrs. Hartzler. Okay, very good. Thank you so much.
    I wanted to follow up with Philip Haynie. Thank you so much 
for your passionate testimony.
    I was concerned to hear about how you said you can't access 
USDA irrigation funds and you can't participate in land 
leveling programs like other farmers. I just wonder, could you 
share more about what happened or how come you couldn't? What 
happened there?
    Mr. Haynie. Yes, ma'am. Thank you for the question.
    A lot of Black farmers throughout the Delta where there are 
common practices in place for land leveling and irrigation. 
These programs that are issued by USDA NRCS, oftentimes they 
are told they weren't available to them. They are competing 
against neighbors side-by-side, and they often find themselves 
on an island where they are a non-irrigated farm, and they have 
irrigated farmers on all four sides of them.
    So, the practices of putting irrigation on their farms is 
something that needs to be implemented through the USDA, and 
there should be cost-shares allowing for that.
    Mrs. Hartzler. Sure. Could you tell me more though--you 
were told or you know some farmers that were told that these 
aren't available to you?
    Mr. Haynie. Yes, oftentimes farmers go in to apply for 
these programs and they are told that there are no funds 
available to assist them with that. The cost-share that is 
available for the EQIP Program for land leveling and 
irrigation, those funds often dry up, and at the cost of 
implementing these improvements on their farms, they aren't 
able to forebear them, unlike their neighbors who were able to 
get these programs implemented during the crux of 
discrimination at USDA back in the 1980s.
    These farmers are still without, and their neighbors are 
with irrigation right beside them.
    Mrs. Hartzler. Okay. The problem is that the EQIP funds 
have run out when you have gone in and asked, and they didn't 
have the funds available, or the matching requirement was the 
problem. Is that what I am hearing?
    Mr. Haynie. Well, oftentimes farmers are told there are 
funds not available, and that may not be the case. I don't 
think there is enough oversight in that issuance of those 
subsidy programs for land leveling and irrigation for 
improvements on the farm. Oftentimes, that pot runs out of 
money very soon and farmers have to wait for it to be refilled.
    Mrs. Hartzler. Got you.
    Mr. Haynie. Thank you.
    Mrs. Hartzler. Yes, thank you. I think that is really 
helpful we get to the bottom of what is being alleged happened 
here.
    I wanted to ask Mr. Boyd--well, I only have 12 seconds. 
Okay. I appreciate y'all's testimony.
    Thank you. I yield back.
    The Chairman. Thank you very much.
    I now recognize the gentlelady from Maine, Ms. Pingree, for 
5 minutes.
    Ms. Pingree. Thank you so much, Mr. Chairman, and thank you 
to the witnesses.
    I have actually been in one of my other committees, so I 
have missed all of your wonderful questions and answers, but I 
really do appreciate that you are all here, and I certainly 
appreciated reading your testimony.
    Mr. Rowe, I am particularly interested in you being an 
organic farmer, and I know that you are very focused on soil 
health and carbon sequestration, which is certainly a topic of 
this Committee and one moving forward.
    As the USDA considers possible initiatives to encourage 
farmers to adopt climate-friendly practices, what 
recommendations would you make to Secretary Vilsack or the 
Members of this Committee to make sure that you and other Black 
farmers are able to benefit?
    Mr. Rowe. Okay. Can you repeat that question one more time? 
Can you repeat the question one more time?
    Ms. Pingree. Oh, absolutely. As you are an organic farmer, 
I know you are very focused and you have educational background 
in soil health, and because this Committee is focused on soil 
health and carbon sequestration and some interesting new 
initiatives to encourage farmers to adopt climate-friendly 
practices, I am wondering what recommendations you would make 
to the Secretary and to this Committee to make sure that you 
and other Black farmers are able to benefit from future 
initiatives?
    Mr. Rowe. Okay. In order for you to obtain your 
certification to be organic certified, you have to follow 
strict guidelines on how--what you put into your soil, what 
equipment used and stuff like that. I feel like if you apply 
that to farming, period, it would help with a lot of the stuff 
when it comes to, like, climate change, just because the carbon 
that comes out of the soil, organic practices are a way to make 
sure we are staying healthy, and also keeping the environment 
healthy. As you know, conventional farming takes a lot of 
chemicals and a lot of stuff to make stuff grow. But that 
affects us as humans, it affects the air, and the pollution, 
and stuff like that. I would recommend more observing the 
organic standards and qualifications you need to be organic 
certified. That is something that I can--if I had something 
just to say, that would be my opinion on it.
    Ms. Pingree. Great. Thank you. I have spent some time as a 
certified organic farmer, so I certainly sympathize with the 
challenges and the expenses of facing that so more support is 
important.
    Secretary Vilsack, I am sorry I have not been able to hear 
most of the hearing, but I did hear your opening remarks and I 
do appreciate you returning, particularly at such a challenging 
time. Welcome back as Secretary, again, for Agriculture.
    I know a lot of your agenda will be around some very 
interesting climate initiatives, soil health, the whole variety 
of things that you have already talked about. How do you make 
sure that small to medium-sized farmers, and particularly Black 
farmers, are able to participate and this doesn't just become 
another program that only applies to the large farmers or those 
that have the means to apply for a grant or any of the 
complications that might get in the way?
    Secretary Vilsack. Quickly, I would respond three ways. 
First, I have Dr. Dewayne Goldmon in my office now as the 
Senior Advisor on Equity. Part of his responsibility is to put 
an equity lens on everything that we do, and to encourage those 
who are developing these programs to make sure that there is an 
equity lens when the program is being developed.
    Second, is to make sure that we are keeping track of the 
resources that are being allocated in various programs, and how 
much of it is, in fact, going to socially disadvantaged 
producers. If we see, as we saw with COVID, some imbalance, we 
can obviously make corrections. We can ask questions about 
that.
    I think it is also important for us to have partners who 
can help us with outreach. Sometimes, it is not that people 
don't want to help, it is that people don't know that they need 
the help or don't know where to go to get the help. As has been 
indicated earlier, there is a trust issue. I think we have to 
build trust, and I think the way to do that is by connecting 
ourselves with community building organizations that are 
already trusted to get the word out.
    I think it is also making sure that as we put our budgets 
together, we look at places and programs that we know will be 
most helpful. One of the purposes of this hearing--I am taking 
notes right now on the suggestions that people are making. 
Obviously, that is going to impact and affect as we make future 
budget decisions. It is a combination of all of those things 
and basically saying to the folks--and I will end with this. 
Basically saying to your team this is a priority, and it needs 
to be reflected in every decision you make. You need to be able 
to justify and explain how equity has been applied. The 
President has been very clear about this. It is his expectation 
that everything we do at USDA is done through an equity lens, 
and I think that is a fair point and one that we are looking 
forward to doing.
    Ms. Pingree. Well, I certainly appreciate your answer 
there, and the importance of all of the points that you have 
mentioned, particularly around outreach, because we often find 
that people have no idea that there are programs out there that 
would benefit them. But also, I think the USDA having that 
lens, we often write into a program that there should be a set 
aside for this or a set aside for that, but clearly, it is 
going to be far more effective if the USDA sees that as their 
responsibility to make sure that the distribution is fair, and 
particularly that underserved farmers have those opportunities.
    I only have 7 seconds, so I will yield back.
    Secretary Vilsack. Congresswoman, we will also get some 
suggestions from the Equity Commission in terms of overall 
structure and strategy. That will be helpful as well.
    Ms. Pingree. Great. Well, thank you so much.
    The Chairman. Thank you.
    I now recognize the gentleman from Illinois, Mr. Davis, for 
5 minutes.
    Mr. Davis. Thank you, Chairman Scott and Ranking Member 
Thompson, and thank you to the witnesses and my good friend, 
Secretary Vilsack, for being here today to discuss the impact 
of racism in the United States and the work we must continue to 
do to ensure there is equity across programs at the USDA.
    As a former Chair of the Subcommittee on Biotechnology, 
Horticulture, and Research, I have spent a lot of my time in 
Congress focused on the importance of our ag research and 
extension programs, which should help serve farmers across the 
board, and particularly minority and socially disadvantaged 
farmers. I appreciate the opportunity to discuss how we can 
work to bolster extension programs, those that help serve 
minority and socially disadvantaged farmers, in a way that 
decreases barriers to access and increases participation in 
USDA programs.
    Mr. Rowe, thank you for being here today and for sharing 
your experiences as a Black organic farmer. I was particularly 
interested in your experience in navigating the new hemp 
program, along with other USDA organic programs, which have 
proved challenging for so many. Can you please share more 
regarding the unique challenges you faced trying to navigate 
the hemp program, specifically in light of the 2018 Farm Bill, 
and what you need from us and the Department to ensure you have 
certainty and access to profitable markets?
    Mr. Rowe. Okay. It was a challenge doing the hemp because, 
as you know, Georgia just got, we were just able to grow 
organic hemp, or hemp in general. And a lot of farmers are 
uneducated on it. Government assistance doesn't have a lot of 
research on it also, so working with universities and doing 
research on this new crop that just, that Georgia is just now 
growing will also be helpful.
    Some of the things that I was--as growing hemp my first 
year, I knew as far as, like, diseases or what variety would 
grow. Things like that a farmer didn't know, so having those 
land-grant and research available for farmers to be able to 
reach out. I know Fort Valley State University does a lot of 
field research. Like they will have a field day where they will 
do a particular crop and explain how to grow it, what it takes, 
and all of that. If we could get something like that 
implemented with the hemp program, it would be very helpful 
because there is less knowledge on this new crop that just came 
into Georgia.
    Mr. Davis. Thank you, Mr. Rowe. I would be interested in 
keeping a working relationship with you as we move forward to 
identify any other problems that you are experiencing in the 
organic sector.
    Secretary Vilsack, hey, great to see you again. I just 
wanted to make sure that you and I have chatted about the work 
across agencies and with the FDA that is needed to ensure that 
we are providing regulatory certainty for hemp and organic 
farmers, including Black, minority, and socially disadvantaged 
farmers.
    Secretary Vilsack. Well, Congressman, I think our first 
order we have to have our own house in order in terms of being 
able to work effectively with other agencies, which is why it 
was important for us to get the hemp rule out. It had been 
stuck for a while. We are doing that. We are now in a position 
to reach across to HHS and FDA to make sure that there is a 
coordination. And frankly, you mentioned biotechnology. There 
is obviously a need for us to coordinate effectively with both 
FDA and EPA, and I expect to do that. We have to have a 
process.
    I would say in this day and age, with change rapidly 
occurring so quickly, our regulatory processes have to keep 
pace with the pace of change, and frankly, sometimes we 
basically slow innovation down because our regulatory process 
is not communicating effectively between agencies. That is 
something we need to work on.
    Mr. Davis. Well, thank you, sir, for that, and welcome 
back. As I told you before, I look forward to working with you 
again and congratulations on getting back into the USDA one 
more time.
    Secretary Vilsack. Thank you, sir.
    Mr. Davis. I yield back, Mr. Chairman.
    The Chairman. Thank you very much.
    I now recognize the gentlelady from New Hampshire, Ms. 
Kuster, for 5 minutes. I think you may be muted.
    Ms. Kuster. I am just trying to get my mute off here. Thank 
you, Mr. Chairman. And Secretary Vilsack, we appreciate you 
being here. Thank you for all the work that you are doing, and 
I am grateful for the farmers and producers on the panel for 
coming forward to share all of your challenges and insights.
    Our country is in the midst of a reckoning on racial 
justice and addressing systemic racism, and I think that is the 
difference. This is not a question of simply prejudice or 
discrimination. We need to go back to the beginning and the 
racism since slavery that has led to Black farmers not even 
being able to show title to their land.
    This past year has not only brought a global pandemic, but 
countless painful reminders that we still have so much work 
ahead of us on equality and justice here in America, and as has 
been discussed today, we have a glaring problem when it comes 
to American agriculture. Instead of improving, the number of 
Black farmers in our country and the amount of land they own 
has shrunken dramatically and continues to decline, and we need 
to ask why and make changes that will turn that trend around. 
It is incumbent on Congress and the USDA to reverse this trend, 
and ensure that our agriculture sector is diverse, and that 
every single farmer and producer is treated with fairness and 
equality.
    So, let's make it clear. If Black farmers and socially 
disadvantaged farmers are systematically driven out of our 
culture, there would be horrible consequences for consumers and 
growers across the country. We have to right these wrongs and 
move forward together.
    Mrs. Sherrod, as you noted in your testimony, Black farmers 
are still impacted by discrimination because government 
payments are tied to production. Systemic discrimination has 
resulted in Black-owned farms being smaller than White farms, 
so Black farmers typically receive smaller government payments. 
From your experience, how can Congress help level the playing 
field and make sure that Black farmers with smaller operations 
aren't penalized when it comes to applying to the USDA?
    The Chairman. You may need to unmute.
    Ms. Kuster. Mrs. Sherrod? Did it go--no, I am sorry. That 
was for Mrs. Sherrod.
    The Chairman. Is it Sherrod, you mean?
    Ms. Kuster. Mrs. Sherrod, yes, I am sorry.
    The Chairman. All right. You may need to unmute. Okay. You 
got it, Mrs. Sherrod.
    Mrs. Sherrod. Okay. Can you hear me?
    The Chairman. Yes, we can.
    Mrs. Sherrod. All right. Let me say that, are we still 
muted?
    The Chairman. No, you are----
    Ms. Kuster. No, you are good. We can hear you.
    The Chairman. Now you are muted. Go back to where you were.
    Mrs. Sherrod. Okay. Okay. Let me say that I have worked on 
this issue for many, many years, almost 56 years. I have 
actually gone from a period when I had to go in the office with 
farmers because they were afraid to go--they couldn't speak up 
for themselves, and I could speak for them and I could help 
represent them. What that has done is in addition to farmers 
trying and being denied, they don't feel there is a place for 
them to go. We have to go back and try to help farmers 
understand that this agency is there for them, because so many 
of them think that is not the case. Many of them think like one 
of my grandfathers, when he had the opportunity to try to apply 
for money, he said I have never borrowed money from Farmers 
Home Administration, because it is just a way to take a Black 
farmer's land. That has proven to be true.
    You were breaking up so I didn't hear all of your question, 
but let me say, we have to go back and make people feel that 
this is a place they can come to for help.
    Ms. Kuster. Great. Well, thank you so much.
    Mr. Boyd, could you speak to the unique challenges that you 
have seen Black farmers with smaller farms face when it comes 
to ensuring that their land can be passed to the next 
generation?
    Mr. Boyd. Yes, this has been a difficult task. One of the 
challenges is access to credit. Black farmers simply don't have 
access to credit. USDA has been played into that, and also the 
top ten banks, and we haven't got to talk about corporate 
America and the discrimination that Black farmers face there in 
companies like Monsanto, John Deere, PepsiCo, all have failed 
to deliver contracts and services to Black farmers. These are 
things that are coupled all together that has affected us.
    USDA certificates of liens that was on my property when I 
had debt relief at the United States Department of--I was one 
of the first Black farmers to be offered debt relief in the 
settlement agreement. Those liens remained----
    The Chairman. The time of the----
    Mr. Boyd.--on my farm for over 20 years until we were able 
to try to purchase another farm. We had to hire a law firm to 
get those liens off of my farm.
    The Chairman. Yes. The time of the gentlelady has expired.
    Ms. Kuster. Thank you. I yield back, Mr. Chairman.
    The Chairman. Thank you for your comments. I appreciate 
them, Mr. Boyd and Ms. Kuster.
    I know recognize the gentleman from Nebraska, Mr. Bacon, 
for his 5 minutes.
    Mr. Bacon. Thank you, Mr. Chairman. I appreciate the 
panelists today and each of you. We appreciate reaching out 
across the aisle. I also appreciated the opportunity to meet 
with John Boyd.
    There is no doubt that our African American farmers 
following reconstruction were faced with discrimination and 
prejudice extending for over a century.
    Mrs. Sherrod, your testimony mentions that the Pigford 
settlement did not bring about systematic change. Deep rooted 
changes to a system or an agency do take time. Have there been 
any improvements, to your knowledge, that can lead to the 
systematic change that you are referencing? Thank you.
    Mr. Boyd. Basically, what the lawsuit did was really bring 
about discrimination issues to the Department of Agriculture, 
but many of the issues that we were--that was a part of the 
lawsuit never went to Black farmers, such as injunctive relief 
such as debt write down, land out of Federal inventory. None of 
the farmers received those things, and that is why it is 
vitally important that we have this measure.
    So many people think that it is a new issue. It is not a 
new issue. We asked for debt relief in the actual lawsuit, and 
also, we need transparency. If we want to fix any of this, we 
need transparency to see who is getting what, and what 
programs, such as farm subsidies. If we had those real numbers, 
this hearing would be a lot clearer today. We would be able to 
say this race received this amount of subsidies. Black farmers 
received this amount. We need full transparency, and for those 
Committee Members that are here today, we should really take a 
pretty good look at that.
    And also, those persons who were found guilty of 
discrimination were never fired or penalized. As you heard Mrs. 
Sherrod testify, she was the only one who got fired. How in the 
world can you have two settlements and all of those people that 
were investigated that were found guilty of discrimination, and 
nobody was fired? And that is a shame for the taxpayers who had 
to pay for that. We need to look at those people who--past and 
present who are still working at USDA, 30 year bureaucrats who 
still have their jobs. Black farmers lost their land and farms, 
but these people still have their jobs.
    I would like to work with the Committee to move forward on 
a transparency measure.
    Mr. Bacon. Thank you, Mr. Boyd.
    I was also asking Mrs. Sherrod if she sees the systematic 
change that does take a long time to do. Is she seeing progress 
in the systematic change in the agencies she is working in?
    Mrs. Sherrod. Let me say that there, there has been some 
change, but not nearly enough to make up for what has been 
done. And if you keep messing with someone and they keep 
getting hurt, they eventually stop going in that direction. We 
have so many farmers who need to go to the agency and they 
can't and don't feel they should go to the agency because they 
have never been able to get help there. And if it were not for 
groups like us, even working with Mr. Sedrick Rowe and others 
to try to help navigate that for them, there is just no way 
they will ever get help.
    The culture there is changing some, because I have been at 
this 50+ years, but I haven't seen enough change.
    Mr. Bacon. Well, thank you, Mrs. Sherrod, and I think you 
have a good point. If your grandfather tells you something and 
your father tells you something, you learn not to do so.
    With my remaining minute, I got another follow-up for Mr. 
Boyd. You highlighted the need to improve technical assistance 
and outreach to Black farmers. Are you starting to see that 
now? Are we making progress there? Thank you.
    Mr. Boyd. I believe that--and thank you, Congressman, for 
the question. I believe that the mechanism that is on the table 
right now in the Farmers of Color Act, the $1 billion, the 
Secretary and his team should reach out and work with 
organizations like the National Black Farmers Association and 
all of the other panelists that are here today. We have a 
unique opportunity to fix outreach and technical assistance in 
this measure, something that has been lacking, as you heard my 
colleagues testify to, in the Section 2501 Program. This is the 
opportunity right now to fix that. Where organizations like 
ours, we need resources. Since this bill has been announced, 
our phones are ringing off the hook for farmers that are 
looking for direction. They want to know how this debt relief 
is going to be paid out, how it is going to apply to them, and 
we haven't heard enough yet from the Administration. I would 
like to ask Secretary Vilsack--he mentioned the Commission. Who 
is going to be on the Commission?
    The Chairman. The gentleman's time has expired.
    I now recognize the gentlewoman from Illinois, Mrs. Bustos, 
for 5 minutes.
    Mrs. Bustos. Thank you so much, Chairman Scott, and let me 
just say thank you for holding this very, very important 
hearing today. I want to thank all of our witnesses. You have 
all done a wonderful job. Mr. Secretary, thank you for being 
here.
    I want to start out with a question for you, sir, and I 
actually am going to use some facts that Mr. Boyd shared in his 
opening statement. Thank you, Mr. Boyd, for laying the picture 
out for what Black farmers in America have gone through. The 
numbers have fallen dramatically. As Mr. Boyd pointed out, from 
900,000 in 1920 to less than 50,000 today. Mr. Boyd also 
pointed out that the amount of land that is farmed by Black 
farmers has fallen from 41 million acres to less than 5 million 
acres today. So, again, Mr. Boyd, thank you for laying that 
out. It helps us get an understanding that we got something 
going wrong here.
    Secretary Vilsack, if I may, what steps can Congress take 
to help you at the Department of Agriculture to ensure that 
Black farmers get involved in and remain in agriculture?
    Secretary Vilsack. Well, I think you have taken a very 
important and first step with the American Rescue Plan Act of 
2021. The debt relief process, as we have talked about, is an 
important step. The Equity Commission which we will set up 
pursuant to congressional directive with the FACA, we have to 
go through that process to get committee members appointed, is 
going to be very helpful to identify systemic barriers that 
exist from an external view. We have a working group inside 
USDA focused on internally examining this.
    I think Mr. Boyd is right about the $1 billion. There is 
tremendous opportunity there, not only to improve outreach, but 
also to look at ways in which we can do better marketing 
assistance for farmers in that local and regional food system 
that they need to be part of, and also creating opportunities 
potentially for more market opportunities and more land access. 
I think Congress could help us by talking to other Federal 
agencies, in addition to the USDA, that have land ownership. I 
am thinking of the Department of Defense, for example. They 
have a lot of land that surrounds a lot of the military 
installations. A lot of that land is in rural communities. A 
lot of that land is farmable. Where and who do they have 
farming that land? Can that be something that could potentially 
be made available to minority and socially disadvantaged and 
beginning farmers? That is one thing I think Congress could 
ask. And certainly to the extent that you would provide the 
resources for us at USDA, our budgets over the course of the 
last several years have been cut, which makes it harder for us 
to have the people and the personnel necessary to do the job. 
Hopefully we will see some additional support and help on the 
operations side of the budget.
    Mrs. Bustos. Thank you, Mr. Secretary, and I appreciate 
that innovative approach that we could take a look at.
    So, we know that obviously--again, this has been spelled 
out very clearly. We need to do more to level the playing field 
between Black farmers and White farmers, including greater 
transparency in subsidy and loan programs. That has been 
discussed today. We need to improve access to land, as you just 
talked about, Mr. Secretary, and credit and improve our 
outreach to Black farmers. You just laid that out very nicely.
    I am lucky enough to be Chair of the General Farm 
Commodities and Risk Management Subcommittee this congressional 
session, and I know that these are all issues that important to 
me as we get to work on our agenda this Congress and gear up 
for the next farm bill.
    So, this question is actually to whoever would like to 
answer it among the panelists, and Mr. Boyd, I am going to ask 
you to start. But what have your experiences been with the 
commodity programs at USDA? Again, this falls under the 
Subcommittee that I will be chairing. And the second part of 
that is what steps can Congress take to ensure that Black 
farmers feel welcome at the USDA?
    Mr. Boyd. Well, one thing I would do--and I have said this 
to every Member of Congress--and thank you for taking the time 
to speak with me the other day----
    Mrs. Bustos. Thank you.
    Mr. Boyd. Is that, Mr. Secretary, Black farmers need to 
hear from you, that USDA is open for business for Black 
farmers, open for business for farmers of color, Native 
American, women, all of these persons of color. Make that 
announcement and make it with conviction, because we are going 
to have to get Black farmers reintegrated back into USDA, 
because as you heard Mrs. Sherrod and my other colleagues say 
today, Black farmers don't trust the United States Department 
of Agriculture, which has really hurt us in participation, and 
it is because of all the discrimination that I and others have 
faced. And we also need to do more to get new and beginning 
farmers into farm programs at USDA, and remove the 3 year 
requirement so that Black farmers and other new and beginning 
farmers can actually take part into the USDA programs there.
    Removing that 3 year barrier has been a big problem, and I 
would like to work with you guys to remove that.
    Mrs. Bustos. I wish I had time to listen to everybody, but 
my time has expired.
    Secretary Vilsack, I do want to follow up on your idea with 
the Department of Defense.
    Thank you, Mr. Chairman, and I yield back.
    The Chairman. Absolutely.
    I now recognize the gentleman from Indiana, Mr. Baird, for 
5 minutes.
    Mr. Baird. Thank you, Mr. Chairman, and thank you Ranking 
Member Thompson for putting on this informative hearing.
    I am going to start with the Office of Partnerships and 
Public Engagement, and mention that they hosted last year 50 
statewide community prosperity summits to folks on solutions to 
challenges facing rural and underserved communities, and 
connect them to the education, tools, and resources available 
to them through the USDA programs and initiatives.
    In 2020, as an example, they connected hundreds of faith-
based as well as youth as well as military and community 
organizations to distributors to form partnerships through the 
Farmers to Families Food Box Program during COVID-19.
    I guess my first question is going to go Mr. and Mrs. 
Cotton. In your testimony, you mentioned USDA's Office of 
Partnerships and Public Engagement. Can you elaborate more on 
your experience with the Faith Fellows training you attended in 
Washington, D.C., and how that experience contributed to your 
interactions with the USDA, Mr. and Mrs. Cotton?
    Mrs. Cotton. Well, thank you, sir, for this opportunity and 
the question.
    By being at the Faith Fellows inaugural training, we met 
the Convoy of Hope. We also met City Serve. We also met Islamic 
Relief USA. We met those various organizations. When we came 
back to Oklahoma, we reached out to Convoy of Hope and then 
subsequently had meetings with them. After those meetings, then 
we rented us a big semi-truck and we drove to Missouri to pick 
up our first food.
    In the interim, as we began to distribute food, we learned 
that there was a hub here in Oklahoma called NorthStar Bridge 
for Convoy of Hope, and from NorthStar Bridge, we began to pick 
up food. First in a car, then a truck, then a horse trailer, 
14, then a 20 horse trailer. After the Farmers to Families 
Food Box Program started, NorthStar Bridge saw that we were 
serious about helping our community. They began to distribute 
trucks to us. We were receiving up to four semi-trucks a week 
in our small rural area.
    The people come because we have been consistent. They come 
because they trust. There has not been any training in what we 
do. We have been in the service of the Lord for most of our 
lives. It is just reaching people, helping people, being humble 
servants.
    And so, because the government realized that faith-based 
entities are the bottom kind of rung of the ladder for 
individuals who have their trust in someone, they began to use 
the Faith Fellows as a pinpoint for these activities. The thing 
of it is, is that it was a truck to trunk program, and often, 
the vendors across the U.S., as they received these fundings to 
distribute the food, were sending it out but that last mile 
delivery, the people were not realizing any financial help from 
it.
    Today, as a matter of fact, we canceled two semi-trucks so 
that we can be here today, all right? Tomorrow, we will have a 
once-a-month senior program that we will distribute food there. 
But this has created great opportunities for us to continue to 
figure out how in the world we can get from busyness to actual 
business in reaching our communities. My husband just said 
community togetherness. In our community, the testimonies are a 
mile long. That is basically what we have to offer on that.
    Mr. Baird. Thank you.
    Secretary Vilsack, would you care to comment about the 
Office of Partnerships and Public Engagement? I think you made 
reference to that earlier. I can give you an opportunity to--we 
have about 37 seconds, so----
    Secretary Vilsack. Well, it is an important integral part 
of our effort to improve outreach, but I think we have to do 
more in that area and we have to basically cast a much wider 
net in terms of the partnerships that we are developing. I 
think the opportunity for us at USDA starts with historically 
Black colleges and minority-serving institutions, because they 
have an incredible network and I think we need to tap into that 
network more effectively and more efficiently than we have in 
the past. That is where I would start.
    Mr. Baird. I have about 4 seconds left, and I just have to 
put a plug in for the land-grant universities and the 
cooperative extension service, because they played a vital role 
over the years in making sure we got the research information 
out to these rural communities.
    And I know, Mr. Chairman, you are ready to put the hammer 
on because I have reached my time, so thank you. I yield back.
    The Chairman. I appreciate the gentleman realizing his time 
had expired.
    I now recognize the gentlelady from the United States 
Virgin Islands, Ms. Plaskett, for 5 minutes.
    Ms. Plaskett. Thank you very much, Mr. Chairman, and thank 
you to all of our witnesses for being here today, and 
particularly, thank you, Secretary Vilsack, for your commitment 
to the issues that we are addressing in this hearing, which has 
long been overdue at the full Committee level. I want to also 
just applaud my colleagues for their patience and their 
steadfastness, and getting to the meat of the issues here in 
this hearing.
    Secretary Vilsack, one of the questions that I have is 
related to the Coronavirus Food Assistance Program and CFAP 2 
payments, which have been successfully compensated all 
producers, at least partially, who have experienced unexpected 
economic loss of costs due to the COVID-19 during the second 
through fourth quarters of 2020. Are we aware or what are the 
mechanisms and data that we have for--to know if CFAP 2 funds 
have been distributed in a fair manner to every producer and 
for every commodity sector that experienced COVID-19 related 
costs? I ask that question in particular as you have shown 
through your quick appointment to agriculture the disparity in 
distribution to Black farmers in the other funding.
    Secretary Vilsack. If you take a look at the payments that 
have been made to those who have self-identified as White, 
Black, and other socially disadvantaged categories, in CFAP 1 
and CFAP 2, Black farmers would have received approximately $20 
to $21 million. White men and women farmers would have received 
$5.6 billion. That is why I think that one of the things that 
you did in the American Rescue Plan was to essentially 
understand and appreciate the disparity in terms of how the 
COVID relief was distributed in terms of how much went to White 
farmers and how much went to socially disadvantaged farmers. 
And part of what you have done is you basically created a 
better sense of balance, if you will, in the COVID relief 
efforts. We tried to complement that recently with the 
announcement that we are going to additional outreach on CFAP 2 
to make sure that those socially disadvantaged producers that 
have not yet applied for the ability to participate in the 
program are given a 60 day opportunity to do so. And the hope 
is with additional outreach, that we will see more applications 
from socially disadvantaged producers.
    Ms. Plaskett. Thank you.
    As follow-up to that question, sir, Mr. Secretary, with 
this debt relief that has been provided for Black farmers, is 
there an assumption or shouldn't there be an assumption that 
other tacit forms of discrimination at the Department need to 
be corrected, and what is being done to identify what those 
other areas might have been, and how they can be rectified and 
monitored?
    Secretary Vilsack. Well, there are three parts to the 
American Rescue Plan Act of 2021. We talked about debt relief 
and we have also talked about the billion dollars that could 
potentially increase outreach, land access, and financial 
marketing.
    The third element is the Equity Commission, and this 
Commission is going to be an external commission that is going 
to take a detailed look at every single aspect of USDA's 
activities to determine and to identify those systemic barriers 
that may exist and the way in which programs are operated.
    At the same time that that is going on, we are also going 
to have, pursuant to President Biden's Executive Order, an 
internal review. We already have a working group that has been 
established. They have already begun the process of assessing 
our benefits, our services, our contracts, and our 
procurements. I would put particular emphasis in response to 
your question on the issue of contracts and procurements as we 
are looking at ways of increasing marketing opportunities, 
especially for small and mid-sized operators, for socially 
disadvantaged farmers, for beginning farmers, the opportunity 
to use Federal purchasing power, the procurement power of the 
Federal Government may be a strategy that will provide some 
quick wins, if you will, in terms of market access. And that is 
something I hope our team will be taking a very close look at.
    Ms. Plaskett. Thank you.
    And as a final thought, in having conversations with some 
of the witnesses prior to the hearing today, I am particularly 
moved by and concerned with regard to discussions with Mr. Boyd 
where he talked about not necessarily just at the Department of 
Agriculture, but in the whole life cycle of Black farming, 
issues of access to farm credit, to bank loans, even to have 
those companies who they rely on for equipment to have 
different policies and leverages for Black farmers than they do 
for others. Have you been thinking of or would you be willing 
to sit with us as legislators to come up with ways to both 
incentivize those organizations and those outside and private 
entities to support Black farming, to grow it, as well as to 
find ways to enforce Federal law against discrimination and to 
support them?
    The Chairman. The gentlelady's time has expired.
    I now recognize the----
    Ms. Plaskett. May he answer the question, Mr. Chairman?
    The Chairman.--gentleman from South Dakota.
    Secretary Vilsack. Mr. Chairman, I will just respond yes to 
your question, Congresswoman.
    Ms. Plaskett. Thank you.
    The Chairman. Yes, and also, Mr. Secretary, you can respond 
more in writing for the record.
    I apologize to everyone, but we are trying to get everyone 
in, and so, I hope you will help me here. I want to hear from 
everybody, too. And perhaps, Mr. Boyd can relate to your 
question when he is recognized again.
    Thank you for your consideration, Members.
    I now recognize the gentleman from South Dakota, Mr. 
Johnson, for 5 minutes.
    Mr. Johnson. Thank you very much, Mr. Chairman, and I will 
direct my comments and questions to Secretary Vilsack.
    I would first note, sir, that you have invested a 
remarkable amount of time already in speaking with me and other 
Members of the Committee since you were sworn in, so thanks for 
that. I think it shows an authenticity and an earnestness on 
your part to do this work together, and I think this Committee 
hearing has been fantastic as we talk about how to make sure 
that we are serving all of agriculture and all producers. It 
has been a wonderful hearing.
    And in that vein, I want to call out and commend USDA, sir, 
for the appointment of Zach Ducheneaux as Administrator of the 
Farm Service Agency. Mr. Ducheneaux has been an incredible 
advocate for South Dakota agriculture, for Tribal agriculture, 
for socially disadvantaged farmers. He is an enrolled member at 
Cheyenne River, and he is going to be really good at the job. 
And so, thank you to USDA for walking your interest in 
diversity, sir, on that front.
    The one question I have for you, Mr. Secretary, follows up 
on my March 3 letter and gives you a little real time update 
related to my concerns with the U.S. Forest Service 
recommendation to reduce the Timber Sale Program. And there is 
a real impact here on socially disadvantaged people, because a 
huge portion of the forestry workers who are impacted are 
Latino and Latina. And the update is just this week in Hill 
City, and that is a town of about 1,000 in the Black Hills of 
South Dakota, a large sawmill has announced that it is closing. 
Forty percent of those 120 employees are Hispanic. That comes 
the same week that we have the Forest Service announce via a 
general technical report that they think that the timber 
harvest coming out of the Black Hills should be reduced by 50 
or 60 percent. And we know that when you lose those jobs from 
socially disadvantaged people in forestry, in timber, they are 
highly unlikely to come back. That capacity doesn't come back 
very easily. We have seen that across the country.
    And so, I just want to make sure, sir, that that is on your 
front burner, and just asking for a commitment to work with you 
and the Forest Service in continuing to analyze the science 
behind these studies. We want to make sure that when we have 
socially disadvantaged employees, they have an opportunity to 
keep those good paying jobs and help out their communities. Any 
thoughts, sir?
    Secretary Vilsack. Congressman, I certainly appreciate the 
importance of outreach and connection with stakeholders who 
have a strong interest, as you have expressed, in the Black 
Hills. I would hope that our Forest Service--and I believe our 
Forest Service will continue to be engaged in continued 
collaboration.
    As you have indicated, the scientists from the Northern 
Research Station's Forest Inventory and Analysis program 
recently concluded their study. I would point out that this is 
a scientific document. It is not a policy or decision document, 
so I think it is important to note that to your point of 
whether or not there are other considerations or other science 
or other information that needs to be considered. Obviously, I 
think we need to take everything into consideration before any 
specific decisions are made.
    It is a large body of science, obviously, that is now 
available to managers in the Black Hills. They can take a look 
at it. They can respond to it. They can react to it, and then 
it will give us the opportunity to sort of take into 
consideration as we finalize the general technical report. 
Hopefully, folks are going to provide us the input necessary 
for us to ultimately make the very best decision for folks in 
that area.
    Let me just simply say, however, this is a very difficult 
issue generally, this issue of timber and this issue of timber 
sales and mills. And we have to figure out ways in which we can 
increase market opportunity for forest and wood products across 
the board. Whether it is using cross-laminated timber to build 
tall buildings, or some other mechanism, because we want to 
make sure that we maintain the carbon that is stored in those 
trees as opposed to, unfortunately and tragically, watching too 
much of it burn up in fires that we have seen that have been 
historic.
    Mr. Johnson. I think that is well said, sir, and we know 
that a managed forest is a healthy forest. I liked your 
problem-solving approach.
    With the time that I have left, I will just note that you 
are right. It is a scientific document. I think there is an 
opportunity for entrepreneurial policymakers like you and me to 
try and find some different solutions. For instance, that 
scientific report only really analyzes the timber available in 
suitable timberlands, meaning areas that have traditionally 
been forested, or rather, been harvested. If we can get your 
team the resources they need to build additional timber roads, 
that is going to give us new areas of the forest. That is going 
to give us new jobs, including for these socially disadvantaged 
people.
    Thank you very much, Mr. Secretary. Mr. Chairman, I would 
yield back.
    The Chairman. Thank you very much.
    I now recognize the gentleman from California, Mr. 
Carbajal, for 5 minutes.
    Mr. Carbajal. Thank you so much. Thank you to all of you 
for participating today, and thank you, Mr. Chairman, for 
holding this important hearing.
    In my district, we have over 800 Latino farmers, and I have 
had the opportunity to speak with some of them about the 
discriminatory barriers that they face every day, such as 
language barriers, lack of access to technical assistance, and 
the need for improved access to land and capital. USDA's Civil 
Rights Action Team reported in 1997 that Latino farmers were 
systematically excluded from USDA programs, and in the year 
2000, Guadalupe Garcia and a group of Latino farmers filed a 
lawsuit similar to the Pigford, and that was ultimately settled 
by the USDA. This lawsuit alleged that discriminatory lending 
practices by USDA deprived Latino farmers of opportunities 
afforded to their White counterparts.
    For example, one of the Latino farmers in this case was 
denied a loan to buy land by her local FSA office because they 
claimed that the land didn't have sufficient water to farm it, 
even though the land in the same area was also being farmed by 
two White farmers who were financed with FSA operating loans. I 
would ask for unanimous consent to include in the record the 
amended complaint in the Garcia lawsuit, Mr. Chairman.
    The Chairman. [inaudible].
    Mr. Carbajal. Without objection?
    The Chairman. Without objection. Thank you.
    [The case referred to is located on p. 350.]
    Mr. Carbajal. Thank you.
    Continuing the current discussion of Black farmers, let me 
ask you this, Secretary Vilsack. In my district, the Natural 
Resources Conservation District, NRCS, technical assistance, 
and the expertise of cooperative extension service have proven 
to be critical to ensuring that the latest science-based 
practices and the management techniques reach farmers, 
especially regarding carbon sequestration. In what ways can 
technical assistance be improved to better benefit Black 
farmers?
    Secretary Vilsack. Well, I think there are a couple of 
things, Congressman.
    First of all, I think we need more folks, more boots on the 
ground. That is obviously an appropriations issue. I think 
based on our targets and based on what we think is adequate for 
servicing the needs of people, we are about ten to 15 percent 
below where we need to be with NRCS boots on the ground. So, 
first and foremost, boots on the ground.
    Second, partnerships. We have mentioned this before. The 
ability to align ourselves with the folks who are trusted in 
the community to expand our reach, if you will. That starts 
with land-grant universities, Hispanic-serving institutions, 
and other community building organizations.
    I think it is also--we just recently requested input from 
folks on the issues of climate through the Federal Register. I 
would encourage you to encourage your stakeholders in your 
congressional district to respond to the set of questions we 
have put forward so we get better ideas and better input on how 
to structure efforts in terms of carbon in the future at USDA. 
That may also be a way of increasing our understanding of what 
is necessary and needed on the ground.
    Mr. Carbajal. Thank you, Secretary.
    I welcome the other witnesses to also weigh in, if you 
could.
    Mr. Haynie. Congressman, I think one thing we need to 
recognize is that we need more diversity within the agency, 
more people that can relate to the constituents that they 
serve, more African American and Latino representatives from 
NRCS that can go engage with these communities and have 
conversations and relate with those audiences. I think that is 
a big factor and would help play a big role in continuing the 
communication and the services that are available to the farms.
    Mrs. Cotton. And this is Arnetta Cotton. I would like----
    Mr. Carbajal. Yes, go ahead.
    Mrs. Cotton. This is Arnetta Cotton. I would like to add 
that you talked about the language barrier. It is not just a 
Latino barrier. It is the whole--all the acronyms used by the 
government, all of the different forms that are not down to the 
language or the capacity of a regular farmer. And then it is 
the fact that it is the same people in the office who was there 
through Garcia, through Pigford, through all of the others. 
They have not been let go, so they feel it is okay as if they 
have the blessing of the agency. And it is a poor 
representation, because the USDA is the peoples' agency.
    Mr. Blanding. Also, Congressman, I would also like to add 
to that if you don't mind.
    I think as a nation, we have to realize that all of our 
challenges have solutions, and it is incumbent upon all of us, 
the government, our corporations, our organizations, farmers, 
and all of our citizens to be a part of those solutions. And 
until we do that, we are going to constantly run around in 
circles. Farmers need to be educated, but also the USDA----
    The Chairman. The time of the gentleman has expired. Thank 
you so very much.
    Mr. Carbajal. Thank you very much. I yield back.
    The Chairman. I now recognize the gentleman from Georgia, 
Mr. Allen, for 5 minutes.
    Mr. Allen. Can you hear me?
    The Chairman. Yes, we can. Go ahead, Congressman.
    Mr. Allen. Thank you, Mr. Chairman, and thank you for 
holding this hearing. It is important that we know the state of 
our food supply in this nation, and of course, we are focused 
on our Black farmers in the U.S.
    When I grew up, I grew up on a farm. Ninety-seven percent 
of the population of this country was involved in some way when 
I grew up in agribusiness, and it has changed quite a bit since 
I grew up. I think it is less than two percent of the people in 
this country, Mr. Secretary, that are now involved in 
agriculture. And of course, what happened was my dad was a 
dairy farmer with timber and other things. Of course, along 
comes production ag, and in fact, the milk company was going to 
finance the expansion of my dad's dairy, but when my dad looked 
at the numbers and the fact that he had to put his land on the 
line, he turned it down. He went into competition with them and 
it put us out of business. And so, again, we are somewhat of a 
casualty to what has happened in agriculture since the 1960s, 
and I am sure it has affected folks in this hearing today. That 
is, it is unfortunate, because my dad loved it, but he just 
couldn't continue on.
    And obviously, from a stand point of bringing this nation 
together--and I understand the feelings on both sides, but, as 
people of faith, it is not an option that we come together. In 
fact, Mr. Chairman, this one is for you, because I know every 
time I get on an airplane you are reading the Bible. 1 Samuel 
16:7 says: ``The Lord sees not as man sees. Man looks on the 
outward appearance, but the Lord looks at the heart.'' And we 
know that God is an impartial God, so--but we are falling 
world--and we have to deal with it with our differences.
    In that respect, Secretary Vilsack, I am just going to tell 
you what I have heard floating around, and I just want to find 
out what you have seen there. But the American Rescue Plan Act 
of 2021 includes $4 billion for USDA for loans to disadvantaged 
farmers, but in that definition of disadvantaged farmers--and 
again, what we are hearing is like if you want to change--in 
this country, if you decide you want to change your gender, you 
can change your gender. Is there a possibility that farmers 
could say hey, I want to change my race and benefit from this 
program?
    Secretary Vilsack. Congressman, I think what you are 
getting to is a very fundamental question, and that is whether 
we trust farmers or don't trust them. When we had COVID relief, 
we trusted farmers when they told us that they were producing 
corn or soybeans. We didn't ask them to prove that, we trusted 
them, and we sent out billions and billions of dollars. If you 
want to create some kind of mechanism that suggests that we are 
supposed to distrust farmers, well, we could do that, but I 
don't think that is what you want, and certainly not what I 
want. We didn't ask for that in CFAP, and I don't think we can 
ask for it in this particular situation.
    The reality is, we are going to--we are dealing with people 
that the Department knows.
    Mr. Allen. Sir, not to interrupt you. I am not talking 
about trust. I am talking about what is the legality of that? 
Did you all look at the legality of that in this law when you 
made the law?
    Secretary Vilsack. Well, I think it is constitutional.
    Mr. Allen. I am not talking about a trust issue here. If it 
is legal to do this and someone can legally do it, is that 
possible?
    Secretary Vilsack. First of all, I think the statute is--I 
think the law is constitutional for the reasons that were 
articulated earlier. It is tailored. It is focused on a 
particular set of issues and trying to resolve those issues. 
And it certainly is dealing with the cumulative impact of 
discrimination. So--but I do think it is a trust issue at the 
end of the day, and I think we are going to trust folks. These 
are people that have dealt with somebody at the FSA office. 
They have had to make a loan. It is not like these are people 
that we don't know. We know these people, and the reality is, 
they are going to sign the document that says they are 
attesting to the truth of whatever it is they are representing. 
And there are serious, serious civil and criminal penalties if 
you don't tell the truth.
    I, for one, I am going to trust the farmers to be truthful, 
and if they are not, then they are going to be held 
accountable.
    Mr. Allen. Okay. Well, again, we make these laws. We 
appropriate monies, but from a legality standpoint--and that 
question was asked to me, and I don't think they were joking. I 
mean, at first I thought it was a joke.
    The Chairman. The time of the gentleman has expired.
    Mr. Allen. Okay. I yield back, Mr. Chairman.
    The Chairman. With all due respect, Mr. Allen.
    I now recognize the gentleman from California, Mr. Khanna, 
for 5 minutes. You may need to unmute, Mr. Khanna.
    Mr. Khanna. Can you hear me, Mr. Chairman?
    The Chairman. Yes, we got it. Go ahead.
    Mr. Khanna. Thank you. Well, let me just first say how 
pleased I am to see Secretary Vilsack in his role. He has 
demonstrated such a commitment in his record of public serve to 
inclusivity, to expanding opportunity, to caring about rural 
America, both Black and White rural America, and I have great 
confidence in his leadership. I am glad that President Biden 
selected him, and that he was willing to come back to 
Washington.
    I also want to thank Mr. Boyd for his leadership for 
decades in bringing issues of equity to the forefront, and 
really, it is a testament, sir, to your leadership and to the 
Chairman's vision that we are having a hearing that is long 
overdue about basic equity for Black farmers.
    Mr. Secretary, you spoke eloquently about USDA's long 
history of discrimination and some of the practices. How do you 
think we can hold some of the local county committees 
accountable for the bad actors? There are still some bad actors 
in some of these local county committees, and how do you think 
we can get accountability there?
    Secretary Vilsack. Well, I think first and foremost is 
making sure that those county committees have adequate 
representation that reflects the population that they serve. 
Oftentimes, when I was Secretary last, we had 385 counties, I 
believe, that didn't have a minority representative. I 
appointed minority representatives on those committees. First 
of all, there is that, and to the extent that people do provide 
discrimination, I think the point has been well taken. I have 
taken notes on this. The reality is if we say that 
discrimination is not to be tolerated and, in fact, 
discrimination occurs, then we do need to take disciplinary 
action and it needs to be effective, and it needs to be 
forceful, and it needs to be relatively quick so that people do 
get the message that this is serious and this is a new day. And 
I expect and anticipate that our team will act accordingly.
    I think it is also--the Equity Commission is going to be 
looking at all aspects of our operation, and I suspect that 
they will be looking at the structure and the basis and the 
mechanisms by which decisions have been made and appeals take 
place, and how that operates. And they may make a set of 
suggestions and recommendations. Clearly, our internal review 
of this from our working group, consistent with President 
Biden's Executive Order, may also result in recommendations. 
That process is just getting started, and I want to make sure 
that that process is able to work its way through the process 
so that we get the very best recommendations.
    Mr. Khanna. Mr. Secretary, you have spoken to a number of 
us on this Committee about the importance of technology, about 
the importance of broadband, biomanufacturing, precision 
agriculture, and I wonder how you think we can address some of 
the digital divide in access to technology where the African 
American community and Black farmers, Black rural South has 
been excluded from a lot of that technology, and what can we do 
to help alleviate that?
    Secretary Vilsack. Well, I think first and foremost, making 
a true fully funded commitment to expanding access to rural 
broadband, so that, in fact, the technology exists. In many 
communities, it does not exist.
    Second, I think it is working--again, as we talked about 
community building organizations funding and providing them the 
resources, extension and land-grant universities, historically 
Black colleges, et cetera, being able to give them the 
resources that will allow them to do the training so that 
people understand, whether it is a small business person or a 
farmer, how technology can be utilized appropriately.
    I think it is frankly also basically getting younger people 
into the United States Department of Agriculture from these 
areas in the form of internships so that they, in turn, can go 
back home with an understanding of how USDA works, and what 
they need in their rural communities, and be able to see if we 
can create career opportunities for them at USDA in their local 
communities to be able to solve some of the problems that they 
know firsthand. It is a combination of that, and I am sure 
much, much more.
    Mr. Khanna. I appreciate that. I have been surprised in 
just my work how much of our economic development is funded 
with the U.S. Department of Agriculture, and I look forward to 
your leadership on that.
    One question for Mr. Boyd and Mr. Blanding, and thank you 
again for both of your work. You have correctly testified that 
Black farmers are still impacted by discrimination and 
government payouts are linked to production. Black farmers have 
had less land, are smaller because of the historical legacy of 
racism. How do we then level the playing field, given that 
Black farmers are at this disadvantage because of having less 
land?
    Mr. Boyd. Yes, I will take a crack at that first.
    First of all, we need to redo the base calculation, the way 
that they are calculated, and also, we need caps. We need caps 
so all the money just won't go to the big farmers. We have to 
figure out a way to do that. During those Trump payouts, there 
was no sense in having one county, like Mecklenburg County, 
receive $40 an acre, and then in Georgia County receive $140 an 
acre. We have to figure out----
    The Chairman. The time of the gentleman unfortunately has 
expired. Perhaps, again, Mr. Boyd----
    Mr. Boyd. I am trying.
    The Chairman.--may find a way to answer that when a 
question is put to you.
    What a terrific hearing.
    I now recognize the gentleman from Ohio, Mr. Balderson, for 
5 minutes.
    Mr. Balderson. Thank you, Mr. Chairman. I want to thank the 
panel for being here, and I also want to thank Secretary 
Vilsack for joining today. I look forward to having a phone 
call with you next week, but I just want to remind you--you 
won't remember me, but I met you with Zack Space. You were in 
my hometown of Zanesville, Ohio, Muskingum County, when Zack 
represented us in Congress and we were kind of doing a nice 
little tour, and you did a really nice job. You were down at 
the Zanesville Welcome Center. Pretty close to Zack's downtown 
office here. I look forward to working with you being a Member 
of Congress now.
    But Rep. Plaskett kind of touched on this a little bit, 
Secretary, but you know, 1 month after Congress appropriated 
additional money for the Coronavirus Food Assistance Program, 
or as she referred to it as CFAP, President Biden froze the 
payments. Can you discuss why the Administration suspended CFAP 
payments and what the Agency discovered in the nearly 2 month 
halt?
    Secretary Vilsack. It is standard practice in changes of 
Administration for the incoming Administration to take a look 
at what may have taken place just before the new Administration 
took over. And so, we wanted the opportunity to basically take 
a look. We also wanted an opportunity to analyze who wasn't 
being served, who wasn't being helped, who wasn't being helped 
as much as they needed to be, and that is why yesterday we made 
the four-part announcement payments now going under CFAP 2 and 
CFAP 1 to cattle producers and some of the commodity producers, 
but also resources now for local and regional food system 
opportunities, as well as a series of steps we are going to 
take with roughly $6 billion to help those we have now 
identified were not served, not helped by previous COVID 
packages. We will, over the course of the next several months, 
be involved in rulemaking to get those resources out the door 
as quickly as possible.
    It was designed primarily to give us a chance to analyze 
who had been helped and who hadn't been helped, and to create 
and construct an effort to make sure that we had equitable 
assistance throughout the COVID. I will just say, as part of 
this hearing, it allowed us to identify the fact that in CFAP 
2, the outreach to socially disadvantaged producers wasn't what 
it needed to be. That is why we are going to expand the sign-up 
for 60 days to give people a chance to apply for those 
benefits.
    Mr. Balderson. Okay. Well, thank you, Mr. Secretary, and I 
look forward to speaking with you again next week.
    My next question is for the panel, and you all can answer 
this. I appreciate all your testimonies that you have given 
today.
    If each of you could target one area for the USDA to 
improve its practices or programs, what would that be? Let's 
start with Mr. Boyd, since he kind of gets shut off every time 
he gets to start talking. Mr. Boyd, lead the way.
    Mr. Boyd. Well, first of all, I would do away with the 3 
year limitation requirement for new or beginning farmers. That 
is the first thing I would do, and I would make sure that we 
have full participation in farm ownership loans, farm operating 
loans, all of those areas where Black farmers today are pretty 
much absent. The only way to do that is to have oversight and 
transparency, something I have been trying to get in this whole 
hearing and I haven't been able to get it in. We need 
transparency so when we have hearings like this, we will be 
able to lay out the numbers by state, county, ZIP Code, by 
race, and when you have people that bring these issues up, you 
will be able to go right to those numbers and see what they 
are. That is the way that you improve.
    Mr. Balderson. Thank you, sir. Anybody going to go next? 
Mr. Haynie or anybody would like to go next, go ahead.
    Mr. Haynie. I think the one thing that needs to be 
addressed is the subsidy programs. John mentioned it earlier, 
but right now, we are seeing 20 for a Black farmer compared to 
$1 for White farmers on these subsidy programs. That is 
something that really needs to be addressed. You have Black 
farmers right beside White farmers and they are only getting 
25 on a dollar for what their neighbors are receiving in ARC 
and PLC programs. These programs were established back in the 
1980s during the crux of discrimination at USDA, and they 
really need to be addressed. So, that is one issue.
    The Secretary mentioned about the COVID program. One of the 
benefits of CFAP 1 were the larger farmers had grain storage 
and capacities that a lot of small farmers didn't have. If you 
didn't have grain stored in your bins, you weren't able to 
benefit. A lot of Black farmers had to sell their grains in the 
fall of the year and weren't privileged to storage benefit. The 
commodity programs and Congresswoman Bustos from Illinois 
mentioned it, that is a large pot of money to go out, and the 
disparities really start to show themselves when you look at 
subsidy programs and differences in dollars paid out to Black 
farmers and White farmers.
    Thank you.
    Mrs. Sherrod. If I may, please allow me the opportunity to 
say that farmers with smaller acreage can't compete with the 
commodity crops. We actually have had them co-opted, in 
cooperatives, and we are organizing them to grow and sell into 
other markets, vegetables and so forth. They need the 
infrastructure. They can't afford to put in a facility to wash, 
dry, cool, and get products to market. It is very important for 
those small growers, those small landowners to have access to 
money like this to give them a chance to survive.
    The Chairman. Thank you. Thank you.
    Mr. Balderson. Thank you very much. Mr. Chairman, I yield 
back.
    The Chairman. Thank you so much, and I appreciate you all 
panelists. This is such an energetic hearing. It is great. It 
is certainly historic, and I appreciate you all.
    I now recognize the gentlewoman from Washington, Ms. 
Schrier, for 5 minutes.
    Ms. Schrier. Thank you, Mr. Chairman, and thank you to our 
guests.
    The first issue I want to focus on is land and water access 
for Black farmers. Our witnesses today have left no doubt that 
farmers of color have faced and still face systemic barriers to 
land ownership and water access. And today, Black farmers are 
more likely to rent rather than own farmland. They have smaller 
farms, own less land, generate less wealth from farming 
compared with White farmers, and these factors leave Black 
farmers at a huge disadvantage, because farmland real estate 
represents nearly 80 percent of total U.S. farm assets. Farmers 
who do not own land or have a clear title to land can't 
leverage that land or capital to invest in, sustain, and 
improve their farming operations.
    Now, this is especially challenging in urban and suburban 
areas like King and Pierce County in my district. For example, 
in Washington State in general, the average price for an acre 
of cropland in 2020 was just over $2,600. But by comparison in 
King County, the average price for an acre is more than 
$35,000, and in Pierce County, it is around $21,500 per acre. I 
have heard from farmers of color in Washington State about the 
difficulty in obtaining farmland because of these prices, and 
the historic systems of discrimination that prevent them from 
ever purchasing farmland.
    So, my question, Mr. Blanding, can you speak about the 
importance of access to land and actually land ownership for 
Black farmers, and can you talk about what systemic barriers to 
the purchase and ownership of farmland exists for Black farmers 
today?
    Mr. Blanding. Yes, thank you. That question is for Blanding 
or Boyd? I am sorry, I didn't hear.
    Ms. Schrier. Mr. Blanding.
    Mr. Blanding. Thank you, Congresswoman, for that question.
    So, the problems with Black farmers and Black land 
ownership is historic. First, in terms of ownership, or again, 
access to land, first of all, there has to be access to 
equitable credit in order to get access to that land. And I 
think there has been systemic problems in the credit industry 
for years. I think this is an opportunity for there to be a 
Black farmer financial institution modeled after the Farm 
Credit System where Black farmers can get the kind of credit 
that they need and serve themselves, just like the Farm Credit 
System, which is a great system, by the way. But again, Black 
farmers need to have access to that type of credit.
    But our problem is around maintaining and holding on to 
existing land. Heirs property is a major issue in the Black 
farming community and the Black community overall. We estimate 
60 percent of all Black landowners have this heirs property 
issue, and so, we must figure out ways to make sure that there 
are things that can be done to make sure this heirs property 
situation is cleared up. There are things that already exist, 
like the Heirs Property Relending Program that was approved for 
the 2018 Farm Bill, but it has yet to be implemented and 
funded. So, things like that can be done immediately. But also, 
a lot of education and technical assistance around that area 
will go a long way to make sure Black farmers continue to hold 
on to their land base, and continue to thrive in this country.
    But I would also like to say, Congresswoman, that we as a 
country have to look at the value of not only all farmers, but 
Black farmers and specifically around dealing with the issues 
around land and water, as you suggested, because they are all 
part of the equation, and you have to make sure that Black 
farmers are part of that as well.
    Ms. Schrier. Thank you.
    I need to address one more question. Thank you for your 
comments.
    I just want to also address Black, Indigenous, people of 
color farmer participation in conservation programs 
specifically. Among White farmers in Washington State, about 
nine percent receive Conservation Reserve, wetlands reserve, 
farmable wetlands, or Conservation Reserve Enhancement Program 
payments. For Black farmers in Washington, it is less than one 
percent.
    So, Secretary Vilsack, under your leadership, how will the 
USDA work to combat historic and current racial injustices in 
climate and agriculture policy, and how can the USDA continue 
to support existing conservation programs and make them more 
equitable and accessible?
    Secretary Vilsack. Well, there are several things. First of 
all, we are going to ask the current acting Chief of the NRCS, 
Terry Cosby, who is an African American, to help lead that 
effort to make sure that resources are more equitably available 
to socially disadvantaged producers.
    Second, again, the internal review and the external review, 
whether it is the Equity Commission or the internal review from 
President Biden's Executive Order, will obviously identify 
recommendations.
    Third, it is about accountability to John Boyd's question 
or his comment about transparency. It is about asking for 
information on an ongoing basis to make sure that you see 
whether there is, in fact, investment being made, and if there 
is not, why there is not and who is responsible for making sure 
that there is.
    So, it is a combination of a lot of those things. I think 
it is also a combination of working again with better outreach. 
It may not be that folks don't qualify or it may not be that 
they are prevented from qualifying; it is that they may not 
even know about the program. They may not know what they have 
to do. And I think this money in the American Rescue Plan gives 
us an enormous opportunity to improve outreach and to take a 
look at additional opportunities to help farmers access more 
revenue. I think that is what the market process----
    The Chairman. The time of the gentlewoman has expired.
    Ms. Schrier. Thank you, Mr. Secretary. I yield back.
    The Chairman. I recognize next the gentleman from Kansas, 
Mr. Mann, for 5 minutes.
    Mr. Mann. Thank you, Mr. Chairman.
    My question is for Mrs. Cotton. Thank you for your 
incredible service to your community. In your written testimony 
and in our conversations, I know you have mentioned that you 
have helped deliver food to more than one million people in 
five states during COVID-19 through the USDA's Farmers to 
Families Food Box Program. What do you foresee is the future 
for this program, and how can the USDA assist with connecting 
more rural and underserved communities, or communities in the 
last mile to get them the food that they need?
    Mrs. Cotton. Thank you, Representative Mann. I appreciate 
that question.
    It is an excellent program. It is viable and it is much 
needed. We have people coming, as you know, from five different 
states to Oklahoma, because in their areas, it is not as 
functional, all right? And so, what happens, some of the food 
banks for a sense of efficiency, some of the dollars were sent 
to food banks in these last two programs--in the last two 
phases. By being sent to food banks, then organizations then 
have to qualify through the food bank in order to pick up from 
them or to be considered a hub. What would make it more viable 
is if the people who are actually getting the work done in 
integrity--there have been people who have taken advantage of 
the system--but who are operating in integrity and getting the 
food out to the people where they belong, I believe that it 
will continue to be a good program.
    As far as the last mile is concerned, it goes back to 
transparency and accountability. If those vendors were awarded 
monies that included last mile delivery--so, if for me, I am 
sending out to different places, then from me, then that person 
who is doing that work, networking with other people, should 
get that last mile.
    And so, how do we continue to do so? By percentages. It is 
documentable. They know how many trucks that they are 
delivering. They know where the trucks are going. They know how 
much is being disseminated and what is not being returned to 
them. That is an easy, easy fix. By allowing some of the cold 
storage, which they have had refrigerated trucks, if they would 
allow some of the cold storage to include thermal blankets, so 
in some of the really--because our communities are so rural, 
they can't afford to get a semi-truck. If they would allow 
thermal blankets to suffice in cold storage, we would be able 
to get it out quicker. And if they would underwrite the cost of 
providing those blankets to individuals who are picking up and 
then taking to other people. Our community is less than 2,000, 
and so, there are lot of seniors who are homebound, and we need 
that service. We actually do. But it is wonderful.
    And something to help our volunteers. I would say that, 
too. Our community has come together, yes.
    Mr. Mann. You don't feed one million people without a lot 
of volunteers, so thank you for that.
    My second question, this one is for Mr. Haynie.
    Mr. Haynie, in your testimony, you mentioned that you have 
formed partnerships with land-grant universities. We all know 
that land-grant universities play an important role in 
educating our next generation of farmers. Can you talk more 
about your partnership with these land-grant universities, and 
how they have helped?
    Mr. Haynie. Well, I mentioned partnerships with 
corporations and in our local and state agencies. But we have 
relationships with the land-grant universities where we have--
National Black Growers Council has a field day strategy, and we 
want to work with those land-grant universities to bring the 
agriculture community, who typically is not serviced--they can 
come out and see the latest and greatest that agriculture has 
to offer. What corporations have to offer as far as seed and 
chemistry and technology, these communities are often not 
served by the salesmen who would typically go to the White 
farmer who is the larger spender and the bigger accounts. They 
take all this information there, and oftentimes, they drive 
right past the driveways where Black farmers exist. We wanted 
to make sure that we were a conduit and a pipeline for 
information for the Black farm community to be aware of 
everything that is available in production agriculture.
    Mr. Mann. Great, great. Thank you, both of you.
    Mr. Chairman, I yield back.
    The Chairman. Thank you very much.
    I now recognize the gentlewoman from Arizona, Mrs. 
Kirkpatrick, for 5 minutes.
    Mrs. Kirkpatrick. Well, good afternoon from Arizona. Thank 
you, Chairman Scott, for bringing us together with this panel 
on such an important topic.
    I grew up in the White Mountain Apache Reservation in rural 
Arizona, and was raised in a ranching family, so I know just 
how important these USDA programs are for farming and ranching 
families.
    In my State of Arizona, there are more Native American 
farmers than any other state, and I want to mention the unique 
challenges they face in getting access to USDA programs. Just 
as heirs property created a barrier for Black farmers getting 
financial aid from farm loans, Native American farmers have 
also struggled to participate in USDA programs due to the 
nature of land ownership of Indian trust lands.
    For Native American farmers, historical program rules 
requiring land ownership for eligibility have prevented them 
from accessing the assistance they need to develop their land. 
A common thread in all of the testimony today is that these 
obstacles create systemic inequity. Not surprisingly, due to 
these systemic inequities, White farmers are 70 percent more 
profitable than Native American farms, despite Native American 
farms being over twice the size.
    First, Mr. Chairman, I would like to ask unanimous consent 
to include in the record a 2019 report by the GAO describing 
the needs and barriers to agricultural lending on Tribal land.
    The Chairman. It is done without objection.
    [The report referred to is located on p. 375.]
    Mrs. Kirkpatrick. Thank you so much.
    So, my first question is for Mrs. Sherrod. I am moved by 
your testimony, and I am so sorry to hear about this grim 
anniversary of your father's death. It saddens me to hear that 
you never received justice in your father's case. I am also 
very troubled by the problems you detailed that still plague 
the USDA today, and continue the cycle of inequity.
    So, here is my question. Can you describe some things that 
the USDA can do to improve its outreach to Black farmers, and 
what are the main barriers to Black farmers accessing USDA 
programs?
    Mrs. Sherrod. Let me say that working with community-based 
organizations, we are on the ground. We have been working with 
them to help change their situations, in spite of all the 
issues they face with USDA. I think it is very important--that 
is why we fought for Section 2501 way back in the 1990s to try 
to get funds specifically targeted to minority farmers and 
through community-based organizations and 1890 land-grants. 
That program is now serving everybody. They have thrown the 
kitchen sink towards that program so that Black farmers are not 
getting the benefit of something we fought so hard to get 
passed. There are so many different barriers now because people 
have been kept out of the agency. You have to make them feel 
they can come back there for help, and that can happen if you 
work with people on the ground who are working with them. USDA 
is there but they need us, and we can help turn that around, 
but we can't get the funding to do it.
    Mrs. Kirkpatrick. They do, indeed, need you, so thank you 
for recognizing that.
    My second question is for Mr. Rowe. I am inspired by your 
testimony today and by your decision to become a first-
generation farmer. Further, I can only imagine the difficulty 
in not only starting a farm completely from scratch, but going 
through the process to ensure you are producing organic crops.
    From my conversations with farmers back home, I know that 
going through the organic certification process is something 
that scares a lot of farmers off, or they don't know where to 
start, even if they are already operating under USDA organic 
practices. Can you describe for us some of the reasons you 
chose to produce organically, and if you see an opportunity to 
help more Black farms through the USDA organic certification?
    The Chairman. I am going to have to ask if you might be 
kind enough to reply in writing. We are way past the time. I 
deeply appreciate your consideration. We want to get every 
Member in this important hearing.
    So, now I recognize the gentleman from Iowa, Mr. Feenstra, 
for 5 minutes.
    Mr. Feenstra. Thank you, Chairman Scott and Ranking Member 
Thompson.
    First, I just want to thank each of the witnesses for their 
testimony today and sharing the experiences you, your family, 
and your friends have faced. I appreciate you saying these 
things, and I also definitely appreciate the Secretary of 
Agriculture, Mr. Vilsack, for being here today. He is from my 
home state, and I appreciate that.
    Mrs. Cotton, in your testimony you speak to the importance 
of local community organizations in relaying USDA resources. 
Can you expand on how USDA could better engage with community 
organizations and non-governmental organizations to conduct 
outreach and to implement USDA training programs?
    Mrs. Cotton. Absolutely. We have land-grant--thank you so 
very much for that question and for the opportunity.
    We have land-grant universities here in Oklahoma through 
which, as Mrs. Sherrod just talked about, the Section 2501 
programs. We have that available to us that we can partner with 
the USDA. They are educational institutions and they are 
established as minorities, and so it would be wonderful if 
through those university's programs with existing community 
outreach programs, they would partner together in order to be 
the hands and feet--or rather, the boots on the ground for the 
people in the communities. They are big enough to partner with 
the USDA offices in all of their branches, FSA, NRCS, RD, in 
order to talk to the people in their language and kind of break 
it down, break it down from what the government expects, break 
it down to its simplest denomination so everyone can understand 
it, and then they be there to help walk the people through 
giving technical advice without coming back and saying yes, you 
did it right. Let's follow up on that. Let's follow through to 
see that it was successful are two different things. By 
partnering with the USDA and the land-grant universities, we 
can do that. They can absolutely create educational programs 
that can go out to the field and then be applied to those in 
the communities.
    Mr. Feenstra. I appreciate that, Mrs. Cotton, and so, I am 
just curious. In Iowa, we have the Iowa Extension Service that 
does some of this that sort of works together. I didn't know if 
the extension service is available in your area or not. This is 
pretty big for our area, for our farmers, and I find it--I am a 
local farmer here. My family is, and we use that extension 
service a lot.
    Mrs. Cotton. The extension services are available to us. 
OSU extension is available to us in the area, but when it comes 
to combining the two programs, they focus more on the 
agricultural side--actually the agricultural side, but the 
implementation of USDA programs needs the partnerships 
primarily with land-grant universities that are historically 
underserved.
    Mr. Feenstra. Yes. No, I appreciate your comments and I 
agree 100 percent with you. I would love to work with the 
Chairman and things like that on trying to figure out how that 
partnership can occur. I have a land-grant university in my 
state also, Iowa State University, and they are very big into 
agriculture and trying to figure out how we can help one 
another, and continue to expand, especially in diversity.
    So, thank you so much for your comments, and Mr. Chairman, 
I yield back. Thank you.
    The Chairman. Thank you very much.
    Now, I recognize the gentleman from Georgia, Mr. Sanford 
Bishop, for 5 minutes.
    Mr. Bishop. Thank you very much, Mr. Chairman. Let me thank 
you so very much for holding this historic hearing on the state 
of Black farmers in the United States. Let me thank you for 
bringing together such a tremendous panel to help us understand 
how we can bring equity to Black farmers. Let me thank 
especially Secretary Vilsack for his commitment to bringing 
equity. I want to also thank him for his efforts to reconcile 
with Mrs. Sherrod, who was once in the Administration where he 
was Secretary of rural development for Georgia. I want to 
welcome the other witnesses from Georgia with whom I have 
worked, and am so delighted that they were able to testify, and 
for Mrs. Cotton and Reverend Cotton, I want to welcome you. I 
am delighted to meet you.
    Let me go back to what was just raised with regard to 
outreach and advocacy. One of the tremendous needs for Black 
farmers to be able to fully access the resources of USDA is to 
know what resources are available and how to get to them. 
Advocacy and outreach is extremely important, and of course, 
the Office of Partnerships and Public Engagement is performing 
that function, and I think under the previous Vilsack-run 
Department the advocacy and outreach function was performed 
there.
    But it seems to me that to bring together the 1890s, the 
land-grants, the community-based programs, the Section 2501 
programs, you need to have within USDA a focused office of 
whose sole responsibility is to make sure that that outreach 
happens in each and every subagency of USDA, Farm Service 
Agency, Rural Development, Rural Housing Service, Rural 
Utilities Service, NRCS, marketing, the export opportunities, 
research, and the opportunity to develop young farmers. The 
1890s National Scholars Program, for example, the internship 
programs, all of these things are vitally important, but 
somebody at USDA--and right now, I think it is being done by 
the Office of Partnerships and Public Engagement--but I would 
like to ask the Secretary if he can assure us--and I 
congratulate him on Deputy Secretary Hairston--who we hope will 
soon be confirmed, to work with him to make this happen.
    Can you comment on that briefly, Mr. Secretary, and then I 
would like to--if you could be brief on that, to ask Mrs. 
Sherrod and Mrs. Cotton to comment on the impact and experience 
that they have had as Black women farmers.
    Secretary Vilsack. Mr. Chairman, thank you very much for 
the question. The answer--the quick answer is yes, and we know 
this works because on advice that Shirley Sherrod gave me in my 
last time at USDA. We did create the Strike Force Initiative 
that she made reference to. It ended up operating in over 20 
states and made over 200,000 investments. This system works. We 
need more of it.
    Mrs. Sherrod. And I want to add that as a female in the 
field of agriculture, working with farmers and farming, we made 
major contributions, just let me say that. I have gone from 
having to sit down with the farmer and help him understand what 
it meant to change--for example, if I go back years from the 
old allotment program with peanuts to the--well, I won't go 
back that far. But farmers are focused on farming. Women focus 
on the business as well, and when you put those together, we 
can make progress. We also plan and are developing cooperatives 
and looking at markets and helping our farmers to transition 
from row crops when they don't have enough land. We make those 
contributions to this work that no one really recognizes.
    Mrs. Cotton. And let me add to that. In addition to all of 
that, we do the actual work: haul the hay, fix the fence, work 
the cows. But when we go into the offices, I have had to even 
prove--I am 411", you all--and I have had to go in and show 
video of me staging hay because they said there was no way that 
I could do it.
    The Chairman. I am sorry, but the time of the gentleman, 
Mr. Bishop, has expired. I am sorry.
    Mr. Bishop. Thank you very much.
    The Chairman. Now, I recognize the gentlewoman from 
Minnesota, Mrs. Fischbach, for 5 minutes.
    Mrs. Fischbach. Thank you, Mr. Chairman. I appreciate the 
opportunity and I thank all of the testifiers for being here 
today. It has been very, very interesting.
    I just have a couple of questions for the Secretary. I have 
heard a couple of the testifiers mention passing on the farm 
and several generations worth of farming, and Mr. Secretary, 
the Biden Administration has been talking about potentially 
making some changes to the calculation of the stepped-up basis. 
I am wondering if you could maybe comment on that, on how that 
might affect some of these folks that are trying to pass on 
that farm, particularly in the socially disadvantaged 
communities?
    Secretary Vilsack. Congresswoman, I have not had an 
opportunity to visit with anyone in the Biden Administration on 
the issue of stepped-up basis. I do know that it is an 
important aspect of the countryside where people who pass away, 
the appreciation of their farmland is essentially not taxed, 
not subject to income tax, and it provides an opportunity for 
transfer to the next generation. I am happy to look into that 
issue and find out more about it, but I am sorry to say I am 
not prepared to respond to that question today. I didn't 
anticipate that one.
    Mrs. Fischbach. And Mr. Secretary, I would appreciate that. 
Just--like I said, as we were talking, some of the testifiers 
were talking a little bit about those generational farms, and 
so I just thought that that might be something that would be of 
concern.
    But Mr. Secretary, just one other thing. Congressman Bishop 
was talking a little bit about some of the outreach. I was just 
kind of wondering if maybe you could expand a little bit on 
some of that, and what kind of outreach is being done on some 
of the existing programs to make sure in particular that 
younger generation of farmers, but, with an emphasis on those 
groups in the socially disadvantaged communities?
    Secretary Vilsack. Well, obviously COVID has made somewhat 
of a different situation over the last year, but historically, 
I think the panelists have basically put their finger on the 
real problem here, which is that it is very, very hard for 
farmers to initiate the conversation that leads to providing 
the technical assistance and outreach if you don't trust the 
people that you are asking for help. And that is the 
fundamental issue here, one of the fundamental issues. We have 
to restore trust out on the countryside. And frankly, we can't 
do that--in my estimation, we can't do that by walking in to--
or walking on the farm and saying, as we say, hi, I am here 
from the government. I am here to help you. We have to walk on 
the farm with someone who they trust. It can be a community 
building organization, a land-grant university, extension, 
whatever it might be, and basically say we are here to listen. 
We are here to learn how we can help you. And then, there has 
to be a commitment to make it a successful relationship and 
transaction. It can't be just we listen and then we give you 15 
reasons why it won't happen. We have to figure out ways in 
which we take care of each one of those reasons and ultimately 
get to success so that people recognize that there is a reason 
for the Federal Government; there is a reason for the 
Department of Agriculture; that we are there to help and it 
creates the relationship that ultimately leads to further 
opportunities.
    I think it starts fundamentally with building trust, and I 
think that starts with making sure that we are not alone when 
we go providing assistance and help, and that we listen, that 
we respect and acknowledge the reason why they are distrustful. 
It is absolutely rational what we are dealing with here.
    Mrs. Fischbach. And Mr. Secretary, I appreciate that and 
because we have existing programs, we just have to make sure 
that there are programs within the USDA and I just want to make 
sure that we are making sure that people are aware of those, 
and I appreciate the issue of the trust and that you will be 
reaching out in that way with a trusted individual with you, or 
however you determine that is going to be working.
    But thank you very much, Mr. Chairman. I appreciate the 
opportunity, and I yield back my whole 45 seconds.
    The Chairman. Wonderful. Thank you so much.
    I now recognize the gentleman from Florida, Mr. Lawson, for 
5 minutes.
    Mr. Lawson. Thank you, Mr. Chairman, and I am delighted 
that you called this hearing. I want to thank you all and I 
want to welcome the witnesses here.
    I know that there have been a lot of questions today, but I 
am interested to ask Mr. Boyd that when you talk about all of 
the problems that we have had, especially with the relationship 
between Black farmers and USDA, what mechanism should we be 
doing now? We have a new Secretary in now to help rebuild the 
relationships.
    Mr. Boyd. Thank you very much for the question. I tapped on 
it a little bit earlier, and everybody has today. Outreach and 
technical assistance, and building trust. We have 116,000 
members in 46 states, and we are overwhelmed with just 
inquiries on all of this stuff. There has to be better 
communication, and I am going to say this to Secretary Vilsack, 
who I have an enormous amount of respect for. Organizations 
like the National Black Farmers Association have to be engaged 
at the highest levels at the United States Department of 
Agriculture if this thing is going to work. When you are 
forming these committees and you are having these inside 
panels, we need to be at the table, too, so we can make sure we 
are injecting the right information. The government can't fix 
itself. The fox can't watch the henhouse here. You got to have 
some people at the table on the outside of these groups at the 
table to help advise and make sure that we do this thing right, 
that we get it right this time.
    So, we have a wonderful opportunity here, I believe, to do 
some great things here in the next 4 years, and the only way to 
do that is work collaboratively together in an expeditious way, 
because right now, we are facing extinction. Our farmers are 
hurting and they are looking for answers, and they are looking 
for next steps. I am looking forward to working with this 
Administration to putting all of those things in place, 
especially the outreach and technical assistance piece.
    Mr. Lawson. Okay, thank you very much, and Mr. Secretary, a 
year ago or 2 years ago when Mr. Perdue was Secretary, I 
brought him down to Tallahassee to Florida A&M University to 
speak with the agricultural department at the HBCU and he was 
very helpful on a lot of things that he said that they were 
going to do. I just wanted to ask you, Mr. Secretary, how do 
you intend for your agency's support in these Black students, 
Black women, Black veterans who are trying to enter into the 
agriculture industry for the first time?
    Secretary Vilsack. Well, I think there is tremendous 
opportunity with resources that have recently been provided to 
really expand and to deepen our commitment to internships. 
Getting these young people to be connected to the USDA in a 
variety of different mission areas, so they have experience, 
they develop relationships, they develop an understanding and 
appreciation for the opportunities that may exist. And then 
basically make sure that, that it is connected potentially, to 
a job opportunity. We have a tremendous internship program. 
Chairman Scott, is a great supporter of that. Chairman Bishop 
is a great supporter of that. I would anticipate and expect 
that we will continue to have support for that effort to link 
internships with job opportunities, and I think that is one way 
of getting people involved and active.
    The second way, there is a program called Together We Grow 
that is currently working out of Colorado State University, but 
it includes historic Black colleges as well, and they are 
working collaboratively with agribusiness, with the USDA, and 
other entities to try to expand opportunities for minority 
students in all of agribusiness. I would say that the USDA 
probably should be looking for ways at some point to link up 
with that effort or similar efforts to make sure that 
agribusiness is also engaged in this outreach effort.
    Mr. Lawson. Okay, thank you very much. I have about 40 
seconds, but I want to ask Mr. Rowe, how do you get more Black 
farmers interested in organic farming? Did anyone----
    The Chairman. Is Mr. Rowe----
    Mrs. Sherrod. One thing is to help farmers like Mr. Rowe 
become successful. He hasn't been able to access financing 
through the agency. Helping him--he is an example for so many 
others, and there are other examples out there. We need to 
really help them and showing that there is a possibility.
    The Chairman. The time of the gentleman has expired, 
unfortunately.
    Mr. Lawson. My time has expired, Mr. Chairman. I yield 
back.
    The Chairman. Now, I recognize the gentlewoman from 
Illinois, Mrs. Miller, for 5 minutes.
    Mrs. Miller. Thank you, Mr. Chairman. I have a question for 
Mrs. Sherrod.
    You make the statement in your written testimony that the 
USDA has been the driving force behind the steady decline in 
the number of Black farms and Black-owned farmland. I was just 
curious could you specifically expand on what you mean by that 
statement, and then give me what your prioritized solutions 
would be?
    Mrs. Sherrod. Okay. Well, I can give you lots of 
information on justifying the statement that I made, going back 
to our own farm, going back to land that an organization we 
have to create as an answer to land being taken. We created the 
First Community Land Trust and the discrimination we faced by 
USDA caused us in 1985 to lose 6,000 acres of land. A White 
farmer can want your property--and I have worked on so many 
cases like this--and the next thing you know, you are in real 
trouble with the agency if you are a borrower. I have seen it 
happen so many times. I have worked through so many of those 
issues through the years, and again, having people who the 
farmers trust and willing to get to know the various programs 
that they need to access, and helping them to do that is part 
of the answer to this. Because there are so many programs out 
there they can take advantage of, but they are afraid to try to 
even go to the agency. There is no trust there, and they think 
it is a place where they will definitely lose their land.
    Mrs. Miller. Okay, thank you. I yield back, Mr. Chairman.
    The Chairman. Oh, awesome, Mrs. Miller, thank you very 
much.
    And now, I recognize the gentleman from Illinois, Mr. Bobby 
Rush, for 5 minutes.
    Mr. Rush. I want to thank you, Mr. Chairman, for this 
outstanding and historic hearing that is shining a bright light 
on one of the longstanding problems that we have in our nation.
    Mr. Chairman, I am currently reading a book entitled, The 
Color of Money: Black Banks and the Racial Wealth Gap, by 
Mehrsa Baradaran, and one particular passage in the book that 
really resonated with me as I prepared for today's critical and 
long overdue hearing goes like this, and I quote, ``When the 
Emancipation Proclamation was signed in 1863, the Black 
community owned a total of 0.5 percent of the total wealth in 
the United States. . . . more than 150 years later, that number 
has barely budged--Blacks still own only one percent of wealth 
in the United States.'' When Martin Luther King stood on the 
steps on the Lincoln Memorial in 1963, he said, and I quote, 
``America has given the Negro people a bad check, a check which 
has come back marked `insufficient funds'. Yet, despite a 
century of honest toil--the check has continued to involve 
insufficient funds.'' And Mr. Chairman, it is clear from 
today's hearing that Black farmers exemplify how the Black 
community has received and still receives an NSF check.
    I want to thank all the witnesses before us.
    Mr. Chairman, I want to ask Secretary Vilsack. Secretary 
Vilsack, I am honored that you are committed to prioritizing a 
diverse team into addressing the longstanding racial equity 
issues the vast majority of Black farmers and Black-owned 
farmland. Secretary Vilsack, I have a number of questions here. 
Will you expand upon the concrete steps that you are taking to 
foster trust and ensuring the timely access to capital for 
Black farmers? Include Title 9 in that. Do you need any 
additional authorities from Congress to enact policies to 
directly help struggling Black farmers and to reverse the 
impact of decades of discriminatory practices in the USDA? It 
is my understanding that there is currently insufficient 
transparency regarding assistance to farmers based on race. To 
that end, I would like to know, can you tell me the number of 
Black farmers who bought crop insurance policies in 2019 
compared to White farmers? Can you tell me how much Black 
farmers received in premiums or income support compared to 
White farmers? Can you tell me how many part-ownership Black 
farmers received farm ownership or operating loans in 2019 
compared to White farmers? Given the decades of discrimination 
that have led to the vast majority of Black farmers having to 
sell their farms, can you support [inaudible] on subsidies and 
loans available to Black farmers?
    Mr. Secretary, can you answer any or most of those 
questions?
    Secretary Vilsack. Congressman, I am happy to provide you 
the data on the last question you asked concerning transparency 
to the extent that we have it. I know, for example, from 2017 
to 2020, there were 2,131 direct loans to socially 
disadvantaged farmers, approximately $112 million went out. 
That I know. I am happy to provide you with information on 
that.
    I don't know that I necessarily need more authority, but I 
am interested in knowing what the Equity Commission and our 
internal review pursuant to President Biden's Executive Order 
will identify, and we may come back to you asking for 
additional authority.
    In terms of specific steps, over the course of the next 6 
months, I think we are going to take--we are going to learn a 
lot. We are going to take an effort to try to better connect 
with the historic Black colleges and other community building 
organizations with the resources you have provided in the 
American Rescue Plan, and I would anticipate and hope that we 
have--to begin the process, and I emphasize begin, begin the 
process of improved outreach as a result of the Section 1006 
money that is provided in the Rescue Plan.
    The Chairman. Thank you very much.
    Mr. Rush. Mr. Chairman, I ask for unanimous consent to 
enter into the record the quote from the book, The Color of 
Money: Black Banks and the Racial Wealth Gap, by Mehrsa 
Baradaran who I referenced earlier in my testimony. Unanimous 
consent.
    The Chairman. It is so done without objection.
    [The excerpt of the book is located on p. 348.]
    Mr. Rush. Thank you.
    The Chairman. Thank you, Mr. Rush.
    Ladies and gentlemen, it looks like we have entered the end 
of our Members' questions. And so, what we want to do now is 
have concluding remarks from my Ranking Member, Congressman 
Thompson, and myself.
    But let me just say this, please. This has been 
extraordinary. When I opened this hearing, I opened it with the 
precious words of the Lord, as was expounded by his great 
apostle, Paul. When Paul wrote that all things come together 
for good to them who love God, and to them who are called 
according to God's purpose. Ladies and gentlemen, we have done 
that today. And I just want to say from the bottom of my heart, 
thank you, and God bless you. I want you to know that this 
testimony that we have had today will become the basis, the 
foundation of the legislation that we are working on in our 
Committee right now to address racial discrimination against 
our Black farmers, and it will be on two major foundations, all 
of what you said. We will make it wrong, unlawful for all and 
each of the discriminatory practices that you all have outlined 
to us will be in this legislation, written into law that never 
again will we have any of the discriminatory practices that you 
all have exposed for us today within our United States 
Department of Agriculture. But this legislation isn't going to 
stop there, because the fundamental problem that we have is to 
make sure that we increase the market share of the products 
that our Black farmers are bringing and producing to the 
agricultural market. We are going to have some incentives in 
there so that we can increase that. We will also have things in 
this bill that will increase the number of Black farmers we 
have, the acreage we own, but we had to hear from you first, 
and you have outlined God's purpose that He has brought you and 
me and this great Committee together.
    And so, right now, I want to introduce and have my partner, 
because let me tell you this. You didn't just hear from 
Democrats today who said they are concerned to eliminate the 
racial discrimination. You heard from Republicans. And let me 
tell you something else. That great Republican, Abraham 
Lincoln, who freed the slaves, he not only did that. When he 
created the Agriculture Department, it was Abraham Lincoln who 
said this is the people's department. Abraham Lincoln said 
that. I think that, and his freeing of my people and our Black 
people makes him the final statement that I want to make before 
I introduce my Republican friend. Because let me tell you all 
this. We talk about that 1890s land-grant African American 
colleges and universities. It was a Republican Senator named 
Senator Morrill. It was the Morrill Act that established the 
land-grant colleges in 1860, and then after Plessy v. Ferguson, 
that is when it was separate but equal established. And 
everywhere there was a White land-grant by law, it was the same 
Republican Senator Morrill and it is called the Morrill Act. It 
was he who established the 19 land-grant colleges and 
universities. That is why I am telling you, man, we did God's 
work in here today, Republicans and Democrats together, and 
Republicans and Democrats are going to put this bill together 
that is based upon what you all have testified and asked us to 
put into this bill.
    And now, with that, I want to present my distinguished 
partner and the Ranking Member, Congressman Thompson.
    Mr. Thompson. Well, Mr. Chairman, thank you, David. I 
appreciate the partnership as we work for this amazing industry 
of agriculture that provides the food and the fiber, the 
building materials, construction materials, all come off of 
agriculture land. I would like to say without a robust rural 
economy, every American is going to wake up in the cold, dark 
and hungry. And so, thank you for this hearing today. I thought 
it was a great hearing.
    First of all, thank you to all of our witnesses. Your 
written testimony, your oral testimony was compelling. It was 
insightful. You made it passionate and personal, and so, I 
think we succeeded. And so, thank you to each and every one of 
you. Thank you to all the Members that weighed in and 
participated and asked thoughtful, insightful questions. I 
would be remiss, if both the Chairman and I wouldn't say thank 
you to all the staff, both Committee staff of both parties, and 
quite frankly, the agriculture staff of these individual 
Members who put their heart and soul into working on this 
issue.
    This is a conversation that was long overdue, and the fact 
that we have elevated this, we have had this conversation we 
have--if we are going to really achieve that vision that I 
think we share of restoring a robust rural economy, that means 
we have to lift everyone up and we can leave no one behind. I 
think the discrimination that we have seen a record of in the 
past, the documentation, whether it was systemic in terms of 
policy or whether it was the attitudes that were unacceptable, 
just cruel attitudes that certain folks perhaps had that had 
authority at USDA. Their time has passed. I am confident we 
have a Secretary that will be a great partner with us as we go 
forward. I am confident that we will learn from this, and the 
practices that we have in place.
    I am also very proud of what we have done in the past 
couple farm bills in terms of the set asides that we put out 
there for Black farmers and socially disadvantaged farmers, and 
so, I think we have momentum. We got great momentum, but we 
need to build on it, and I think we just have the right farm 
team together, let me put it that way, to be successful.
    So, once again, thank you to all the witnesses. Mr. 
Chairman, thank you. I yield back.
    The Chairman. Thank you. Yes, and I wanted to just use my 
closing remarks to thank this panel.
    Secretary Vilsack, God bless you, my friend. You came and 
you stayed for this entire hearing, and you heard what I heard. 
And the reason that is so important is that you and I and our 
Committee, along with this testimony that we have heard from 
Mr. John Boyd, from Mrs. Shirley Sherrod, from Mrs. Arnetta 
Cotton and Earrak Cotton, from Cornelius Blanding, from Sedrick 
Rowe, and from Philip Haynie, what a blessing that God has 
given us with the wisdom, the information that these 
individuals have given to you and me and this Committee. Now 
our charge is to take this wisdom, take what they are asking us 
to do.
    This bill that we will be working on to end, end racial 
discrimination in the United States Department of Agriculture 
and in our wonderful world of agriculture, our entire industry, 
we will be able to do. And let me assure you, this is truly 
God's work, and I want to thank again my Republican partner, 
because he and I have to put this bill together. But we 
couldn't do it until we heard from the Black farmers, and that 
is what we will base this on.
    Mr. Secretary, I want you to know from me personally what 
your participation in this hearing means. Not just from me, not 
just for our Committee, but the entire nation to see you here 
because so many of these charges of racial discrimination were 
laid at your feet. This is why it is so important that we 
recognize your participation and the fact of your willingness 
to be the leader in making sure that your Agriculture 
Department of which you lead will eliminate all vestiges of 
discrimination. I couldn't do it. None of us can do it. The 
only one that can make sure, regardless of what we put in the 
law or paper, is because we have the Secretary of Agriculture 
that is built on the legacy of the man who put our agriculture 
together, and who freed Black people from the vestiges of 
slavery when he called the Department of Agriculture the 
people's department. Abraham Lincoln did that, and that is 
whose shoulders we stand on this day. And I thank you so much 
for being a part of this. God bless you, and God bless this 
panel. Thank you.
    Under the Rules of the Committee, the record of today's 
hearing will remain open for 10 calendar days to receive 
additional material and supplementary written responses from 
the witnesses to any questions posed by a Member.
    This hearing of the Committee on Agriculture is adjourned. 
Thank you.
    [Whereupon, at 4:29 p.m., the Committee was adjourned.]
    [Material submitted for inclusion in the record follows:]
  Submitted Letters by Hon. David Scott, a Representative in Congress 
                              from Georgia
                                Letter 1
on behalf of james bunch, president/chief executive officer, bunchology 
                                  llc
March 24, 2021

  Hon. David Scott,
  Chairman,
  House Agriculture Committee,
  Washington, D.C.

  Subject: Agricultural Outreach Project To Increase the Number of 
            Black Farmers in the U.S.

    Dear Chairman Scott:

    Bunchology LLC is a disadvantaged small minority owned business 
eligible for contracts and grants from the U.S. Government. The owner 
is an American with a disability. Eliminating food deserts and 
increasing the number of Black farmers is a must during this critical 
time in our country. I would like to make you aware of the following 
project that will help the Administration address these concerns and 
build back better. The title of this Initiative is: ``How The Hip Hop 
Farmers Youth Initiative and the Divine Nine (Black Greek 
Organizations) Can Help The Administration Build Back Better By 
Tackling Food Deserts In Historically Underserved Communities''. This 
project will create approximately 2400 jobs for economically distressed 
and poverty stricken communities. It will be a multi-state (25) and 
multi-million dollar Initiative.
    President Biden often speaks of how he is keenly aware that Black 
Americans played a major role in his victories and that he is committed 
to addressing their specific concerns. He has often stated that he will 
ensure that Black businesses will receive their fair share of 
government contracts and agreements during his Administration. Several 
months from now when the President and Vice President are going around 
the country highlighting their accomplishments specifically for the 
Black community, my goal is for this project to be one of their stops. 
In light of President Biden's Executive Order ``On Advancing Racial 
Equity and Support for Underserved Communities Through the Federal 
Government'', I believe this Initiative would address his commitment to 
be Bold and Go Big!
    Therefore, my ask of you is that you please share the attached 
Proposal through the proper channels with Secretary of Agriculture Tom 
Vilsack and Deputy Secretary of Agriculture Jewel Bronaugh. I am 
seeking a Cooperative Agreement with the Department to fund my Project. 
I respectfully request a written response from the Secretary within 15 
days from the date of this letter.
    I would like to thank you for your assistance with this request. 
Please do not hesitate to contact me if you have any questions or need 
additional information.
            Warmest Regards,

James Bunch, President/CEO
Bunchology LLC

Cc:

Theodis Bunch, USDA Retiree, Pine Bluff, AR
Orlando Phelps, USDA Retiree, Hermanville, MS
Clifton E. Peters, USDA Retiree, Lorman, MS
Eddie L. Bunch, USDA Retiree, Carlisle, AR
Willie J. Terry, USDA Retiree, Greenville, MS
                               attachment
Summary
    Project Title: How the Hip Hop Farmers Youth Initiative and the 
    Divine Nine (Black Greek Organizations) Can Help the Administration 
    Build Back Better By Tackling Food Deserts in Historically 
    Underserved Communities
    Project Start Date: October 1, 2021
    Project End Date: September 30, 2022

    Bunchology LLC was developed by James Bunch, President/CEO to 
provide the following services to the U.S. Department of Agriculture:
    Increase the number of New and Beginning farmers among historically 
underserved groups/individuals such as Veterans, Community Based 
Organizations, and socially disadvantaged youth. Provide technical 
assistance and training to these groups/individuals on how to start a 
business in vegetable crop production utilizing the Seasonal High 
Tunnel System.
    The collaborators for this project will be one hundred (100) 
historically underserved farmers, land-grant colleges and universities 
and one hundred (100) Divine Nine local Black Greek chapters located 
throughout the twenty-four (24) states and the District of Columbia. 
Selected states include Alabama, Arkansas, California, Florida, 
Georgia, Illinois, Indiana, Louisiana, Maryland, Michigan, Minnesota, 
Missouri, Mississippi, New Jersey, New Mexico, New York, North 
Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, 
Virginia, Washington, D.C., and Wisconsin. The critical need for this 
project is due to the lack of the availability of healthy foods (fresh 
fruits and vegetables) in these communities which are impacted by food 
deserts. A team of twelve (12) retired USDA professionals will provide 
the leadership/expertise to ensure the development of one hundred (100) 
demonstration farms to include the construction of two hundred (200) 
seasonal high tunnel systems (30 x 72) to facilitate the production 
of fresh fruits and vegetables and training to project participants.
    Expected outcomes:

   Increased availability of fresh fruits and vegetables in the 
        targeted states[;]

   Economic boost in the targeted area due to job creation 
        (approximately 2,400)[;]

   Increase in the number of new and beginning farmers among 
        historically underserved groups (approximately 100); and

   Increase in students pursuing degrees in the food and 
        agricultural sciences, thereby increasing the pool of 
        candidates eligible for USDA career opportunities.

    Contact:

    James Bunch, President/CEO
    Bunchology LLC
    Phone: 901-315-6008
    Email: [email protected]
                                Letter 2
   on behalf of webster e. davis, senior policy advisor, family farm 
                                 action
April 4, 2021

  Hon. David Scott,
  Chairman,
  House Agriculture Committee,
  Washington, D.C.;

  Hon. Glenn Thompson,
  Ranking Minority Member,
  House Agriculture Committee,
  Washington, D.C.

RE: A Hearing to Review the State of Black Farmers in the U.S.

    Family Farm Action would like to thank Chairman Scott and Ranking 
Member Thompson for convening this hearing to review the state of Black 
farmers in the U.S. Discrimination against Black farmers is sewn into 
the fabric of U.S. agriculture. In 1910, Black farmers owned 16 to 19 
million acres of land and made up 14% of America's farmers, while in 
2017 Black farmers operated on just 4.7 million acres of farmland and 
accounted for 1.4% of farmers in the U.S. Much of this land loss can be 
attributed to discriminatory lending, particularly by the hands of 
USDA. We are grateful that Congressional hearings on the issues faced 
by Black farmers were held, as increasing awareness and dialogue is key 
to the proper courses of action.
    By calling for this historic hearing, it is clear the Members of 
this Committee recognize the need to address systemic racism in 
agriculture, and to work together to begin rectifying it. We are also 
encouraged by Secretary Vilsack testifying and confronting the 
discriminative actions toward Black farmers by the hands of USDA. The 
Secretary's commitment to rooting out this behavior in the agency, and 
affirming that racism and discrimination have no place in the 
agricultural sector on the whole. While encouraged by these 
commitments, we know that racism is pervasive and is experienced by 
Black farmers across this nation. We hope the testimony we hear today 
will bring about action and justice for Black farmers.
    The provisions in the American Rescue Plan Act of 2021 set a well-
rounded approach and build the solid foundation needed to address the 
ongoing legacy of systemic racism Black farmers experience in the 
United States. We applaud the passage of the American Rescue Plan which 
included full debt forgiveness, the creation of an Independent Civil 
Rights Oversight Board, and the creation of an Equity Commission. 
However, the work of this Committee and the Biden-Harris Administration 
has just started.
    Historic discrimination and exploitation of Black farmers, 
ranchers, and workers must be actively addressed and remedied. Policy 
must intentionally create equitable access for BIPOC folks to land and 
credit, market opportunities, safe working conditions, a seat at the 
policy development table, access to culturally relevant training and 
technical assistance, and just treatment by all Federal agencies. 
Family Farm Action Alliance issued key policy recommendations to the 
117th Congress,\1\ and has continued to request anti-racist development 
and implementation of prog[r]ams authorized by Executive Order and the 
117th Congress. Those recommendations that specifically call for anti-
racist food and farm policy and that we recommend for your 
consideration are included below.
---------------------------------------------------------------------------
    \1\ Family Farm Action Alliance. Toolkit for Congress. January 
2021. Available at https://farmactionalliance.org/toolkitforcongress/.

    Ensure full implementation and outreach of USDA COVID Stimulus 
Grants and Food Purchasing Programs authorized in the Consolidated 
---------------------------------------------------------------------------
Appropriations Act of 2021 and the American Rescue Plan Act of 2021.

   Use every resource necessary to reach all socially 
        disadvantaged farmers and provide technical assistance to 
        forgive all currently held loans

   Ensure all farmers receive USDA Consumer Data From AD-2047 
        and technical assistance to complete it, which allows them to 
        identify as a socially disadvantaged producer, and thus be 
        eligible for designated programs, funding, and support.

   Ensure all farmers receive USDA Program Discrimination 
        Complaint Form AD-3027 and technical assistance to complete it, 
        which allows them to file a complaint to USDA in cases of 
        discrimination.

   In the development of the USDA AMS COVID-19 stimulus grant, 
        we recommend at least 10% of funds be set aside for applicants 
        in persistent poverty counties as outlined in the Clyburn 10/
        20/30 formula,\2\ and a 10% set aside for BIPOC and women-owned 
        and operated food chain businesses.
---------------------------------------------------------------------------
    \2\ Congressman James. E. Clyburn. ``10/20/30 Formula to Fight 
Persistent Poverty.'' Available at https://clyburn.house.gov/10-20-30-
amendment.

   USDA should hold state and regional meetings inviting state 
        leaders to determine the best roll out plan for particular 
        regions and states to help insure an equitable distribution of 
---------------------------------------------------------------------------
        funds.

    Pass the Justice for Black Farmers Act: \3\
---------------------------------------------------------------------------
    \3\ 117th Congress: Justice for Black Farmers Act (S. 300).

   Forms a Black Farmer Land-Grant through a new line agency at 
        USDA where land of up to 160 acres would be available to Black 
        individuals at no cost.\4\
---------------------------------------------------------------------------
    \4\ Homestead Acts passed between 1862-1916 granted land in the 
amount of 160-640 acres, and prioritized people of European descent 
while excluding Black people. ``Forty acres and mule,'' a land-grant 
program that passed during the Civil War, granted land to formerly 
enslaved men. The program was poorly administered, and was revoked upon 
transition from the Abraham Lincoln to Andrew Jackson Administrations. 
As other ethnic and racial groups have historically been prioritized in 
land-grant programs and continue to benefit from their legacy, it is 
appropriate to prioritize Black individuals in a future land-grant 
program.

   Increases credit access and land retention for marginalized 
---------------------------------------------------------------------------
        farmers.

   Funds historically Black colleges and universities at a 
        level of $500 million per year for 10 years to expand 
        agricultural education.

   Provides additional funding and technical expertise to 
        assist with resolving heirship issues for existing Black 
        farmers.

   Strengthens existing antitrust enforcement through the 
        Packers and Stockyards Act, with the knowledge that food chain 
        workers of color are additionally vulnerable to economic and 
        labor exploitation.

    Fund 1890 Land-Grant Universities:

   Appropriate 1890 college payments and 1890 cooperative 
        extension funds to the same Federal level as 1862 land-grant 
        college payments and cooperative extension funds, and require 
        states to meet the Federal match. Often, 1890 university 
        appropriations fall short of 100% funding, while 1862 
        university appropriations often exceed ``full'' funding.

   Discontinue the use of funding waivers used by states to 
        side-step appropriating 1890 universities to the same level as 
        the respective state's 1862 land-grant college.

   Fully investigate claims of state under-funding of 1890 
        universities and cooperative extension programs.

    Support New and Beginning Farmers:

   Forgive student loan debt so farmers and aspiring farmers 
        may pursue agriculture without the massive burden of debt.

   Change USDA lending authority to prequalify beginning 
        farmers for FSA loans, and provide no interest loans to 
        beginning BIPOC farmers and BIPOC-led cooperatives.

    Support All Ownership and Aggregation Structures:

   Provide oversight of the implementation of the order for 
        USDA to examine the impacts of current land tenure disputes 
        regarding Heirs' property, fractured allotments, and Colonias 
        as directed in the 2018 Farm Bill.\5\
---------------------------------------------------------------------------
    \5\ Agricultural Improvement Act of 2018: Sec. 12607. 7 U.S.C.  
2204i.

   Fully implement the program to allow operators on Heirs' 
        property to obtain a FSA farm number as directed in the 2018 
        Farm Bill.\6\
---------------------------------------------------------------------------
    \6\ Agricultural Improvement Act of 2018: Sec. 12615. 7 U.S.C.  
6622b.

   Order ERS to study and make recommendations on Federal 
        cooperative ownership standards, to remedy the current state 
        patchwork policies regarding cooperative establishment, 
---------------------------------------------------------------------------
        ownership, public-private collaboration, and operation.

    Acknowledge Past Discrimination by Protecting Workers and 
Championing New Programs:

   In the agrifood supply chain, immigrants and people of color 
        are overrepresented in U.S. food chain worker demographics. In 
        meatpacking, 44.4% of workers are Hispanic, and 25.2% are 
        Black.\7\ Food chain workers are often talented 
        agriculturalists that have not been able to secure land to farm 
        or safe, secure employment due to monopolistic business 
        practices. To begin addressing this, create a Federal fund with 
        mandatory contribution by mega-food chain employers to place 
        food chain workers who have left due to exploitative conditions 
        to gain employment in an independent, non-monopolized entity in 
        the same sector, including payments to current and former food 
        chain workers who experienced adverse health and exploitative 
        working conditions.
---------------------------------------------------------------------------
    \7\ Shawn Fremstad, Hye Jin Rho, & Hayley Brown. April 29, 2020. 
``Meatpacking Workers are a Diverse Group Who Need Better 
Protections.'' Center for Economic and Policy Research. Available at 
https://cepr.net/meatpacking-workers-are-a-diverse-group-who-need-
better-protections/.

   Enact the Safe Line Speeds in COVID-19 Act \8\ to suspend 
        and not issue any new line speed waivers, and permanently 
        suspend the implementation of the New Swine Slaughter 
        Inspection System.\9\
---------------------------------------------------------------------------
    \8\ 116th Congress: Safe Line Speeds in COVID-19 Act (S. 4338).
    \9\ Federal Register. New Swine Slaughter Inspection System Final 
Rule. Vol. 84, No. 190. October 1, 2019. Available at https://
www.govinfo.gov/content/pkg/FR-2019-10-01/pdf/2019-20245.pdf.

   Authorize funding to support the creation of racial equity, 
        diversity, and inclusion priorities in 4-H and other Federal 
        agricultural discovery programs curriculum so young people are 
---------------------------------------------------------------------------
        empowered to pursue a career in agriculture.

   Authorize the Consumer Financial Protection Bureau to 
        investigate claims of discrimination by Farm Credit Service 
        (FCS) institutions, and require FCS to meet SDFR lending goals.

    Family Farm Action reaffi[r]ms our deep sense of thanks to Chairman 
Scott for convening this hearing, those providing testimony, and the 
leadership shown thus far in the 117th Congress to address systemic 
racism and discrimination against Black farmers. We know there is much 
work yet to be done.
    Thank you for the opportunity to provide our testimony and input 
for the record. We look forward to working with you as you consider our 
recommendations.
            Sincerely,
            
            
Webster E. Davis,
Senior Policy Advisor,
Family Farm Action.
                                Letter 3
  on behalf of collis jones, vice president, u.s. policy & strategy, 
                            deere & company
March 25, 2021

 
 
 
Hon. David Scott,                    Hon. Glenn Thompson,
Chairman,                            Ranking Minority Member,
House Committee on Agriculture,      House Committee on Agriculture,
Washington, D.C.;                    Washington, D.C.
 

RE: Statement for the Record on ``A Hearing to Review the State of 
            Black Farmers in the U.S.''

    Dear Chairman Scott, Ranking Member Thompson, and Members of the 
House Committee on Agriculture:

    Thank you for holding this hearing and for the opportunity to 
submit these comments on behalf of Deere & Company (``Deere'').
    In 2020, Deere joined with other partners in forming an 
organization dedicated to improving the livelihoods of Black farmers. 
The LEAP coalition (Legislation, Education, Advocacy, and Production 
Systems) focuses on addressing the decades-long issue of heirs' 
property rights, in which no clear title to farmland is recorded.
    In the announcement issued by Deere launching the coalition on 
September 15, 2020, the following statement was made by Marc A. Howze, 
Group President, Lifecycle Solutions and Chief Administrative Officer: 
``Property ownership is a driver of economic growth for individuals and 
families. However, too often the benefits of ownership for those who 
lack clear title cannot be truly realized.''
    Joining Deere in the coalition are the Thurgood Marshall College 
Fund, National Black Growers Council and we are partnering with The 
Federation of Southern Cooperatives. These partners provide expertise 
that complements our company's legacy of serving farmers for nearly 200 
years. Further, the coalition builds on Deere's longstanding 
relationships with Black farmers and organizations that have 
traditionally supported them and also served as forceful advocates for 
social and economic justice.
    The basic principles defining LEAP and describing its mission are 
outlined below:

    Legislative:

   Support legislation on Heirs' Property reform.

   Serve as a conduit or partner in efforts to clearing title 
        for Black farmers.

    Education:

   Invest in Fellowships/Internships/Agribusiness paths.

   Engage in estate planning to prevent the further 
        proliferation of Heir's Property.

    Advocacy:

   Amplify the work of The Federation of Southern Cooperatives.

   Raise awareness regarding the issues and challenges 
        experienced by Black farmers.

    Production Systems:

   Education and training to support Long-term Sustainability 
        and Economic viability.

   Access to tools, technology and innovation.

    Land is a farmer's most valuable and productive asset. Yet a 
majority of Black farmers--who make up about two percent of the U.S. 
farm population--are believed to operate on property lacking a 
documented title. At the same time, the amount of land owned by Black 
farmers has fallen sharply, to less than 5 million acres compared with 
over 16 million acres a century ago. The decline occurred in large part 
due to discriminatory practices affecting how Black farmers acquired 
and transferred their land--a form of ownership commonly called 
``heirs' property.'' Many landowners also lacked the resources for 
formal estate planning and passed property to their heirs without a 
will. Over generations, this practice led to increasingly fractional 
ownership and unclear titles.
    Without such title, farmers cannot use their property as collateral 
for loans and often cannot participate in government farm-support 
programs or receive emergency or disaster-relief aid. To this end, 
securing clear title helps eliminate systemic barriers to land 
improvement and wealth building that have constrained many farmers, 
particularly those in minority or underserved groups, across the United 
States.
    Black communities in southern states have been disproportionately 
affected by these issues. However, similar situations exist in other 
populations and geographies. These include White communities in 
Appalachia, Native Americans on Tribal lands, and Hispanic communities 
in southwestern United States. Each of these constituencies stand to 
benefit from LEAP's work.
    Deere has a proud history supporting racial equality as reflected 
by our longstanding support for Minorities in Ag Natural Resources and 
Related Sciences (MANRRS), the National Black Growers Council, 1890's 
land-grant institutions and other organizations supporting Black 
entrepreneurs and social justice organizations.
    In addition, Deere has engaged in the work of a special committee 
on racial equity and social justice of the Business Roundtable. The 
group's finance subcommittee, of which Deere's Chairman and Chief 
Executive Officer John C. May is a member, focuses on providing access 
to capital in minority communities and on other factors contributing to 
persistent income disparity.
    In our view, Deere is uniquely positioned to help promote public 
policy solutions and corporate initiatives that help underserved 
farmers gain access to capital and enjoy the advantages that come with 
proven land ownership. We believe, moreover, the impact of Deere's 
leadership on this issue can be further leveraged through our 
participation in organizations such as LEAP.
    Deere's partners in the coalition are providing the educational, 
legal, and technical resources to help disadvantaged farmers secure 
clear title to their land and acquire the technology and tools 
necessary to make their operations more profitable, productive, and 
sustainable.
    Deere has made a number of investments to help ensure LEAP's 
success and remove the systemic barriers undermining the success of 
Black farmers. Among these is a collaboration with our dealer Tellus 
Equipment to fund and support two lawyers working on land retention 
efforts, making a 5 year commitment to serve as title sponsor of the 
Federation of Southern Cooperative's Heirs' Property Conference and 
expand its investment in the cooperative's programming.
    In addition, Deere is providing funding for legal interns recruited 
through the Thurgood Marshall College Fund to work at the Federation of 
Southern Cooperatives. Deere has created a full-time position within 
the company to oversee the LEAP effort and ensure its success.
    Deere is committed to helping farmers, regardless of size or 
background, have access to the vital resources needed to achieve 
success and sustain their operations for generations to come. The LEAP 
coalition reinforces this goal by addressing the issue of heirs' 
property ownership and helping disadvantaged farmers secure clear title 
to their land.
    Thank you for the opportunity to address these important issues and 
to share additional information on Deere's partnership with members of 
the LEAP coalition. Should the Committee have any additional questions 
for Deere, we welcome the opportunity to speak with you.
            Sincerely,
            
            
Collis Jones,
Vice President, U.S. Policy & Strategy.

Cc: Members of the House Committee on Agriculture.
                                Letter 4
on behalf of duane simpson, vice president, north america government & 
                  industry affairs, bayer crop science
February 18, 2021

  Hon. Debbie Stabenow,
  Chairwoman,
  Committee on Agriculture, Nutrition, and Forestry,
  United States Senate,
  Washington, D.C.;

  Hon. David Scott,
  Chairman,
  Committee on Agriculture,
  United States House of Representatives,
  Washington, D.C.

    Dear Chairwoman Stabenow and Chairman Scott:

    Bayer applauds the introduction of [S. 278], the Emergency Relief 
for Farmers of Color Act. This critical legislation introduced by 
Senators Warnock, Stabenow, Booker, Leahy, Lujan and Klobuchar, and 
included in the American Rescue Plan, is an important relief measure as 
it would forgive U.S. Department of Agriculture (USDA) loan debt for 
farmers of color and provide funding for outreach, research on heirs' 
property, and other efforts to assist minority farmers. The $4 billion 
in debt relief, and the $1 billion in additional funds, is part of the 
$16 billion COVID-19 relief plan, which will add to the approximately 
$40 billion farmers have received this past year.
    Bayer recognizes the importance of remedying the longstanding 
systemic disadvantages facing farmers of color. As documented by 
Congress and acknowledged by USDA, Black, Indigenous, and Hispanic 
farmers have dealt with limited access to credit and are often left out 
of Federal aid. We commend the Members of Congress who have taken steps 
to ensure the Federal Government addresses its past mistakes.
    We also understand that it is not only just the Federal 
Government's responsibility to treat farmers of color fairly. We, too, 
continue to have conversations around, and seek to be conscious of, how 
our products and programs are meeting the needs of minority farmers.
    As a company that serves farmers of every background, Bayer remains 
committed to supporting our customers of color as they push for equity 
in our food and agriculture system.
            Sincerely,
            
            
Duane Simpson,
Vice President,
North America Government & Industry Affairs.

CC:

U.S. Department of Agriculture
The Honorable John Boozman
The Honorable Glenn `GT' Thompson
The Honorable Raphael Warnock
The Honorable Cory Booker
The Honorable Patrick Leahy
The Honorable Ben Ray Lujan
The Honorable Amy Klobuchar
                                 ______
                                 
    Submitted Presentation by Hon. David Scott, a Representative in 
   Congress from Georgia; on Behalf of Bernice Atchison, Farmer from 
                                Chilton 
                    County, AL and Pigford Historian
The Seven Tiers of the Black Folks Plan for Black Farmers


























































































































































                                 ______
                                 
Submitted Statements by Hon. David Scott, a Representative in Congress 
                              from Georgia
                              Statement 1
     on behalf of navina khanna, executive director, heal (health, 
             environment, agriculture, labor) food alliance
April 4, 2021

    The HEAL (Health, Environment, Agriculture, Labor) Food Alliance 
(HEAL) is grateful for the opportunity to submit written testimony 
regarding the recent hearing on the State of Black Farmers.
    HEAL is a national multi-sector, multi-racial coalition led by 
Black, Indigenous and People of Color (BIPOC) that is building 
collective power to transform our food and farm systems for the health 
of our communities and the planet. Our 50+ member organizations 
represent over two million rural and urban farmers, ranchers, fishers, 
public health advocates, farm and food chain workers, Indigenous 
groups, scientists, policy experts, community organizers, and 
activists. Together, we are creating systems that are healthful for our 
families, accessible and affordable for all communities, and fair to 
the hard-working people who grow, distribute, prepare, and serve our 
food--while protecting the air, water, and land we all depend on.
    Our members know too well that the legacies of chattel slavery, 
colonization, and the historical and current realities of institutional 
racism have direct bearing on the socioeconomic status of Black people 
nationwide. Longstanding structural and institutional racism have 
excluded Black people from access to land, financial resources, 
information, political standing, and educational and professional 
trajectories. Such exclusion has prevented truly sustainable food 
systems from being established, and created enormous barriers for 
communities seeking to maintain or revive culturally appropriate 
foodways and to live in balance with their ecosystems. Strengthening 
support for Black people within the agriculture sector, on the other 
hand, can establish paths toward long-term prosperity while helping to 
secure the future of sustainable and resilient food systems.
    We commend the House Committee on Agriculture for taking up the 
important, long overdue issue of support for Black farmers. Below, you 
will find recommendations from our members, and we look forward to 
being in continued conversation with your respective staff and 
departments as we collectively undertake the hard work of righting 
historic wrongs and collaborating together for a future that works for 
all people--and the health of our planet.
    No one organization, including HEAL, can speak for all Black 
communities working across our food and farming system, and we are 
aware that we are part of an ecosystem that includes Black agricultural 
communities with diverse strengths, challenges and perspectives. HEAL's 
analysis continues to be informed by our membership and key leaders in 
the landscape such as the National Black Food and Justice Alliance, 
Soul Fire Farm, Land Loss Prevention Project and many more unheralded 
grassroots leaders. These are the communities that have been doing the 
hard work of addressing Black land loss over the last few decades and 
fighting for the ability to be in the right relationship with the land 
and one another. Below, we offer testimony and recommendations from our 
membership.
    According to the most recent United States Department of 
Agriculture (USDA) Census data, approximately 95% of farmland owners 
are white.\1\ For reference, in 1920 the United States had about 1 
million \2\ Black farmers; however as of the 2017 Census of 
Agriculture, this number is closer to 45,000,\3\ and just 0.52% \4\ of 
the total farmland in the country is owned or operated by a Black 
farmer. This is a glaring problem and a consequence of a system 
designed to dispossess Black people of wealth, and Black farmers of 
land. There is a long and detailed history of discrimination by the 
USDA and documented efforts by Black farming and civil rights leaders' 
to right these wrongs through legal means such as the Pigford cases, 
policy initiatives within the farm bill and advocacy at local (state, 
county, city, etc.) levels.
---------------------------------------------------------------------------
    \1\ https://www.nass.usda.gov/Publications/Highlights/2019/
2017Census_Farm_Produc
ers.pdf.
    \2\ http://usda.mannlib.cornell.edu/usda/AgCensusImages/1920/
Farm_Statistics_By_Color_
and_Tenure.pdf.
    \3\ https://www.nass.usda.gov/Publications/Highlights/2019/
2017Census_Farm_Produc
ers.pdf.
    \4\ https://www.nass.usda.gov/Publications/Highlights/2019/
2017Census_Farm_Produc
ers.pdf.
---------------------------------------------------------------------------
    At HEAL, we join our members in support of efforts that aim to 
address issues of land access and tenure such as the Justice for Black 
Farmers Act. We recommend fully supporting the Justice for Black 
Farmers Act and our members' contributions to the legislation are 
rooted in the wisdom of lessons from past failures and investment in 
steps towards a radical reclamation of what we know our communities 
need and deserve. We also support the greater call for reparations for 
Black communities. As voiced by some of our members:

          Over the past 100 years, 98% of Black farmers have been 
        dispossessed of their land, driving the median age of the Black 
        farmer up to 62 years and the share of Black operators down to 
        1.4%. Passage of the Justice for Black Farmers Act is essential 
        to right the wrongs endured by our legacy farmers and to 
        provide opportunities for the next generation of Black farmers. 
        Soul Fire Farm, a NY-based rural training center for Black and 
        BIPOC farmers, has observed a clamor of interest for careers in 
        agriculture and maintains a multi-year waiting list for its 
        programs. The time is now.
                   Leah Penniman, Founding Co-Director, Soul Fire Farm.
          The National Black Food & Justice Alliance's work to build 
        Black Land and Power and Self Determining Food Economies is 
        inspired by and in honor of Mrs. Dorothy Wise, a Black farmer 
        who made her transition after being forcibly displaced from her 
        farmland with her husband by armed U.S. Marshalls in 2016 based 
        on USDA discriminatory lending practices.
  Dr. Jasmine Ratliff, Policy Manager, National Black Food and Justice 
                                                              Alliance.

    The U.S. Government can and should focus on an ``invest/divest'' 
framework, moving away from harmful practices and investing instead in 
the sustainability, well-being, and safety of all communities with 
community-controlled solutions.
    The U.S. Government can make it easier for Black people to access 
and retain land by:

   Providing grants, subsidies, and incentives to make it 
        easier to finance and own land. These should include mechanisms 
        facilitating land ownership transitions, as well as reparations 
        to return appropriated land and to reverse land-grabs.

   Providing legal aid to help Black people access and retain 
        land. For example, grants from USDA could fund law schools to 
        offer legal clinics providing free or low-cost, culturally 
        competent legal services tailored to Black farmers. Given 
        evidence of ongoing discrimination, the USDA should also 
        require an independent review of drivers and preventive 
        measures prior to foreclosures of Black-owned farmland 
        (Rosenberg and Stucki 2019; Keepseagle v. Vilsack; Cowan and 
        Feder 2013).* And, government should fund increased legal 
        support for the formation of cooperative ownership structures 
        that help Black people access and retain farmland (Taylor 2018; 
        Calo and De Master. 2017; Gies 2018).
---------------------------------------------------------------------------
    * Editor's note: the in-text citations contained in this statement 
do not have a corresponding list of citations at the end of the 
document, nor is there internal citation information within the 
document. It has been reproduced herein as it was received.

   Reforming heirs' property laws that can protect landowners 
        from involuntary land loss (Mitchell 2016). The USDA must 
        implement the planned changes in the 2018 Farm Bill to expand 
        and regularize the types of documentation that can be used by 
        heirs' property owners to qualify for USDA credit and 
---------------------------------------------------------------------------
        conservation program eligibility (DeCaille 2018).

   Generating land-focused reinvestment, for true community 
        self-determined economic development.

    The U.S. Government can support Black farmers, particularly those 
practicing community-based, sustainable agriculture, in achieving 
financial security and resilience, by:

   Expanding financial supports, including within key USDA 
        programs that offer technical assistance (for example, the 
        Conservation Stewardship Program) and grants for capacity 
        building, such as the Farming Opportunities Training and 
        Outreach program, the Sustainable Agriculture Research and 
        Education program, and the Gus Schumacher Nutrition Incentive 
        Program. Barriers to participation should be identified and 
        eliminated, such as by recognizing traditional best management 
        practices and ecological knowledge in the evaluation of 
        applications and proposals.

   Ending discriminatory lending practices and other mechanisms 
        of land seizure.

   Promoting community-led and -centered programming to promote 
        and financially facilitate sustainable business ownership among 
        economically marginalized populations.

   Improved access to loans, including low-interest and micro-
        loans, as well as loans not requiring collateral. The USDA's 
        Farm Service Agency launched a micro-loan program in 2013 to 
        better meet the needs of underserved farmers (FSA 2019; Tulman, 
        et al., 2016), but the limit on annual funding available must 
        be raised (NSAC 2019).

   Financial safety nets, such as insurance and relief 
        programs. Since the USDA does not currently publish rates of 
        and utilization of Federal crop insurance or disaster payments 
        across racial and ethnic groups, transparency is needed to help 
        guide improvements.

   Fair, sustainable markets that support Black farmers and 
        reward social and ecological well-being. Direct marketing, 
        farm-to-institution arrangements, food hubs, and market 
        diversification can raise incomes and financial viability and 
        can be strengthened through grants, initiatives, and 
        institutional procurement commitments that are inclusive of and 
        accessible to these communities (Hand 2010; Key 2016; Cooper 
        2018). Developing markets for ethnic specialty crops and 
        culturally relevant fruits and vegetables can leverage skills 
        while also contributing to local economies (WF 2019).

    The government can also advance the quality and equity of 
infrastructure and information. Currently, Black farmers have less 
access to, ownership of, and control over several key resources related 
to infrastructure and information that are pivotal in establishing 
successful, resilient, and sustainable farms. For example, fewer Black 
farmers have access to internet service relative to white farmers (USDA 
2019). Public research institutions have not served Black farmers 
equitably and have, in some cases, been used as mechanisms for 
exclusion (Lee and Keys 2013; Ammons, et al., 2018; Lee and Ahtone 
2020).
    USDA programs can help level the playing field through the 
following:

   Infrastructure investments--such as targeted grants and 
        incentives--are needed to fund BIPOC-led improvements on-farm 
        (such as washing, packing, storage and processing facilities) 
        and in communities (funding such things as internet access, 
        kitchen equipment in school cafeterias to enable local sourcing 
        from Black farmers).

   Technical assistance and outreach that serves Black farmers, 
        including by recognizing traditional ecological knowledge and 
        management as best practices. Such programs should hire 
        culturally competent community representatives and service 
        providers (e.g., lenders, insurance agents, extension agents, 
        educators).

   Research and education that includes and engages directly 
        with Black farmers and communities. For example, land-grant 
        institutions should be accountable to a revitalized public 
        mission supporting such work, including sharing resources with 
        community-based organizations. Additional resources should be 
        directed to the 1890 land-grant institutions (Historically 
        Black Colleges and Universities), to ensure they have the same 
        services and support as the land-grant institutions originally 
        chartered in 1862 (Lee and Keys 2013).

    Perhaps most critically, the U.S. Government must ensure diverse 
representation and leadership across agricultural decision-making, 
including grant panels, advisory boards, and committees.
    Removing discriminatory barriers to Black farmers and their 
networks, and supporting their leadership in sustainable and community-
driven farming, will advance the equity and resilience of the nation's 
food systems (HEAL Food Alliance 2018; Carlisle, et al., 2019).

          The roadmap for how Black people, and other communities of 
        color, have been subjugated politically, culturally and 
        economically, is illustrated by the history of the U.S. Food 
        system. While racial equity has a new popularity in our 
        political system, the real work to address the severed 
        relationships Black and Brown farmers have experienced lies in 
        building and restoring our relationships to the land, to our 
        culture, to healthy and nutritious food, to the tools and 
        resources for economic autonomy, and to building political 
        power for the decision-making that impacts our communities. The 
        USDA and other areas of our Federal and local governments must 
        commit to removing corporate influence in our government and 
        then to reinvesting in a long-term relationship with farmers of 
        color to build democratic, healthy and sustainable regional 
        food systems.
                 Midwest Farmers of Color Collective Coordination Team.

    In partnership with grassroots communities, the U.S. Government has 
a critical role in creating opportunities for Black people in farming 
that will pave the way toward long-term prosperity and sustainability.

          Black farmers and ranchers have faced and continue to face 
        systemic discrimination in USDA programs, leading to lack of 
        access to credit and generational land loss. Moving forward, it 
        is essential that USDA policy--whether related to credit, land 
        access, or climate--prioritize investment in Black farmers in a 
        structured way. Land Stewardship Project, as an organization 
        with a primarily white membership base in rural Minnesota, 
        Wisconsin, and the Midwest, stands in solidarity with our Black 
        farmer and community members.
                             Jessica Kochick, Land Stewardship Project.

    Thank you for the opportunity to submit written testimony.
            Sincerely,
            
            
Navina Khanna,
Executive Director,
HEAL (Health, Environment, Agriculture, Labor) Food Alliance.
                              Statement 2
 on behalf of tanya ward jordan, president, coalition for change, inc. 
                                 (c4c)
    As President of the Coalition For Change, Inc. (C4C), I (Tanya Ward 
Jordan) submit the present statement for inclusion in the hearing 
record on the State of Black Farmers in the United States.
    The C4C is a public interest volunteer and whistleblower group 
formed to eradicate employment discrimination and retaliation in the 
Federal sector. It also serves as an informational support network for 
present and former Federal employees injured due to such unlawful acts. 
U.S. Department of Agriculture's (USDA) employees have complained to 
our organization about widespread discrimination. We find such reports 
most troubling.
    The C4C recognizes that the culture of internal workplace 
discrimination harms employees. It also hampers USDA's ability to 
provide fair and efficient services to the Black farmers. One key 
measure we can take to improve the profitability and sustainability of 
Black farmers is to bolster the Equal Employment Opportunity 
Commission's (EEOC) oversight of USDA's complaint activity. Towards 
this goal, C4C recommends that the House Agriculture Committee inquire 
into the U.S. EEOC's hearing, appeal, and field audit activity linked 
to USDA complaints.
    It is key to note that the C4C had been meeting with Mr. Carlton 
Hadden, EEOC's Director of the Office of Federal Operations, (OFO), to 
recommend and spur reforms that would address the culture of racism, 
sexism, and intimidation operating within the USDA that impacts Black 
farmers, USDA employees and other Federal employees. To our dismay, the 
EEOC's efforts to address C4C's recommended EEO reforms and Federal 
employee concerns halted abruptly after the 2016 United States 
presidential election.
    Notwithstanding any inaction of the EEOC, I along with Paulette 
Taylor, the C4C's Civil Rights Chair, presented Equal Employment 
Opportunity (EEO) reforms to the late Representative Elijah Cummings. 
He first introduced our crafted reforms in H.R. 1557 \1\ Federal 
Employee Antidiscrimination Act of 2015 and later in H.R. 135. 
Remarkably, on January 1, 2021, lawmakers adopted and included the EEO 
reforms we presented to the late Congressman in the law aptly called 
the Elijah Cummings Federal Employee Antidiscrimination Act of 2020. 
[The reforms can be found under the William M. (Mac) Thornberry 
National Defense Authorization Act for Fiscal Year 2021.]
---------------------------------------------------------------------------
    \1\ See https://www.c-span.org/video/?c4545890/user-clip-coalition-
change-inc-instrumental-addressing-workplace-injustice.
---------------------------------------------------------------------------
    Expressly, Black farmers and employees complain that when 
discrimination is found, USDA rarely if ever disciplines law-breaking 
employees. A key reform in the Elijah Cummings Federal Employee 
Antidiscrimination Act calls for the EEOC to make disciplinary 
referrals to the Office of Special Counsel when discrimination is 
found. The C4C recommended this reform after learning, via Freedom of 
Information Act request, the EEOC had failed (over several years) to 
refer any cases to the OSC for possible disciplinary action.
    In closing, the EEOC can play a key role in addressing the 
discriminatory culture of USDA. An improved workplace culture will 
benefit the Black farmers and others seeking equitable treatment in 
need of USDA programs and services. For this reason, the C4C recommends 
that the House Agriculture Committee take a critical look into the 
EEOC's oversight of the USDA complaint program.\2\
---------------------------------------------------------------------------
    \2\ The EEOC, which is to eradicate discrimination, consistently 
fails to hold officials accountable for violating the Federal Equal 
Employment Opportunity Program guidelines. For example, a review of 
USDA data collected under the Notification and Federal Employee 
Antidiscrimination and Retaliation (No FEAR) Act reflects that the USDA 
is delinquent in posting No FEAR data and that for the ``2019'' period 
shown on average the USDA exceeded the 180 day complaint processing 
time for investigating complaints. As of April 2, 2021, USDA most 
recent post of No FEAR cumulative complaint activity covers Fiscal Year 
2019. See data at https://www.usda.gov/nofear.
---------------------------------------------------------------------------
                              Statement 3
         on behalf of rural coalition/coalicion rural, et al.*
---------------------------------------------------------------------------
    * Alabama State Association of Cooperatives; Concerned Citizens of 
Tillery; Cottage House, Inc.; North Carolina Association of Black 
Lawyers Land Loss Prevention Project; Oklahoma Black Historical 
Research Project, Inc.; Operation Spring Plant, Inc.
    For More Information Contact: John Zippert, RC Chairperson, Rural 
Coalition, Eutaw, Alabama; Lorette Picciano, Executive Director, Rural 
Coalition, 1029 Vermont Avenue NW Suite 601, Washington, D.C. 20005; 
Website: www.ruralco.org; Savonala (Savi) Horne, ESQ, Executive 
Director; Land Loss Prevention Project, 401 N. Mangum Street, 2nd 
Floor, Durham, NC 27701, www.landloss.org.
---------------------------------------------------------------------------
Introduction
    Black farmers have been some of our nation's most vital stewards of 
the land, productive and industrious farmers, and resilient and 
determined producers. Remarkably, they have also used their farming and 
business acumen to produce more generations of farmers and landowners, 
schools, college graduates, separate business ventures, progressive 
community organizations, and more. Many Black farmers and their 
communities thrived until they made the decision to acquire loans or 
other financing from the United States Department of Agriculture 
(USDA). The USDA was supposedly designed to help farmers in times of 
expansion, blight, and disasters. Yet, its racist lending and 
supervisory policies caused countless Black farmers unwarranted stress 
and heart ache, debilitating illnesses, financial ruin, constant 
threats of government takeover, and premature deaths. Consequently, 
Black farmers continue their more than century-old struggle for justice 
and equality from the U.S. Government.
    Matthew Grant (1918-2001) and Florenza Moore Grant (1921-2001) were 
farmers in Tillery, Halifax County, North Carolina. In the 1940s, they 
bought their family to the Tillery Resettlement Farms community under 
the Federal Resettlement Administration that offered landless rural 
people an opportunity for hard work and survival. The Tillery 
Resettlement (Colored Section) was established as a segregated 
community with African American families like the Grants receiving 
smaller farms, smaller houses, and less farm equipment than their white 
neighbors. African American farmers were offered an opportunity to 
purchase land in the flood plain of the Roanoke River, while the White 
area of the Resettlement was out of the river's reach.
    Toiling under the material and mental pressures of segregation, 
Matthew and Florenza raised a family and became leaders in their 
community. In the early 1970s, under pressures of mechanization of 
agriculture and competition from big agribusiness, they borrowed money 
under a U.S. Department of Agriculture (USDA) program that was supposed 
to help small farmers. They believed that unlike the local government, 
with its historical role in maintaining racial oppression, the Federal 
program would be fair and supportive of a rapidly disappearing pillar 
in the nation--the African American family farmer.
    By the late 1970s, the Grant family realized their hopes were 
misplaced. African American farmers were given smaller loans at higher 
rates than White farmers. In the spring, when White farmers were 
receiving funds to buy seed and fertilizer, African American farmers 
were still waiting for their loans. In the local Agriculture Department 
office, the Grants and their neighbors were told to wait until all 
White farmers had been seen first. They watched as checks were given 
out to Whites, only to be told that their money had not yet arrived. 
Loans to the Grants and other African American farmers were closely 
supervised, requiring extra signatures and trips to the county seat 
before farm supplies could be purchased. These hard working, proud 
survivors of the rural south, farming land that their slave ancestors 
worked for plantation owners, were treated with disrespect and racial 
hatred.
    Drought years and discriminatory practices prevented the Grants 
from repaying the loan during the 1970s. In 1981 they signed a Consent 
Judgment against their property in an agreement that the USDA would 
release farm equipment and the Grants would withdraw a discrimination 
lawsuit. This according to the USDA was a ``settlement of sorts'' that 
would allow the Grants to continue farming and moving on with their 
lives, but the USDA refused to work with them on a means of repayment 
on the delinquent debt. Subsequently, Matthew and Florenza's children 
tried to ``assume the debt,'' but their proposed monthly payment plan 
was not accepted. Matthew was actually told by the FmHA district 
director, ``It does not matter who you go to see, who you bring or what 
you come up with, we are going to sale you out.'' Meanwhile, White 
farmers who had been affected by crop losses were given flexibility to 
settle their debts. Matthew and Florenza did not deny the debt, but 
they protested that their financial situation had been worsened by 
illegal racists practices.
    In 1996, the USDA admitted that it had discriminated against the 
Grant family. However, they prevented the Grants from collecting the 
settlement that could have paid off their debt. Since that time the 
Grant family has worked without success to achieve a reasonable 
settlement with the government. Matthew and Florenza Moore Grant both 
died in 2001, 6 months apart from one another.
    The Grant family requests that the USDA clear the Matthew and 
Florenza Moore Grant family debt, meet with our family to discuss an 
adequate settlement for years of discrimination and turmoil, and assist 
our family with starting an agricultural education fund for young 
students interested in farming and being stewards of the land.
Cumulative Impact and Consequences of Discrimination
    Experiences such as that of the Grant family are not uncommon, when 
alternate financial arrangements are used to prevent permanent loss of 
land, especially when the underlying factor is discriminatory treatment 
by the government. The USDA has maintained that the Equal Credit 
Opportunity Act does not cover the impact of pain and suffering. The 
cumulative impact to the communities where these families farmed 
included a loss of feeling of good faith in any sort of debt settlement 
with the government. As a result, many farmers were unwilling to deal 
with USDA.
    The Secretary and the Congress are urged first to hear their 
stories. As Section 1006 of the American Rescue Plan is implemented, we 
also urge that the Secretary consider how BIPOC who've taken over 
family operations family farm can be given a release from prior debts 
as long as their debt arose out of some discriminatory actions. USDA 
and the Congress should take such action to assure that the cloud over 
the family is lifted so that the next generation farmers can 
participate in USDA programs on their own as new and beginning farmers. 
Their eligibility should not be barred because of a look back to debts 
of their parents or anybody else within their family who had the 
previous ownership of the farm.
    The following excerpt from the introduction of the Statement by 
John Zippert that the Federation of Southern Cooperatives/Land 
Assistance Fund and the Rural Coalition to the U.S. House of 
Representatives Committee on Agriculture Subcommittee on Conservation, 
Credit, Energy, and Research on March 27, 2007 summarizes our past 
recommendation Congress, including issues that remain relevant today:

          ``Collectively, the Federation, and the Rural Coalition and 
        its members and allies, have worked with thousands of farmers 
        on the intricacies of their dealings with USDA and to seek 
        structural change both administratively and in policy to assure 
        equity and accountability in programs and services.
          ``Over the past decade, we have supplied documents, analysis 
        and testimony to the Civil Rights Action Team, the National 
        Small Farms Commission, the U.S. Congress and the U.S. Civil 
        Rights Commission. A half dozen of us served on the National 
        Small Farms Commission, and we have also participated on other 
        committees and in many sessions with the Secretary and the 
        staff of the Department. We have led efforts to institute the 
        USDA Partners meeting held annually for the past 3 years to 
        allow USDA to develop relationships and understanding of the 
        work and experience of its Community Based Organization 
        Partners.
          ``Our collaborative legal and legislative work included the 
        1987 Agriculture Credit Act, the Minority Farmers Rights Act of 
        1990 that was accepted as section 2501 of the 1990 Farm Bill, 
        the 1994 Agriculture Reorganization Act, and collaborative 
        efforts towards passage of the 1999 Waiver of the Statute of 
        Limitations that removed a critical barrier to the settlement 
        of the longstanding class action lawsuits. Over the years, we 
        have also worked on disaster response, especially following 
        hurricanes Katrina, Rita and Wilma.
          ``We have also worked with this Committee on the most recent 
        2002 Farm Bill. We appreciate the support the Members of this 
        Committee who helped assure that structural changes instituted 
        to promote equity were included in that bill.
          ``The average age of farmers continues to rise, especially 
        among African American and other socially disadvantaged 
        producers. For many years, inadequacies and inequities in 
        programs and services have hastened the loss of African-
        American and other people-of-color owned farms. Access to 
        credit is essential for all agricultural producers and those 
        who aspire to be agricultural producers. This Committee has the 
        ability to take the actions needed to assure that new 
        generations of people of color farmers and ranchers will have 
        access to land and production.
          ``In my years of work with the Federation of Southern 
        Cooperatives/Land Assistance Fund, I have never met a Black 
        farmer who was not discriminated against. I believe the same is 
        true for most of the diverse group of African-American, Latino, 
        American Indian, Asian American and female farmers I have 
        encountered within the Rural Coalition. As you well know, there 
        remain issues surrounding the settlement of the Pigford v. 
        Veneman and other still pending class action lawsuits against 
        USDA that need to be addressed. We will provide a supplemental 
        appendix for the record with updated statistics of the status 
        of this settlement and on late claims.
          ``For the past several months, our organizations have worked 
        with a group of colleagues who represent a wide and diverse 
        array of minority farmer and farmworker organizations called 
        the Farm and Food Policy Diversity Initiative. As you begin 
        your work on the 2007 Farm Bill, we share with you the 
        collective wisdom of our organizations and our partners on some 
        essential changes that Congress can and should make in order to 
        prevent the actions that necessitated legal action in the first 
        place and assure transparency and accountability in the 
        provision of services.
          ``We want to help bring about the day when African American 
        and other minority farmers can turn their attention to growing 
        crops and revitalizing rural communities instead of filing 
        complaints and lawsuits to secure the equitable service to 
        which they are entitled in the first place.
          ``Because of the cumulative effects of many years of 
        discrimination and neglect, we are also proposing remedial 
        measures and special services intended to reverse the impact of 
        years of discrimination and neglect on many minority farmers. 
        Our other recommendations include actions that can be taken to 
        improve services to the many farmers who have suffered 
        disasters in recent years, and some ideas on how to assure that 
        new farmer programs will also serve socially disadvantaged 
        producers.''

    We have also attached for the use of this Committee an extensive 
appendix of the research and policy recommendations Rural Coalition 
with our members have developed and shared over several decades. 
Central to this work especially as related to Black farmers were our 
founding members including the Rural Advancement Fund of the National 
Sharecroppers Fund (founded 1937) and the Federation of Southern 
Cooperatives/Land Assistance Fund (founded 1967), and members who have 
formed and joined since, including Concerned Citizens of Tillery, 
Cottage House, Inc., North Carolina Association of Black Lawyers Land 
Loss Prevention Project, Operation Spring Plant and Oklahoma Black 
Historical, and our allies and partners including Intertribal 
Agriculture Council and Arkansas Land and Farm Development Corporation 
and the National Family Farm Coalition and Farm Aid.
    The attached Congressional Testimonies include the many policy 
recommendations we jointly made over the years to this Committee and to 
the U.S. Senate since the first hearings in 2002. On the issue of 
credit, we have also attached numerous policy briefs related to Farm 
Credit, many authored by our Policy Advisor, Quinton Robinson, who in 
2002 was the House Agriculture Committee staff member who organized the 
first hearing in the Subcommittee on Departmental Operations. Of 
particular relevance at present is the need for USDA Farm Services 
Agency to issue regulations to fully implement the Equitable Relief 
Provisions and the Heirs Property Relending Fund passed in the 2018 
Farm Bill
    Over these years, our team of collaborated have worked with the 
House and Senate Agriculture Committees to develop and promote passage 
of 40 sections passed in farm bills and related legislation since 1986. 
In those years, we worked with Rep. Edolphus Towns, whose staff member 
Brenda Pillars gave us access to a typewriter when the opportunity for 
a new amendment arose, including the amendment for matching grants for 
state mediation programs. The most extensive work began in the 1987 
Agriculture Credit Act when discrimination by race and ethnicity was 
first defined in the context of Federal Agriculture Policy.
    It continued in section 2501 of the 1990 Farm Bill, which 
authorized the first program to tangibly support the organizations who 
serve Black and other farmers who had suffered discrimination, called 
the Outreach and Assistance for Socially Disadvantaged Farmers and 
Ranchers (OASDVFR). That statute for the first time that recognized the 
importance of this network of community-based organizations, including 
many who testified in this hearing, by making them eligible for grants 
and contracts. We will underscore the importance of the direct one-on-
one technical assistance they have long been doing as a critical factor 
in stopping foreclosures and helping Black farmers hold onto their 
land.
    We call particular attention to the aforementioned USDA Partners 
Process. Beginning in 2005 and continuing into the Obama 
Administration, this process convened a series of dialogues, or 
conversations, on critical barriers faced by BIPOC farmers and the 
community-based groups who served them with interagency teams of USDA 
career staff. The process was led by Shirley Sherrod and other CBO 
leaders. We estimate that as many as 500 people contributed over those 
5 years. The comprehensive A Time to Change: A Report by the Assessment 
Conversations Team,\1\ Sept. 22, 2010 remains useful today both to 
measure progress and to identify additional changes. It was structured 
to identify problems, propose solutions including statutory changes 
needed, and also to describe what success would like. Many of the 
recommendations informed our proposals to you for the 2008 Farm Bill, 
and around 30 passed in the statute.
---------------------------------------------------------------------------
    \1\ https://drive.google.com/file/d/
10rJEsuSOef1_3jOhA3HCDEkCIHJ_cDPr/view.
---------------------------------------------------------------------------
    Since that time, many recommendations developed by the wide network 
of community-based organization who work directly every day with this 
nation's Black farmers and ranchers, and other Tribal, Latino, Asian 
Pacific, and other small-scale producers have been passed into law, 
with some implemented more fully than ever. We have also mobilized our 
communities to help lawmakers understand the degree of support for this 
proposals, including with sign on letters and collaboration with 
Members of Congress especially in Congressional Black and Hispanic 
Caucuses, annual Dear Colleague Letters. One of the early ones was led 
by Rep. Sanford Bishop who for years led efforts to continually press 
for more funding for the 2501 Program, from $1 million to its present 
funding level. We will continue to work also with Secretary Vilsack and 
his team to assure these funds more effectively reach and support the 
eligible entities as defined by statute. We will be forwarding 
additional recommendations to you on how the full suite of Outreach, 
Beginning Farmer and Local Food programs can best complement each 
other.
    The drafting and action by this Committee in this year of 2021 
represents a historic and significant step forward in a new effort to 
begin to right some of the longstanding wrongs faced by Black farmers. 
We have attached for your record a copy of our March 3 sign on letter 
that we prepared to help support passage of the historic provisions he 
included in the American Rescue Plan and a brief authored by our Policy 
Advisor on the relevant authorities supporting these provisions. We are 
deeply grateful to Chairman David Scott and the Members of this 
Committee, several of whom we have worked with for decades, for this 
action.
Relevant Data and Research
    We are already working with USDA on the implementation of Sections 
1005 and 1006 of the American Rescue Plan. As the Committee's work of 
oversight continues and the preparation for the 2023 Farm Bill 
commences, we share additional proposals we are refining with our 
members and allies to support Black farmers in securing land tenure for 
their families and generations into the future and restoring the 
agriculture as an economic base of their communities.
    Particularly as the debate over climate mitigation begins, we will 
be highlighting the importance issue of land tenure. New investments of 
Federal dollars over time have often favored larger scale farmers at 
the expense of others. But as the recent pandemic has shown us, crises 
such as these cause fundamental disruptions in existing food chains. 
Resiliency now and in the future point toward the value of reorienting 
the processing and distribution of food to shorter and more direct 
local and regional farm to food networks that are closer and more 
readily adaptable to serve the food needs of some of this nation's most 
vulnerable communities.
    We will specifically address the issue of heirs property later in 
this piece. First, we thought it helpful to share a sampling of charts 
we have developed in connection with a research project under an 
Agriculture and Food Research Initiative project with the National 
Institute of Food and Agriculture. This AFRI standard research project, 
``Community Resilience Through Land Tenure Rights,'' will examine the 
impacts of land tenure arrangements, non-ownership and related 
encumbrances on the management of small to medium-sized farm operations 
in a diverse cross section of socially disadvantaged agricultural 
communities. Rural Coalition and its co-principal investigators include 
both CBO's and researchers from Tuskegee University and Kansas State 
University. North Carolina Association of Black Lawyers Land Loss 
Prevention Project are co-Principal Investigators, with almost a dozen 
other CBO partners.
    We will also use similar profiles for in related research under a 
Sustainable Agriculture and Research grant, Securing Land Tenure Rights 
for Heirs Property Owners. The North Carolina Association of Black 
Lawyers Land Loss Prevention Project is Principal Investigator. The 
Rural Coalition and Tuskegee University and Virginia State University 
are Co-Principal Investigators along with multiple CBOs and Farmers in 
the Southern Region. The second grant focuses also on the quality and 
availability of legal services.
    These charts provide a snapshot of the trends in loss of land over 
time as far back as 1959 for Orangeburg county. There also charts for 
Barber Co[.], AL and Halifax county, NC. While there are specific 
issues with data at various points in time, we have found that the 
trends reflected are consistent with data we and others including the 
1890 Universities have collected.
    What the charts clearly provide is a sense of the cumulative impact 
of the past and in some places ongoing failure to address and halt 
discrimination. The result is the unjust and unnecessary loss of land 
by African American producers whose place on the land predates the 
arrival of many others in farming today.
State of Black Farmers in the U.S.--Historic Land Tenure by County
Change in Farm Numbers, Orangeburg County, South Carolina (1950-2017)


Black/African American Land Tenure in Barbour County, Alabama, 1964-
        2017
        
        
Net Cash Farm Income by Race in Barbour County, Alabama, 2007-2017


Black/African American Land in farms (acres) in Dale County, Alabama, 
        1969-2017
        
        
Decrease in Black/African American Farms and Land in Halifax County, 
        North Carolina, 1978-2017
        
        
Chart Average Government Payments by Race Ethnicity in Halifax County, 
        North Carolina, 2007-2017
        
        
    In almost every county we have already researched over several 
decades, land ownership has become more concentrated. Many farmers and 
ranchers have been unable to retain their land. The evidence of 
disparate treatment is particularly notable with respect to Black 
farmers and ranchers.
    In collaboration with our farmer and rancher leaders, we organized 
several participatory research projects designed to better understand 
their views of USDA. The first was around issues related to 
participation in Crop Insurance programs. The second followed a series 
of farmer-led training we developed with our members. Our reports are 
included in the appendix, but the following charts provide a snapshot 
of how the needs of farmers overlap or diverge with the structure and 
operation of USDA programs and services.

  Table 1: Socio-Demographic Characteristics of Participants from Rural
            Coalition Financial Training Project (2004/2005)
------------------------------------------------------------------------
                     Characteristic                           Percent
------------------------------------------------------------------------
Gender
  Male                                                              67.5
  Female                                                            32.5
                                                                 (1,048)
Race/Ethnicity
  American Indian                                                   24.8
  Asian American                                                     3.5
  Black/African American                                            54.9
  White                                                              5.0
  Hispanic/Latino                                                   10.7
  Other                                                              1.1
                                                                 (1,052)
Highest Level of Education
  Less than High School Degree                                      29.6
  High School Degree                                                34.8
  Some College, No Bachelor's Degree                                29.6
  Bachelor's Degree or Higher                                        6.0
                                                                 (1,050)
Total Farm Income (after expenses) in 2003
  Less than $4,999                                                  54.0
  $5,000-$9,999                                                     23.5
  $10,000-$19,999                                                   13.9
  $20,000-$29,999                                                    4.3
  $30,000 or More                                                    4.3
                                                                   (814)
------------------------------------------------------------------------


   Table 2: Farm Characteristics of Participants from Rural Coalition
                 Financial Training Project (2004/2005)
------------------------------------------------------------------------
                     Characteristic                           Percent
------------------------------------------------------------------------
Own Land                                                            84.5
                                                             (911/1,078)
Rent Land from Others                                               38.8
                                                             (409/1,053)
Own and Rent Land                                                   28.1
                                                             (295/1,048)
Acres in agricultural production in 2003 *
  Mean                                                              85.2
  Median                                                            15.0
  Minimum-Maximum                                                0-2,400
                                                                   (937)
Acres in agricultural production in 2004 *
  Mean                                                              87.4
  Median                                                            15.0
  Minimum-Maximum                                                0-2,600
                                                                   (935)
Produced Commodity Crops in 2003 or 2004                            54.5
                                                             (561/1,030)
Produced Fruits/Vegetables in 2003 or 2004                          54.6
                                                             (553/1,013)
Raised Livestock in 2003 or 2004                                    47.1
                                                             (480/1,020)
Produced Commodity Crops, Fruits/Vegetables and                     14.3
 Livestock in 2003 or 2004                                     (137/960)
------------------------------------------------------------------------
* Ranchers often did not include grazing acreage in their estimates of
  land in agricultural production.
Therefore, the numbers presented here are conservative estimates.


Table 3: Risk Management Strategies of Participants from Rural Coalition
                 Financial Training Project (2004/2005)
------------------------------------------------------------------------
                Risk Management Strategy                      Percent
------------------------------------------------------------------------
Have Risk Management Plan                                            4.7
                                                                (45/961)
Use a Tax Accountant                                                42.7
                                                             (439/1,029)
Make Use of IRS Form Schedule F                                     18.6
                                                               (165/886)
Ever Purchased Crop Insurance
  Yes, Currently Have Policy                                         9.6
  Yes, But No Current Policy                                         5.8
  No, Never                                                         84.6
                                                                   (971)
------------------------------------------------------------------------


    Table 4: Labor Use of Participants from Rural Coalition Financial
                      Training Project (2004/2005)
------------------------------------------------------------------------
                Risk Management Strategy                      Percent
------------------------------------------------------------------------
Spouse, Children or Other Family Members Receive Wages              17.7
 from Farm                                                     (154/869)
Number of Full-Time Employees
  None                                                              85.4
  1-10                                                              14.0
  11-20                                                              0.3
  21 or More                                                         0.3
                                                                   (988)
Number of Regular Part-Time Employees
  None                                                              80.6
  1-10                                                              17.9
  11-20                                                              0.9
  21 or More                                                         0.6
                                                                   (987)
Employed any Seasonal or Migrant Employees in the Past              16.4
 Year                                                          (127/773)
  Any Seasonal or Migrant Employees Participate in H-2A             50.4
   Program                                                      (64/127)
Understand Tax Rules for Farm Labor                                 14.5
                                                               (126/870)
------------------------------------------------------------------------


  Table 5: Awareness of and Participation in Government Programs Among
Participants from Rural Coalition Financial Training Project (2004/2005)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Agency/Program                                             Percent Aware
------------------------------------------------------------------------
Farm Services Agency Credit Programs                                52.5
                                                             (533/1,015)
Farm Services Agency Disaster Payments                              54.4
                                                               (522/959)
Natural Resources Conservation Service                              48.7
                                                               (465/955)
Cooperative Extension Service                                       58.1
                                                               (567/976)
Rural Development                                                   42.0
                                                               (400/953)
Risk Management Agency                                              35.7
                                                               (335/939)
------------------------------------------------------------------------
Program                                                       Program
                                                           Participation
------------------------------------------------------------------------
Ever Applied for a Loan from USDA                                   27.9
                                                               (234/839)
  Ever Been Denied a Loan from USDA                                 91.3
                                                               (210/230)
  Ever Received a Loan from USDA                                    32.0
                                                                (72/225)
Ever Received USDA Disaster Assistance                              36.2
                                                               (354/977)
Participate in any Annual Commodity Program                         13.5
                                                               (113/839)
Participate in any Conservation Program                              8.1
                                                               (84/1040)
------------------------------------------------------------------------

    The farmer/mentors requested that we ask not only questions about 
the number of farmers who prepared schedule F of their tax return. Only 
18.6% said yes. They also wanted to know how many used tax preparers. 
40% responded they did. Many of the groups who participated in this 
research continue to this day provide direct technical assistance to 
producers on the importance of good financial records, and the need 
also to provide required reports to document production and report 
losses.
    These findings also underscore the importance of sustaining 
community-based organizations who are trusted by farmers for assistance 
in understanding and navigating USDA programs.
    Also instructive is one chart from an earlier study which included 
a slightly different population of producers. We will have more to 
share as this Committee begins work on the next farm bill and on 
climate issues. We looked at the level of participants in all types of 
insurance and these are our findings from the year 2002.

Table 4. Insurance Use from Small, Limited Resource and Minority Farmers
                                Survey 
------------------------------------------------------------------------
                Variable                     Frequency        Percent
------------------------------------------------------------------------
Currently use any form of insurance
 Editor's note: there is no
 corresponding table note for the entry
 with the asterisk. The table has been
 published herein as received from Rural
 Coalition/Coalicion Rural.
  Respondents answering yes                          116             137
                                                    84.7           100.0
Types of insurance used
  Health insurance *                                  97            83.6
                                                     116           100.0
  Dental insurance                                    43            37.1
                                                     116           100.0
  Accident insurance                                  39            33.6
                                                     116           100.0
  Life insurance                                      74            63.8
                                                     116           100.0
  Disability insurance                                29            25.0
                                                     116           100.0
  Auto insurance                                     100            86.2
                                                     116           100.0
  General homeowner or renter insurance               84            72.4
                                                     116           100.0
  Disaster insurance                                  25            21.6
                                                     116           100.0
  General liability insurance for farm                43            37.1
   operation                                         116           100.0
  Crop insurance                                      29            25.0
                                                     116           100.0
------------------------------------------------------------------------

    We underscore the importance of the Farm Opportunities Outreach and 
Training Programs, including the Outreach and Assistance Program for 
Socially Disadvantaged Farmers and Ranchers. Our community-based 
organization members routinely accompany farmers the farmers we serve 
to USDA offices to make sure they are prepared to request services they 
need and to navigate USDA systems.
    Our research findings highlight the need for improved connections 
and restoration of trust with USDA. Our organizations led efforts to 
establish systems that would allow USDA to monitor how these systems 
are working. One particular recommendation as far back as the 2002 Farm 
Bill is to require the farmer be provided a Receipt for Service on each 
visit to the agency. This was adopted in 2008 as a require to provide a 
Receipt upon request. Rep. (and now HUD Secretary) Marcia Fudge offered 
an amendment during the 2014 Farm Bill Mark-up which is now a statutory 
requirement whose validity is affirmed including in an Administrative 
Law Judge opinion on a farm appeal. We remind the Committee that the 
required receipt for service is not uniformly provided in all offices 
and farmers are still facing push back for asking or outright refusal 
of their request.
    Just last evening, our Rural Coalition Board Member Barbara Shipman 
of Cottage House, Inc. in Ariton, Alabama shared this story. ``I had 
one of my farmers to go into a particular NRCS office and FSA office to 
request assistance. The young lady threw and not only hit him in the 
face with his folder, but she also told him `get out of the office and 
don't come back until you have 3 years' worth of farm records.' Let me 
tell you please--returning military members have PTSD it didn't take 
the snap of a finger to get them in the military zone again so that's 
why I go with them. I ended up having to talk to State Director. He 
said he was going to get involved. He called back to say he did so and 
said I should have no problem with anybody else like that.''
    Mrs. Shipman, herself an Army veteran of the Gulf War, routinely 
welcomes recently returned service members from Fort Rucker to consider 
farming. This particularly newly returned Veteran had grown up on a 
farm and had a plan for producing pecans and goats.
    She also recounted that she recently accompanied two farmers to 
visit four separate county offices to determine who was supposed to 
serve them. One was not open for a prescheduled appointment; another 
was closed. In the last office, the staff member agreed to get on the 
computer to ascertain the correct service center. She said it was 
closing time, but she could provide service there at another time. 
Barbara told her, ``that's fine as long as he leaves here with two 
things--a letter of receipt for service that provides his farm and 
tract number and a copy of the technology map of where his land is 
located. Then in future all you have to do give the address and you can 
pull it down on the computer and print it all. When we walked out of 
the office, I told him that when you get ready to go back to the office 
you let me know. We will go together because that's what I do. I will 
walk him through how to get those things he wants, and I know he's in 
that computer system. He can't march over to the NRCS, no way, if he's 
not in the computer system in FSA, step number one.'' She works with 
40-60 farmers every year to assure service is done right. Without her, 
``they'll just turn him away and they won't even tell them about the 
receipt for service and they will not tell him he's due a copy of that 
topology map of his land or get him a farm and tract number--because 
that farmer number goes on that letter receipt for something so when he 
goes in the next time he has to do his put his farm in tracking down in 
the system and it brings up his file right and then he should have 
access.''
    Technical Service Providers and Community Based Organizations--Mrs. 
Shipman has many other examples to share. Community based organizations 
need to have a sustained funding, perhaps in new ways, to assure the 
many CBO staff members who provide such services can be compensated, 
retained and prepare to train others to perform these services. They 
could form the foundation of a network of CBO based technical service 
provides with authority to work on technical assistance for both FSA 
and NRCS programs.
    She and many of our other members, including Mr. Willard Tillman of 
the Oklahoma Black Historical Research Project, have the stressed the 
need for ongoing support in order to do the work necessary to help 
farmers and ranchers connect with USDA. They are also able to build 
relationships with service centers and assure farmers are able to do 
what they need to do. These CBO technical service provides are also 
provide the invaluable service of calling inadequate service to the 
attention of USDA leaders at the state and national level, so immediate 
intervention can be made, with appropriate accountability. It is 
critical to set in place new policy to provide this kind of trusted 
technical support to help farmers, ranchers, forest land owners and 
their families secure land and rebuild local economies.
    Technical Support Providers are now used extensively in 
conservation programs. Authority should be provided to allow these 
providers who work with CBO's to cover FSA programs also. This would 
help CBO's to build a sustainable network of next generation leaders 
trained by our skilled leaders who have supplied technical assistance 
to our farmer members for over 4 decades. We believe that such 
investments would improve family wealth, stabilize land values and 
secure a tax base with improvements to the education, public works and 
the economic situation of the whole community.
Critical and Continuing Issues--County Committees
    Our early collaborative work began in 1997, when we convened a 
group to address the issue of Farm Service Agency County Committees. 
After a week of training and dialogue at USDA headquarters coordinated 
in cooperation with NRCS Chief Pearlie Reed and FSA Credit Director Lou 
Ann Kling, we examined voting patterns, and eligibility and access 
issues. Our members looked at county data of eligible voters and how 
many voted in county committee elections, and ballot counting 
procedures. We encouraged turnout with some results in subsequent 
years.
    We have also examined over the past few decades the data systems of 
USDA and how transparency and accountability could be advanced with 
modification of these systems. In 2002, we prepared testimony for the 
Senate Committee on Agriculture where we were invited to testify by 
Senator Richard Lugar. This statement, which we have not located, was 
very similar to the one shared of the House hearing at the same time.
    Senator Lugar, with Senator Blanche Lambert Lincoln and others, 
included language we recommended to assure transparency and 
accountability in USDA practices, including the collection and 
publication of data on the participate rates of producers in USDA 
programs by race, gender and ethnicity. These provisions were added and 
were updated in subsequent farm bills. More work is necessary to assure 
these are available to farmers and groups working with them at the 
county level. They are also essential to help the Secretary and his 
team to in a proactive way identify offices that are doing a good job, 
and offices where improvements or other action are needed.
    For many years we urged USDA and the Congress to move from a 
complaint generated system of solving exclusions proactively instead of 
only after farmers had have to enter the long and risky process of 
appeals, civil rights complaints and litigation. We urge the Secretary 
to also engage the office of the Assistant Secretary for Civil Rights 
to have the ability to transform systems of analysis necessary to 
offset problems before the pose a barrier to more farmers.
    We share the following story from our Rural Coalition newsletter of 
December 2000 which recounts the proceedings of the first Senate 
Agriculture Committee Hearing on Civil Rights in September that year.


    County Committees--Below is a snapshot--the last we have--of data 
on the number of votes cast in the county election of 2009. This 
election was in only one Local Administrative area.
    Data on the over composition of county committees is also included 
in some attached statements.

 
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Ballots Cast By Race, Ethnicity, and Gender in 2009 \1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
            Gender                        Ethnicity              American      Asian       Black or      Native      Unknown       White        Total
                                                                Indian or                  African    Hawaiian or                              Ballots
                                                                 Alaskan                   American      Other                                 Cast by
                                                                  Native                                Pacific                               Gender and
                                                                                                        Islander                              Ethnicity
--------------------------------------------------------------------------------------------------------------------------------------------------------
Female                          Hispanic or Latino                      73            2           34            9          145          960        1,223
                                Not Hispanic or Latino                 172          108          408          226                     3,316        4,230
                                Unknown                                123           78          319          147        1,095        1,782        3,544
                                                              ------------------------------------------------------------------------------------------
  Female Total                                                         368          188          761          382        1,240        6,058        8,997
                                                              ------------------------------------------------------------------------------------------
Male                            Hispanic or Latino                     100           52           27           10          366        1,332        1,887
                                Not Hispanic or Latino                 392          106          823          125                    44,837       46,283
                                Unknown                                397          175          992          113          774       40,435       42,868
                                                              ------------------------------------------------------------------------------------------
  Male Total                                                           871          333        1,842          248        1,140       86,604       91,038
                                                              ------------------------------------------------------------------------------------------
Organization                    Hispanic or Latino                      14            3            9            1          314          494          835
                                Not Hispanic or Latino                 142           95          448           28          277       78,620       79,610
                                Unknown                                116           45          607           41        1,217       66,204       68,230
                                                              ------------------------------------------------------------------------------------------
    Organization Total                                                 272          143        1,064           70        1,808      145,318      148,675
                                                              ------------------------------------------------------------------------------------------
Unknown                         Hispanic or Latino                       0            0            3                         8           92          103
                                Not Hispanic or Latino                   3           20           43           11          416        1,325        1,818
                                Unknown                                  6            6            6            7        1,772          454        2,251
                                                              ------------------------------------------------------------------------------------------
    Unknown Total                                                        9           26           52           18        2,196        1,871        4,172
                                                              ==========================================================================================
      Total Ballots Cast by                                          1,520          690        3,719          718        6,384      239,851      252,882
       Race \2\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Ballot Summary
--------------------------------------------------------------------------------------------------------------------------------------------------------
LAA Total Eligible Ballots                                                                                                                     2,021,637
 
LAA Total Ballots Cast                                                                                                                           252,494
 
Percentage of Eligible Voters that Cast Ballots                                                                                                      12%
 
National Total of Ballots Disqualified                                                                                                            13,156
 
Percentage of Ballots Disqualified vs. Ballots Received                                                                                               5%
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Represents only those LAAs in which an election was held in 2009.
\2\ Due to producers' ability to select more than one race, the Total Ballots Cast in 2009 may be greater than LAA Total Ballots Cast in Ballot Summary
  Table.

    When requirements were added in the 2002 and 2008 Farm Bills to 
authorize the assignment of minority advisors to county committees and 
to update election provisions, the Congress also changed the law to tie 
eligibility to participate on county committees to those who 
participated in farm programs. This should be extended to include 
farmers who are eligible to participate and registered with USDA, even 
if they choose not to participate.
    However, issues with county committees also continue. In the past 2 
weeks, we were contacted by an Oklahoma farmer who is employed in 
another state. He has informed the County Committee a few years ago 
that the farm had been transferred to his name. He was seeking help 
because he currently has a neighbor who has been planting wheat on land 
that belongs to him and filing claims for payments. He has provided 
documentation to show that the FSA county office reached wrote to the 
farmer demanding he send the certified lease so the neighboring farmer 
could collect his payment. The farmer owner wrote a cease and desist 
letter to his neighbor and asked the office to address the issue of the 
illegal claims. He also noted that the lease given to the office by the 
neighbor was fraudulent. While he was seeking response from the county, 
he reported that the staff asked him not to report this as it would 
``get a former employee in trouble.'' A county committee member also 
asked him if he wants to sell his land.
    We believe these issues merit a full review of the role and 
practices of the use of county committees and their continuing failure 
to include and serve the needs of all farmers but especially Black 
Farmers. In the next farm bill, we believe it is time that this 
Committee review ways to replace county committees with a more 
professional and accountable system.
FSA Farm Credit--Immediate Actions Needed
    We have worked extensively on the issues of Farm Credit over many 
years and hope we can provide additional recommendations as the 
Committee addresses those particular issues.
    At present, the two most essential credit related issues are to 
assure that Farm Service Agency issue regulations and implement the 
following:

  (1)  Ensure Equitable Relief Provisions to protect the farmer in the 
            case of errors or intentional actions in loan agreements by 
            Farm Service Agency staff members, and

  (2)  Implement the Heirs Property Relending Program.

    With respect to the Relending program, Congress since the 2018 Farm 
Bill has appropriated $20 million for FSA to relend to entities 
qualified to lend as community development financial institution, and 
who have significant demonstrated experience serving the needs of 
socially disadvantaged farmers and ranchers.
    There are such institutions available to begin working with 
families to resolve heirs property encumbrances which keep them out of 
full participation in USDA programs. These funds are urgently needed. 
The pandemic has caused the loss of over \1/2\ million members of our 
society. Some of them are farmers. Their families urgently need 
assistance in handling the difficult issues of settling estates. Making 
these program available will enable the groups who know how to do this 
work to immediately assist Black and other people of color landowners 
to secure land tenure in a way the addresses the rights of all interest 
holders, and to emerge with a succession plan to guide that family in 
the future.
Direct and Guaranteed Loans and Borrowers Rights
    Section 1005 of the American Rescue Plan provides funds to Black 
farmers and other people of color borrowers to pay off loans from both 
FSA and Farm Credit Administration. We will have attached a brief we 
provided to the General Accounting Office in advance of the study they 
did on the availability of credit to Socially Disadvantaged Farmers and 
Ranchers. The report suggests several issues for the attention of the 
Administration and the Congress. We will prepare future input on these 
provisions.
    It is also important to understand the issues farmers are 
encountering due to lack of data collection and clear procedures to 
assure that all borrowers rights, including the Equal Credit 
Opportunity are assured. We have recommended to the Secretary that 
clear procedures for Farm Credit Borrowers to identify themselves as 
socially disadvantaged and eligible for the Emergency Relief provided 
must be set in place.
    We further refer you to correspondence between Rural Coalition and 
both the FSA and the Farm Credit Administration referring to the case 
of a young farmer. We have redacted the farmer's name. These letters 
show how FCA says go to the lender, the lender says to go to FCA, and 
FSA asserts they have no authority on guaranteed loans. These 
illustrate the point that there is no clarity for the borrower and no 
real explanation if anyone has authority to act if farmers feel they 
were discriminated against on a guaranteed loan.
    We urge Congress to address these gaps. We further endorse the 
recommendations provided in the hearing by the Federation of Southern 
Cooperatives that a separate entity within or similar to other farm 
credit institutions be established to attend to the unmet needs of this 
sector of farmers and ranchers.
Heirs Property, Insecure Land Tenure, Climate and Rural Communities
    The Federation of Southern Cooperatives/Land Assistance Fund has 
been identifying the importance of addressing heirs property issues for 
decades, beginning with a 1980 Report by the Emergency Land Fund.
    In 2017, the Oklahoma Black Historical Research Project convened 
the 100 Farmers Summit In Oklahoma City in March 2017 for in input in 
advance of the 2018 Summit.\1\ The 100 Summit Report: Addressing the 
Needs and Concerns of the Underserved Minority Family Farming Community 
is included in the attachments. The following issues raised by the 100 
Black farmers on heirs property include:
---------------------------------------------------------------------------
    \1\ Oklahoma Black Historical Research Project, with Rural 
Coalition, et al.,\1\ The 100 Summit Report: Addressing the Needs and 
Concerns of the Underserved Minority Family Farming Community, 2017.

  (A)  Specific Issues Related to Heir Property--The following were the 
            key issues that needed to be addressed to restore access to 
            programs for producers lacking clear title or lease on the 
---------------------------------------------------------------------------
            land they farm or seek to farm:

        Heir Property: If you have land but there is no will or 
            document saying who will be the administrator of it, your 
            ability to administer and use it is very difficult. If 
            there is not an administrator for the land, you will not be 
            able to get a loan through the USDA. For example, when you 
            want to take out a loan, but you are the beneficiary of 
            land along with your siblings--you have to get all other 
            siblings to sign on to your loan. You will end up in a case 
            with the bank and your siblings to settle your claim 
            interest in the land. Speculators will seek out one or two 
            siblings to see if they can buy them out, then they can 
            petition the courts for the full property to be sold. 
            Called a ``speculating interest'' in the land to cause land 
            loss. You get a minimal amount of the value of that land.
        Arkansas' law has changed--the Uniform Partition of Heirs 
            Property Act allows an heir who is a co-owner to buy out 
            another who wants to sell their share of a property at the 
            market value of the property.\2\
---------------------------------------------------------------------------
    \2\ In addition to Arkansas; Alabama, Connecticut, Georgia, 
Montana, Nevada, New Mexico and Texas numerous states have now adopted 
or have introduced versions of the Uniform Partition of Heirs Property 
Act (http://www.uniformlaws.org/shared/docs/partition%20of%20heirs%20
property/uphpa_final_10.pdf). Passage of the Fair Access to Farmers and 
Ranchers provisions in the 2018 Farm have helped build support to enact 
the law drafted by the nonprofit Uniform Law Commission (http://
www.uniformlawcommission.com/) to make it easier to divide property and 
preserve family wealth as the owners multiply over generations.
---------------------------------------------------------------------------
        Adverse Possession is also used by white farmers, investors and 
            property owners to take land. They pay property taxes and 
            take ownership, even where there are not heir property 
            issues. For example, an African American woman rented her 
            land to a white farmer and as part of the rent he paid her 
            taxes for 5 years. One year he did not pay rent and told he 
            did not owe it because now he owned the land Strategies: 
            Get more protections in place for African-American 
            families. A lot of risk factors that can result in land 
            loss--need to address them comprehensively.
        Key point: There is a systemic lack of access to information 
            and resources to resolve heir property issues--We see a 
            great deal of land that is idle, land that could be 
            productive but isn't. The legal risk varies from state to 
            state. In some states, someone can seize rights to a 
            property simply by paying delinquent taxes. The time in 
            which one is considered to have relinquished their rights 
            to their land varies by state. There was a provision in the 
            2014 Farm Bill to help get Black farmers' land back; but it 
            didn't go anywhere. We need new support for education on 
            wills and estate planning.
Heirs Property and the Ecological Costs of Discrimination
    Oklahoma Black Historical Research Project worked over the past 
decade to engage Black farmers in NRCS programs. With Rural Coalition 
and the Scholars of the America University Farm Bill practicum, the 
researched the data and experiences of Black farmers in access USDA 
programs. Their findings are summarized and published in the research 
paper on the Ecological Costs of Discrimination.* \3\
---------------------------------------------------------------------------
    * (https://www.researchgate.net/publication/
336701771_Ecological_costs_of_discrimination
_racism_red_cedar_and_resilience_in_farm_bill_conservation_policy_in_Okl
ahoma)
    \3\ Fagundes, Tillman, et al., Ecological costs of discrimination: 
racism, red cedar and resilience in farm bill conservation policy in 
Oklahoma, October 2019, Renewable Agriculture and Food Systems (https:/
/www.researchgate.net/journal/Renewable-Agriculture-and-Food-Systems-
1742-1713) 35(4): 1-15, DOI: 10.1017/S1742170519000322 (https://
www.researchgate.net/deref/
http%3A%2F%2Fdx.doi.org%2F10.1017%2FS1742170519000322).
---------------------------------------------------------------------------
    Invasive species thrive in places facing climatic changes and put 
farmers at further risk. In Oklahoma, eastern redcedar is spreading at 
the rate of 800 acres a day. Without help for mitigation from USDA 
especially for historically underserved farmers who farm on heirs 
property, small cow and calf operations have seen their grazing land 
taken over by redcedar, which competes with pastureland by consuming up 
to 55,000 gallons of water per acre per year and puts the viability of 
their operations at further risk. Other risks they have faced over the 
past decade include severe cycles of floods, droughts, fires, freezes 
and tornados. Farmers who were deemed ineligible for NRCS program, the 
OBHRPI learned, were denied because they lacked the documentation to 
secure farm and tract numbers to demonstrate their control of the land 
on which they sought benefits.
    The Fair Access for Farmers and Ranchers Act, drafted by Rep. 
Fudge, and introduced in the Senate by Senators Doug Jones and Senator 
Tim Scott, authorized the aforementioned the heirs property relending 
fund. It also authorized the use of alternate methods of documentation 
to allow access for farmers to NRCS and other programs to allow them to 
care for land. For the first time in Federal law, it made some of the 
methods consistent with the processes outlined in the Uniform Partition 
of Heirs Property state passed law. The third provision, Section 12607 
of the 2018 Farm Bill authorized Farmland Ownership Data Collection 
that sought to identify the land tenure trends that may affect 
generational transitions, and barriers to entry for beginning and 
socially disadvantaged farmers and ranchers.
    The data and studies compiled under Section 12607 are critical 
inform and guide all levels of agricultural policy making that concern 
the critical dynamics of heirs' property and absentee land ownership in 
farming communities. Appropriations of $3 million annually were 
authorized. We urge this Committee to assure this important initiative 
is full funded. This baseline study is essential to allow the Congress 
to anticipate the impact of various kinds of climate interventions on 
farm and forest land tenure especially for Black Farmers.
Heirs Property and Forest Land
    Securing and building land tenure is also critical to protecting 
the intergenerational transfer of land and wealth and building a 
community with a healthy ecosystem and a tax base to sufficient to 
support quality education, employment opportunities, and a strong 
infrastructure. The following abstract of the paper ``Taking 
Goldschmidt to the Woods: Timberland Ownership and Quality of Life in 
Alabama'' \4\ summarizes the impact of the degree of highly 
concentrated land ownership on children, families and the communities:
---------------------------------------------------------------------------
    \4\ September 2020 Rural Sociology (https://www.researchgate.net/
journal/Rural-Sociology-0036-0112) 86(1) DOI: 10.1111/ruso.12344 
(https://www.researchgate.net/deref/
http%3A%2F%2Fdx.doi.org%2F10.1111%2Fruso.12344) Authors: Conner Bailey 
(https://www.researchgate.net/scientific-contributions/Conner-Bailey-
36320674), Abhimanyu Gopaul (https://www.researchgate.net/scientific-
contributions/Abhimanyu-Gopaul-2179969094), Ryan Thomson (https://
www.researchgate.net/profile/Ryan-Thomson), Auburn University (https://
www.researchgate.net/institution/Auburn-University); Andrew Gunnoe 
(https://www.researchgate.net/profile/Andrew-Gunnoe), Maryville College 
(https://www.researchgate.net/institution/Maryville_College).

          Abstract: We use a database of property tax records for 13.6 
        million acres representing every parcel of privately owned 
        timberland in 48 rural Alabama counties to test two hypotheses 
        inspired by Walter Goldschmidt relating land ownership and 
        quality of life. Our data show private ownership is highly 
        concentrated and 62 percent is absentee owned. We employed 
        Pearson correlations alongside Poisson and negative binomial 
        regression models to estimate influence of both concentrated 
        private ownership and absentee ownership of timberland. Our 
        findings support Goldschmidt-inspired hypotheses that 
        concentrated and absentee ownership of timberland exhibit a 
        significant adverse relationship with quality of life as 
        measured by educational attainment, poverty, unemployment, food 
        insecurity, eligibility for free or reduced-price lunch at 
        public schools, Supplemental Nutritional Assistance Program 
        participation, and population density. Low property taxes in 
        Alabama limit the ability of local governments to generate 
        revenue to support public education or meet other 
        infrastructural or service needs in rural areas. We call on 
        rural sociologists and kindred spirits to pay more attention to 
        the fundamental importance of land ownership which shapes the 
        foundations of power and inequality affecting rural life in 
        America and beyond.\5\
---------------------------------------------------------------------------
    \5\ ttps://www.researchgate.net/publication/
344021201_Taking_Goldschmidt_to_the_Woods
_Timberland_Ownership_and_Quality_of_Life_in_Alabama.

    We look forward to other opportunities sharing our proposals to 
more fully full address the set of issues we have raised, including 
with respect to climate. We further point to a critical need to assure 
farmers have access to the qualified and trusted legal and technical 
assistance necessary to protect their land.
    In October 2019, the North Carolina Association of Black Lawyers 
Land Loss Prevention Project authored a Continuing Legal Education 
(CLE) manuscript ``Assisting Heir Property Owners Facing Natural 
Disasters: History and Overview of Heir Property Issues.'' We 
participated in person as a panelist in the collaborative CLE webinar 
to train NC Legal Aid volunteer attorneys on service to impacted heir 
property owners. The webinar took place on October 23. According to 
Legal Aid's coordinator, there were approximately 124 webinar 
participants on that date and the course will continue to be available 
for training purposes.
    Through individual direct legal intervention, technical assistance, 
outreach and policy innovation and implementation, the overall outlook 
for North Carolina's disaster-affected families has been substantially 
improved. The benefits include increased property retention, removal of 
barriers to assistance programs, enhanced food access, heightened farm 
business risk management, and family engagement in multi-generational 
planning as a safeguard against inherent co-ownership vulnerabilities.
    We project that the pandemic will continue to emphasize the need 
for education on what defines sustainability and how environmental, 
economic, health stressors are intertwined and cumulative. This 
highlights the importance of collaborative work we have all done to 
expand the framework of justice and increase the tools and resources 
available to communities to take direct action to promote community 
health. We see our engagement with Black and Brown-led coalitions and 
initiatives advancing sustainable environments and community-controlled 
food only deepening and expanding.
    We will provide a letter to Chairman Scott and the Committee in 
upcoming weeks that better summarizes our immediate recommendations for 
action.
Conclusion
    Today, Black farmers find themselves still seeking financial 
compensation from years of discrimination by the United States 
Department of Agriculture (USDA). This financial compensation, along 
with the American Rescue Plan, has been called ``unfair reparations,'' 
``another handout,'' or some other dehumanizing term by prominent and 
influential elected officials and others. This continued systemic and 
institutionalized racism is further evidence of the unrelenting 
discrimination that Black farmers and their communities experience on a 
daily basis. Furthermore, many Black farmers, their families and 
communities continue to be on the brink of bankruptcy, foreclosure, and 
homelessness. The USDA must act now to implement the American Rescue 
Plan and related initiatives to empower Black farmers and their 
communities. The American Rescue Plan and related initiatives can only 
be successful if the USDA pays off Black farmers' USDA farm loan debts, 
creates an inclusive and equitable implementation process for the $1B 
authorized by Section 1006, and prioritizes policies that help Black 
farmers and their communities to hold onto their land and protect it 
from further discriminatory practices.
Introduction to the Appendix
    We have affixed this appendix to provide this Committee with a 
record of some of the research, documentation, analysis and solutions 
the Black, Indigenous and other People of Color farmers and ranchers we 
serve have recommended over the years. These reflected repeated calls 
to our elected leaders to hold our U.S. Department of Agriculture 
accountable for these continuing abuses.
    And we have provided this Committee with many policy 
recommendations, some of which have been adopted, some adopted but not 
yet implemented, and others ready to be adapted for the current day. We 
are not the only such groups have done so. We feel it is important for 
this Committee to have a record of the work of this important work at a 
time when the will to make these changes is greater than we have seen 
before.
Summary of Appendices
1. Congressional Letters and Testimony
    Rural Coalition, et al., Letter to the Leadership of the U.S. House 
of Representatives and the U.S. Senate to Support Emergency Relief for 
Farmers and Ranchers of Color, March 3, 2021.
    Quinton R. Robinson, Esq., Policy Brief on the Need for Emergency 
Relief for Farmers of Color, Rural Coalition, March 4, 2021.
    Statement of John Zippert on behalf of the Federation of Southern 
Cooperatives and Rural Coalition, to the Subcommittee on Departmental 
Operations, Committee on Agriculture, U.S. House of Representatives, 
Washington, D.C., September 25, 2002.
    Statement of John Zippert on behalf of the Federation of Southern 
Cooperatives and Rural Coalition to the Subcommittee on Conservation, 
Energy, Research and Credit, Committee on Agriculture, U.S. House of 
Representatives, Washington, D.C., March 27, 2007.
2. Research Findings and Policy Recommendations
    A Time to Change: A Report by the Assessment Conversations Team 
(https://drive.google.com/file/d/10rJEsuSOef1_3jOhA3HCDEkCIHJ_cDPr/
view), Sept. 22, 2010 (link only to a comprehensive 150-page report of 
a multi-year assessment of USDA Prog[r]ams andservices with CBO leaders 
and USDA Agency Staff).*
---------------------------------------------------------------------------
    * Editor's note: the report entitled, A Time to Change: A Report by 
the Assessment Conversations Team, was not included as a part of the 
Rural Coalition/Coalicion Rural for the March 25, 2021 hearing 
submission's appendices. It is retained in Committee file.
---------------------------------------------------------------------------
    John J. Green, PhD, ``Summary Results from The Financial Training 
Project Assessment Survey: A Report to the Rural Coalition,'' Institute 
for Community-Based Research, Division of Social Sciences/Center for 
Community and Economic Development, Delta State University, February 
2006.
    John J. Green, Lorette Picciano, Heather Fenney, et al., ``The 
Insurance Needs of Traditionally-Underserved Farmers: Framework for a 
Multi-Community Assessment,'' presented at the Annual Meeting of the 
Rural Sociological Society, Montreal, Canada, July 2003.
    Oklahoma Black Historical Research Project, with Rural Coalition, 
et al.,\1\ ``The 100 Summit Report: Addressing the Needs and Concerns 
of the Underserved Minority Family Farming Community,'' 2017.
3. Issues Related to Farm Credit and Guaranteed Loans
    Rural Coalition Letter to the [Government Accountability] Office 
(GAO) regarding Sec. 5416. GAO Report on Credit Service to Socially 
Disadvantaged Farmers and Ranchers, Washington, D.C., March 3, 2021.**
---------------------------------------------------------------------------
    ** Editor's note: the letter is dated March 3, 2019. It has been 
published herein as received.
---------------------------------------------------------------------------
    Farm Credit Administration response to a farmer following a request 
for assistance with a complaint, December 18, 2014.
    Rural Coalition Letter to the Farm Credit Administration requesting 
information on assuring protections under the Equal Credit Opportunity 
Act, December 19, 2014; farmer name redacted.
    Letter from FSA Administrator Val Dolcini in response to our letter 
related to same farmer case, January 13, 2015, which includes the quote 
``FSA will be carefully reviewing the action taken by Farm Credit in 
this case and, if irregularities are identified, any loss claims will 
be adjusted accordingly. Aside from evaluating Farm Credit's adherence 
to published regulations for the administration of a guaranteed loan, 
FSA has no authority to oversee nor provide direction to the Farm 
Credit System. If Mr. (redacted) believes Farm Credit has acted 
improperly, he should contact the Office of Congressional and Public 
Affairs, Farm Credit Administration, in McLean, Virginia, which is the 
oversight organization for the Farm Credit banks.'' ***
---------------------------------------------------------------------------
    *** Editor's note: the letter was not included as part of the 
appendices of the Rural Coalition/Coalicion Rural for the March 25, 
2021 hearing submission.
---------------------------------------------------------------------------
Congressional Letters and Testimony
    [1] Rural Coalition, et al., Letter to the Leadership of the U.S. 
House of Representatives and the U.S. Senate to Support Emergency 
Relief for Farmers and Ranchers of Color, March 3, 2021.
    [2] Quinton R. Robinson, Esq., Policy Brief on the Need for 
Emergency Relief for Farmers of Color, Rural Coalition, March 4, 2021.
    [3] Statement of John Zippert on behalf of the Federation of 
Southern Cooperatives and Rural Coalition to the Subcommittee on 
Conservation, Energy, Research and Credit, Committee on Agriculture, 
U.S. House of Representatives, Washington, DC, March 27, 2007.
    [4] Statement of John Zippert on behalf of the Federation of 
Southern Cooperatives and Rural Coalition, to the Subcommittee on 
Departmental Operations, Committee on Agriculture, U.S. House of 
Representatives, Washington, D.C., September 25, 2002.****
---------------------------------------------------------------------------
    **** Editor's note: the order of the listing Congressional Letters 
and Testimony has been changed to reflect the order of the actual Rural 
Coalition/Coalicion Rural appendices for the March 25, 2021 hearing 
submission.
---------------------------------------------------------------------------
[Congressional Letters and Testimony 1]
March 3, 2021

 
 
 
Hon. Charles Schumer,                Hon. Mitch McConnell,
Majority Leader,                     Minority Leader,
U.S. Senate,                         U.S. Senate,
Washington, D.C.;                    Washington, D.C.;
 
Hon. Nancy Pelosi,                   Hon. Kevin McCarthy,
Speaker,                             Minority Leader,
U.S. House of Representatives,       U.S. House of Representatives,
Washington, D.C.;                    Washington, D.C.
 

Support Emergency Relief for Farmers and Ranchers of Color

    Dear Leaders Schumer and McConnell, Speaker Pelosi, and Leader 
McCarthy:

    We, the 181 undersigned organizations are committed to improving 
the financial and rural development interests of this nation's Black, 
Indigenous, Hispanic and People of Color farmers and ranchers. We 
endorse and urge you to support the Emergency Relief for Farmers of 
Color Act introduced by Senator Reverend Raphael Warnock (D-GA), 
Senator Cory Booker (D-NJ), Senator Ben Ray Lujan (D-NM), and Senate 
Agriculture Chairwoman Debbie Stabenow (D-MI). We further urge you to 
assure the emergency relief provisions drawn from this Act as included 
by House Agriculture Committee Chairman, Rep. David Scott (D-GA) to the 
Concurrent Resolution on the Budget for Fiscal Year 2021, are included 
in the final COVID Emergency Budget Reconciliation Package.
    Our expressions of support for these family farmer provisions are 
rooted in fairness and equity. American agriculture has a long history 
of providing various forms of family farm debt and other emergency 
relief. Yet the troubled history of farm loan discrimination for Black, 
Indigenous, Hispanic, and farmers of color, coupled with their 
exclusion from the many farm programs other producers depend upon to 
survive and thrive, weakens these farm families, making it impossible 
to transfer farmland wealth from generation to generation.
    For example, the $14.4 billion in trade adjustment assistance 
provided in 2019 through the Market Facilitation Program i 
did not address the needs of the small farm specialty crop and 
livestock sectors of the market where their production is concentrated. 
The emergency COVID relief provided through the Coronavirus Food 
Assistance Program, the Farmers to Family Food Box Program, and the 
Small Business loan programs have provided only minimal assistance to 
farmers of color. Several BIPOC-led farmers groups who did participate 
successfully in early rounds of the Farmers to Families Food Box 
Program were not included in subsequent rounds.
---------------------------------------------------------------------------
    \i\ GAO Report--The U.S. Department of Agriculture's (USDA) Farm 
Service Agency (FSA) distributed about $14.4 billion in 2019 Market 
Facilitation Program (MFP) payments to farming operations in all 50 
states and Puerto Rico . . . to 643,965 farming operations. MFP 
payments for 2019 also varied by type of commodity. Three types of 
commodities were eligible for 2019 MFP payments: (1) nonspecialty crops 
(including grains and oilseeds, such as corn and soybeans); (2) 
specialty crops (including nuts and fruits, such as pecans and 
cranberries); and (3) dairy and hogs. Less than ten percent went to 
farming operations that produced specialty crops or dairy and hogs.
---------------------------------------------------------------------------
    At the same time, these producers have worked diligently throughout 
the pandemic to increase production in uncertain markets and to do all 
they can with little to no government support to meet the urgent food 
needs of their communities.
    Over 200 years of beneficial treatment positions the sectors of 
farmers, who have benefited most from historic and recent investments 
in Federal farm programs, with more assets under their control, more 
land base to leverage, and more market stability to capitalize on and 
mitigate the impacts of economic crises the likes of which we are 
currently experiencing. Farmers of color were already leveraged to the 
hilt prior to the crisis because their operations haven't had the same 
multigenerational investments. The carefully crafted support from 
Emergency Relief for Farmers of Color Act provisions provides the 
urgently needed debt forgiveness and technical assistance necessary to 
shore up this sector of producers who do not enjoy extensive Federal 
support and an asset base to leverage. The legislation provides:

   $4 billion in direct relief payments to help farmers of 
        color pay off outstanding USDA farm loan debts and related 
        taxes, and help them respond to the economic impacts of the 
        pandemic, and

   Another $1 billion fund to root out systemic racism by 
        expanding the capacity of USDA to provide technical and legal 
        assistance to agricultural communities of color and to fund 
        under-resourced programs that will shape the future for farmers 
        and communities of color, including:

     Grants and loans to improve land access and address 
            heirs' property issues;

     Support for one or more legal centers focused on 
            agricultural legal issues of farmers of color (including 
            succession issues made more urgent when many families have 
            lost members to a pandemic that has claimed over half a 
            million lives);

     Pilot projects focusing on land acquisition, financial 
            planning, technical assistance, and credit;

     A racial equity commission and related activities to 
            address systemic racism across USDA;

     Support for research, education, and extension at 
            Historically Black Colleges and Universities (HBCUs), 1994 
            Tribal Colleges, and Hispanic-Serving and other 
            institutions of higher education that historically serve 
            communities of color;

     Scholarships at 1890's land-grant universities and for 
            indigenous students attending land-grant institutions;

     Support for outreach, mediation, financial training, 
            capacity building training, cooperative development 
            training and support, and other technical assistance in 
            cooperation with the community-based organizations and 
            institutions of higher education with the experience to 
            provide it;

     Assistance to farmers, ranchers, or forest landowners 
            of color that are former farm loan borrowers and that 
            suffered related adverse actions, or past discrimination or 
            bias.

    Black, Indigenous, Hispanic and Farmers of Color continue to play 
an important social and economic role in sustaining rural communities 
while protecting the natural resources and producing safe and 
affordable farm products. We, the undersigned, urge the U.S. Congress 
to ensure the urgently needed emergency relief for BIPOC farmers 
remains in the final COVID Emergency package.

 
 
 
        Original Signatories         Boulder County Farmers Markets,
                                      Boulder, CO
                                     Brandworkers, New York City, NY
Rural Coalition, Washington, D.C.    California Association of Food
 (For more information contact        Banks, Oakland, CA
 [email protected])              Carolina Farm Stewardship
                                      Association, Pittsboro, NC
North Carolina Association of Black  CEO Pipe Organs, Delafield, WI
 Lawyers Land Loss Prevention        Chicago Food Policy Action Council,
 Project, Durham, NC                  Chicago, IL
Alabama State Association of         Golden Ponds Farm, Franklin, AR
 Cooperatives, Epes, AL
National Latino Farmers and          Church Women United in New York
 Ranchers Trade Association,          State, Rochester NY
 Washington, D.C.
Environmental Working Group,         City Love, Philadelphia, PA
 Washington, D.C.
                                     Coastal Enterprises, Inc.,
                                      Brunswick, ME
        National Signatories         Colorado Farm and Food Alliance,
                                      Paonia, CO
                                     Community Alliance with Family
                                      Farmers, Davis, California
Agricultural Missions, Inc., New     Concerned Citizens of Tillery,
 York, NY                             Tillery, NC
Agroecology Research-Action          Cottage House, Inc., Ariton, AL
 Collective, Oakland, CA
Alianza Nacional de Campesinas,      Cultivate Charlottesville,
 Oxnard, CA                           Charlottesville, Virginia
American Farmland Trust,             Cumberland County Food Security
 Washington, DC                       Council, Portland, Maine
American Sustainable Business        Dakota Rural Action, Brookings, SD
 Council, Washington, DC
Campaign for Family Farms and the    Darden's Farm/Health Services,
 Environment, Washington, DC          Littleton, NC
Center for Biological Diversity,     Democracy Green, Morganton, NC
 St. Petersburg, FL
Center for Community Self-Help,      Earth Action, Inc., Pensacola, FL
 Durham, NC
Center for Science in the Public     Ecological Farming Association,
 Interest, Washington, DC             Soquel CA
Clean Water Action, Washington, DC   EcoVillage Farm Learning Center,
                                      Richmond, CA
Community Food and Justice           Ekar Farm, Denver, CO
 Coalition, Oakland, California
Cooperative Food Empowerment         Equity Advocates, Harrison, NY
 Directive, Santa Rosa, CA
Domestic Fair Trade Association,     Fair Farms, Takoma Park, MD
 Olympia, WA
Earthjustice, New York, NY           Farmworker Association of Florida,
                                      Apopka, FL
Eastern Hemp Foundation,             Feral Heart Farm, Sunol, CA
 Philadelphia, PA
Experimental Farm Network,           Food & Nutrition Innovation
 Philadelphia, PA                     Institute at Tufts University,
                                      Boston, MA
Fair Food Network, Ann Arbor, MI     Food in Neighborhoods Community
                                      Coalition, Louisville, KY
Family Farm Action, Mexico, MO       Friends of Family Farmers,
                                      Walterville, Oregon
Family Farm Defenders, Madison, WI   Georgia Organics, Atlanta, Georgia
Farm Aid, Cambridge, MA              GoFarm, Golden, CO
Farmers Market Coalition, Albany,    Greater KC Food Policy Coalition,
 CA                                   Kansas City, MO
Farms to Grow, Inc., Oakland, CA     Green State Solutions, Iowa City
Federation of Southern Cooperatives/ Healthy Gulf, New Orleans, LA
 Land Assistance Fund, Atlanta, GA
Feed the Truth, Washington DC        Heartwood, Tell City, IN
Feeding America, Chicago, IL         High Desert Food and Farm Alliance,
                                      Bend, OR
Food & Water Watch, Washington, DC   Hempstead Project Heart, WI
Food Animal Concerns Trust,          Hmong American Farmers Association,
 Chicago, IL                          St. Paul, MN
Food Chain Workers Alliance, Los     Hub City Farmers Market,
 Angeles, CA                          Spartanburg, South Carolina
Food First, Oakland, CA              Idaho Organization of Resource
                                      Councils, Boise, ID
Food Law and Policy Clinic, Harvard  Illinois Stewardship Alliance,
 Law School, Boston, MA               Springfield, IL
FoodCorps, Washington, DC            Interpret Green, Philadelphia, PA
Friends of the Earth, Washington,    Iowa Citizens for Community
 DC                                   Improvement, Des Moines, IA
GMO/Toxin Free USA, Unionville, CT   Johnson's Farm, Wichita, KS
GreenLatinos, Washington, D.C.       Kamaria Creations Wellness Retreat,
                                      Albuquerque, NM
Hazon, Falls Village, CT             Kamayan Farm, Carnation, WA
Health Care Without Harm, Reston,    Kansas Black Farmers, Nicodemus, KS
 Virginia
HEAL (Health, Environment,           Kansas Rural Center, Wichita,
 Agriculture, Labor) Food Alliance,   Kansas
 Oakland, CA
Heifer USA, Little Rock, AR          KC Farm School, Kansas City, MO
Hunger Free America Inc., New York,  Knoxville Knox County Food Policy
 NY                                   Council, Knoxville, TN
Institute for Agriculture and Trade  La Semilla Food Center, Anthony, NM
 Policy, Minneapolis MN
Johns Hopkins Center for a Livable   Land For Good, Keene, NH
 Future, Baltimore, MD
King Arthur Baking, White River      Land Stewardship Action Fund,
 Junction, VT                         Minneapolis, MN
LEAD for Pollinators, Inc., Akron,   Land Stewardship Project,
 OH                                   Minneapolis, MN
National Black Food and Justice      Latino Farmers of the Southeast,
 Alliance, Atlanta, GA                Crescent City, FL
National Family Farm Coalition,      Lyon County Food and Farm Council,
 Washington, D.C.                     Emporia, KS
National Farm to School Network,     Maine Organic Farmers and Gardeners
 Washington, D.C.                     Association, Unity, Maine
National Organic Coalition,          Mandela Partners, Oakland, CA
 Arlington, MA
National Sustainable Agriculture     Minnow, Oakland, CA
 Coalition, Washington, D.C.
National Wildlife Federation,        Missouri Rural Crisis Center,
 Washington, D.C.                     Columbia, MO
National Young Farmers Coalition,    Montana Organic Association,
 Washington, D.C.                     Missoula, MT
Natural Resources Defense Council,   New Entry Sustainable Farming
 New York, NY                         Project, Beverly, MA
Northwest Atlantic Marine Alliance,  New Mexico Hemp Company, LLC,
 Gloucester, MA                       Albuquerque, NM
Organic Advocacy, Felton, CA         Northeast Organic Farming
                                      Association of New York, Syracuse,
                                      NY
Organic Farmers Association, Spirit  Northeast Organic Farming
 Lake, IA                             Association of Vermont, Richmond,
                                      VT
Organic Seed Alliance, Port          Northeast Organic Farming
 Townsend, WA                         Association-Interstate Council,
                                      Stillwater, NY
OrganicEye, Washington, D.C.         Northeast Sustainable Agriculture
                                      Working Group, Kingston, NY
ROCUNITED, New York, NY              Nourish Colorado, Denver, CO
Pesticide Action Network, Berkeley,  Now You Know New Mexico,
 CA                                   Albuquerque, NM
Public Justice, Washington, D.C.     Oklahoma Association of
                                      Conservation Districts, Oklahoma
                                      City, OK
Rural Advancement Foundation         Oklahoma Black Historical Research
 International-USA, Pittsboro, NC     Project, Inc., Oklahoma City, OK
Rural America Chamber of Commerce,   Oregon Food Bank, Portland, OR
 Callicoon, NY
Rural Development Leadership         Pasa Sustainable Agriculture,
 Network, New York, NY                Harrisburg, PA
Slow Food USA, Brooklyn, NY          Pennsylvania Council of Churches,
                                      Harrisburg, PA
The Common Market, Philadelphia, PA  Pinnacle Prevention, Chandler,
                                      Arizona
The Food Trust, Philadelphia, PA     Prairie Rivers Network, Champaign,
                                      IL
The Marcus Foundation, Washington,   Providence Farm Collective,
 D.C.                                 Buffalo, NY
Union of Concerned Scientists,       Radical Family Farms, Sebastopol,
 Washington, D.C.                     CA
Women Food and Agriculture Network,  Rogue Permaculture, Yelm, WA
 Story City, IA
                                     Roots of Change, Oakland, CA
     Regional, State and Local       Rural Advancement Fund of the
            Signatories               National Sharecroppers Fund, Inc.,
                                      Orangeburg, SC
21st Century Youth Leadership        San Luis Valley Local Foods
 Movement, Eutaw AL                   Coalition, Alamosa, CO
Abanitu Organics, Roxboro, NC        Sanarte Healing Culture Clinic, San
                                      Antonio, TX
Advance Carolina, Raleigh, NC        Slow Food Urban San Diego, San
                                      Diego, CA
Advancing Collective Equity,         Soil Generation, Philadelphia, PA
 Portland, OR
African Alliance of Rhode Island,    Solar Wind Works, Wellington, NV
 RI
Agri-Cultura Cooperative Network,    Soul Fire Farm, Petersburg, NY
 Albuquerque, NM
Alabama Rivers Alliance,             Sustainable Food Center, Austin, TX
 Birmingham, AL
Alliance for the Great Lakes,        Texas Mexico Border Coalition
 Chicago, IL                          Community Based Organization, San
                                      Isidro, TX
Alliance for the Shenandoah Valley,  The Center for Environmental
 New Market, VA                       Transformation, Camden, NJ
American Federation of Government    The Marion Institute, Southcoast
 Employees, Local 3354, Saint         Food Policy Council, Marion, MA
 Louis, MO
Asian Pacific Islander Forward       WATCH, Inc., Charlevoix, MI, USA
 Movement, Los Angeles, California
Atrisco NM, Atrisco, NM              Western Organization of Resource
                                      Councils, Billings, MT
Atrisco Valley Farm LLC,             Winston County Self Help
 Albuquerque, NM                      Cooperative, Jackson, MS
Black Family Land Trust, Inc.,       World Farmers Inc., Lancaster, MA
 Durham, NC
Black Farmers and Agriculturalists
 Association, Tillery, NC
Black Farmers and Ranchers New
 Mexico, Jareles, NM
 

[Congressional Letters and Testimony 2]


          For More Information contact: Rural Coalition Executive 
        Director Lorette Picciano at [email protected] or 703-624-
        8869.
Policy Brief on the Need for Emergency Relief for Farmers of Color
By Quinton R. Robinson, Esq., Policy Advisor, Rural Coalition
March 4, 2021

    The Rural Coalition has submitted this Letter to Support Emergency 
Relief for People of Color Farmers and Ranchers signed by 181 
organizations in support of the socially disadvantaged \1\ farmer and 
rancher debt relief language and technical assistance provided for in 
the Emergency Relief for Farmers of Color sections of S. Con. Res. 5, 
Concurrent Resolution on the Budget for Fiscal Year 2021. Our 
expressions of support in that letter for these family farmer 
provisions are rooted in fairness and equity. American agriculture has 
a long history of providing various forms of family farm debt relief, 
and that history should not be denied to socially disadvantaged farmers 
and ranchers based on unfounded constitutional reasoning. We are 
pleased that the Budget Committee in the House of Representatives 
continues to work with the U.S. Senate to ensure the debt relief for 
socially disadvantaged farmers and ranchers in the package passed by 
the full House.
---------------------------------------------------------------------------
    \1\ In this brief, the ``socially disadvantaged'' is as defined in 
7 U.S.C. 2279a.
---------------------------------------------------------------------------
    In this brief, we provide additional analysis of the legal 
underpinnings and need for this relief.
I. Introduction
    After the settlement of Keepseagle, Garcia, and Pigford, socially 
disadvantaged producers have experienced farm loan discrimination 
within business transactions. The discriminatory loan transactions 
include inaccurate loan terms or conditions, fraud and corrupt 
organizational lending schemes that are sometimes developed and 
advanced by Federal farm loan officers. (See Wencslause Provost v. 
First Guaranty Bank, and `It's not fair, not right': how America treats 
its Black farmers D World news D The Guardian).
    Nevertheless, some Members of Congress have challenged the 
constitutionality of legislative provisions designed to provide farm 
loan debt relief to socially disadvantaged farmers and ranchers. Weak 
constitutional challenges omit critical facts that highlight Congress's 
oversight and investigative authority over farm loan programs. The 
Congress has a continuing duty to improve opportunities for success in 
agriculture through future legislative actions. Where discrimination in 
farm loan programs is prevalent, Congress must exercise its charge to 
correct inefficiencies in farm loan programs while providing 
remediation and restorative justice to socially disadvantaged farmers 
and ranchers. The farm loan debt relief in this stimulus bill is a good 
start and documented examples support the narrative that commands 
Congressional action.
    For example, in North Carolina, the U.S.D.A. Farm Service Agency 
issues a farm family an illegal loan based on the error and 
misstatements by Agency officials. Later, the Agency issues a 
foreclosure notice that would not be issued but for the Agency's error. 
In Louisiana, a family is coerced, as a condition of receiving a new 
farmer ownership loan, to refinance a parent's older farm equipment. As 
a component of the loan transaction, the guaranteed lender and FSA 
officials require the young, new and beginning, farmer to deliver the 
financed equipment to the processing mill. In Pueblo, CO, a farmer is 
given inaccurate farm loan servicing information which leads to 
foreclosure notices. In Arkansas, a farmer is given a guaranteed loan 
and immediately receives a request from the bank's loan officer to loan 
the bank officer $20,000.00 from the guaranteed loan proceeds as a 
condition of receiving the guaranteed loan. In Georgia, young farmers 
are prevented from purchasing a parent's farm from a foreclosure 
proceeding. These are the examples for which there is widespread 
awareness. Constitutional arguments against minority farm loan debt 
relief cannot withstand the illegalities of these substantiated 
examples of discrimination. Other examples will never be discovered. 
Hidden discrimination within farm loan programs is a disgrace to the 
implementation of the program, amounting to government approval of 
illegal foreclosures and farm land theft. S. Con. Res. 5, Concurrent 
Resolution on the Budget for Fiscal Year 2021 provides a solution to 
these hidden numbers.
    The Farm Credit Act's original intent was not adequately designed 
to address discrimination in loan transactions. However, no provision 
of the Act prevents the Secretary of Agriculture from connecting other 
laws and regulations to the base requirements of the Farm Credit Act 
and the Secretary of Agriculture should use the Farm Credit Act to 
build the foundation for minority farmer debt relief.
    For more than 33 years, the debt relief provisions of the 1987 Farm 
Credit Act served as sound authority to grant emergency farm loan debt 
relief for our nation's farmers and ranchers. Laws and regulations that 
provide debt relief to farmers have not been challenged in the Federal 
courts nor within the administrative function of the U.S. Department of 
Agriculture. Likewise, over the past 33 years, the U.S. Congress has 
not found reasons to discontinue family farm debt relief based on legal 
questions challenging the constitutionality of debt relief under key 
provisions of the 1987 Farm Credit Act.
    Farm loan debt relief has been granted, under appropriate 
circumstances, as a family farm preservation method of rescheduling 
debt in order to keep farmers on the land during harsh economic 
conditions. Thus, any attack on debt relief for socially disadvantaged 
farmers and ranchers during the current COVID-19 pandemic must be 
characterized as a mean-spirited attempt to further exclude socially 
disadvantaged producers from equitable participation in USDA's programs 
and services.
    The U.S. Department of Agriculture's legal and regulatory framework 
used for farmer emergency financial assistance is firmly established 
and consistently applied to large row crop farmers and ranchers. Farm 
emergency loans and program payments work well for large row crop 
farmers. However, the same regulatory framework escapes the emergency 
farm loan needs of socially disadvantaged producers during the COVID-19 
pandemic. The political support for the large farmer emergency 
financial assistance framework spurred the COVID-19 emergency Federal 
financial assistance, which totaled over $14.4 billion within the 
narrow time period of just 16 months. Using structured laws and 
regulatory authorities such as the Commodity Credit Corporation, 
Congress and the Administration protected the farm income and 
production assets owned by large row crop farmers and private 
investors. The payments are said to support family farmers during the 
COVID-19 economic emergency. The problem is that minority family 
farmers are consistently excluded from meaningful participation in 
emergency financial assistance.
    Minority family farmers are a critical component of America's 
family farm system. The family farm system is a cherished system, 
receiving congressional support for more than 120 years. In fact, 
current law demands that the Secretary of Agriculture conduct the 
emergency loan programs under 7 U.S.C. 1961 in a manner that fosters 
and encourages the family farm system of agriculture, consistent with 
the reaffirmation of policy and declaration of the intent of Congress 
contained in section 102(a) of the Food and Agriculture Act of 1977. (7 
U.S.C. 1166(a).) The Budget Reconciliation language again reaffirms the 
Congressional intent that socially disadvantaged farmers and ranchers 
are not to be excluded from COVID-19 emergency spending and debt relief 
is the best way of supporting socially disadvantaged farmers and 
ranchers.
II. Essence of the Minority Farmer Debt Relief
    The preamble of the minority farmer debt relief language recognizes 
the historical, long-term negative impacts of discriminatory lending 
which impacts minority family farms more than any other classification 
of farm operations. socially disadvantaged farmers and ranchers play an 
important social and economic role in sustaining rural communities 
while protecting the natural resources and producing safe and 
affordable farm products. The troubled history of farm loan 
discrimination, when added to farm program participation 
discrimination, weakens minority farm families, making it impossible to 
transfer farmland wealth and the farming vocation from generation to 
generation.
    The undersigned organizations recognize that all family farmers 
need assistance from the government during the COVID-19 pandemic. Our 
awareness of a broad need for emergency farm assistance must be open 
minded and embrace the familiar concept of family farm debt relief for 
socially disadvantaged farmers and ranchers as a manner of sustaining 
rural communities and rural economies. This is not a large ask.
    The minority farmer farm debt relief accomplishes this goal in 
section 1005 to 1006 of S. Con. Res. 5, Concurrent Resolution on the 
Budget for Fiscal Year 2021, Budget Reconciliation proposal. The 
proposal authorizes the Secretary of Agriculture to use existing 
statutory authorities to develop and implement a plan of debt relief 
for socially disadvantaged farmers and ranchers. We are committed to 
working with the Secretary of Agriculture to ensure that a plan of farm 
loan debt relief is comprehensive, effective, and inclusive.
III. Selective Debt Relief is Constitutional, Firmly Established and 
        Consistently Applied
    Debt relief for America's family farmers has a long history. The 
benefits of such farmer debt relief are well documented and farm debt 
relief should not be prevented as a benefit inside farm gates of 
socially disadvantaged farmers and ranchers. Debt relief for socially 
disadvantaged producers adds an additional level of legitimacy for farm 
loan programs, especially where there is documented discrimination in 
farm loan servicing. There are five prominent statutory provisions that 
support the constitutionality of minority farmer debt relief. 
Therefore, any constitutional attack on these provisions will be 
diffused.
A. 7 CFR 766.401(b) Agency Exception Authority
    When measured against the documented history of disparate treatment 
and disparate impact in farm loan programs, debt relief for socially 
disadvantaged producers adds an additional level of program legitimacy, 
especially where there is documented discrimination in farm loan 
servicing. Under current law, the Secretary of Agriculture has the 
authority to improve the financial and operational efficiency of all of 
USDA's farm loan programs. Minority farmer debt relief is an 
administrative tool to accomplish that goal while providing restorative 
justice for minority farm loan borrowers. Pursuant to 7 CFR 766.401(b), 
the Secretary of Agriculture may, to advance the financial interests of 
the farm loan program, relieve the debt of farmers under circumstances 
where by the debt relief promotes a financial interest of the Agency. 
We believe that restorative justice in the form of farm loan debt 
relief is a circumstance that promotes the financial interest of the 
Agency. We are not alone in our restorative justice convictions.
    Congressman David Scott, Chairman of the House Committee on 
Agriculture ensured that Section 1005 of Budget Reconciliation proposal 
contained language to enumerate past discrimination against minority 
farm loan borrowers. 7 CFR 766.401(b) states in relevant part: ``(b) 
the Agency's financial interest would be adversely affected by acting 
in accordance with published regulations or policies and granting the 
exception would resolve or eliminate the adverse effect upon its 
financial interest.'' (7 CFR 766.401(b).)
B. Farm Loan Equitable Relief
    A provision of farm loan equitable relief may be combined with base 
provision within the Farm Credit Act for the purpose of developing a 
plan of minority debt relief.
    Reported family farm foreclosures, under strange circumstances of 
government errors and mistakes, secured the attention of the U.S. House 
and Senate Agriculture Committees in 2018, leading to the passage of 7 
U.S.C.  2008a. The new law is referred to by farmers and stakeholders 
as ``equitable relief'' in farm loan programs. Notably, farm loan 
errors and mistakes prior to December 20, 2018 were definitionally 
excluded from agricultural regulatory schemes designed to grant 
equitable relief.
    We have gathered evidence to show that loan mistakes made against 
socially disadvantaged producers are not mistakes, but intentional acts 
designed to cause foreclosure of farmland. Generally, a grant of 
equitable relief to a farmer is permitted, with limitations, in order 
to allow a producer to keep program benefits when the possession of the 
benefit is deemed noncompliance with statutes and regulations and such 
noncompliance is caused by the misaction or misinformation provided to 
the program participant by an authorized government official. See 7 
U.S.C.  2008a.; 7 U.S.C.  7996 (d); 7 U.S.C.  6998 (d), and 7 U.S.C. 
 1339 (causation based on misaction or misinformation). It is 
important to note that 7 U.S.C.  2008a. uses a different causation 
standard than 7 U.S.C.  7996 (d); 7 U.S.C.  6998 (d), and 7 U.S.C.  
1339.
    Pursuant to subsection (c) of the 7 U.S.C. 2008a., the farmer must 
identify the government's farm loan error and provide notice of the 
error or mistake directly to the Secretary in a format that is 
acceptable to existing statute, regulation, or agency guidance. USDA's 
farm loan programs offer at least four different approaches of 
providing notice of the harmful, unlawful error. The farm loan error, 
for which equitable relief may be appropriate, may be noticed to the 
Secretary of Agriculture in coordination with four USDA's various 
institutional appeal or grievance processes. Subject to filing deadline 
restrictions, institutional coordination of requests for equitable 
relief are found in and included in a farmer's substantive explanations 
and statements offered by a farmer in support of the following appeal 
related processes:

  (i)  U.S.D.A. civil rights program and loan complaint pursuant to (7 
            CFR  15.1-15.12) (180 days from date of last act of 
            discrimination);

  (ii)  U.S.D.A. National Appeals Division (NAD) for appeal of an 
            adverse farm program decision pursuant to 7 U.S.C. 6991 and 
            7 CFR 11.1 (30 days from adverse program decision);

  (iii)  Loan servicing options such as debt write down, or deed in 
            lieu of foreclosure pursuant to (7 CFR  766.101-766.116-
            766.150) (30 days from adverse action); and

  (iv)  Submission of official correspondence to the Secretary 
            explaining the farm loan error or mistake and its attendant 
            correlations to default, acceleration and foreclosure 
            pursuant to 7 U.S.C.  2008a.

    Except for farm loan equitable relief under 7 U.S.C.  2008a., 
equitable relief made available in civil rights complaints, NAD program 
appeals, and farm loan servicing, represents a forum for such relief in 
a program. That farm loan grievance program is firmly established and 
consistently implemented by the Secretary. Equitable relief language is 
self-executing, statutory language. It provides an additional component 
of the historical regulatory scheme for providing general equitable 
relief to farmers within USDA's programs and services. Farm loan, civil 
rights, NAD appeals, and form loan servicing, when analyzed 
collectively, represent a continuum of legal norms and standards 
whereby the Secretary of Agriculture may grant a provision of equitable 
relief.
    The Secretary has authority to forgive farm loan debt pursuant to 7 
CFR 766.401(b).
IV. Disparate Treatment in Emergency Farm Assistance
    The cumulative effect of farm loan discrimination and exclusion 
from other programs has left socially disadvantaged farmers and 
ranchers with small landholdings comprised of more fragile and less 
productive land. Consequently, socially disadvantaged producers have 
less access to the commodity, conservation, disaster, and risk 
management programs. Mid-size and large-scale operations fair better 
under the same programs and benefits. Congress spoke clearly and 
provided generous emergency relief to large and mid-size producers to 
address market disruptions in 2019 and the pandemic and fluctuations in 
world markets in 2020. During this same time period, Congress was 
silent with respect to emergency funding provisions to help socially 
disadvantaged farmers and ranchers to secure the income necessary to 
run their operations and pay their loans.
    For example, the emergency relief provided by Congress through the 
Coronavirus Food Assistance Program largely failed to provide relief to 
people of color farmers and ranchers who now seek loan forgiveness. 
White farmers received 97% of the $9.2 billion allocated through 
October 2020.\2\
---------------------------------------------------------------------------
    \2\ https://www.ewg.org/news-and-analysis/2021/02/usda-data-nearly-
all-pandemic-bailout-funds-went-white-farmers.
---------------------------------------------------------------------------
    In 2019, little emergency relief was provided to the farmers 
seeking it. USDA paid $14.4 billion in 2019 Market Facilitation Program 
(MFP) payments to farming operations in all 50 states and Puerto Rico. 
According to [Government Accountability] Office (GAO),\3\ these 
payments were intended to offset the effects of trade disruptions and 
tariffs targeting a variety of U.S. agricultural products. FSA 
distributed these payments to 643,965 farming operations. The average 
MFP payment per farming operation for 2019 was $22,312 but varied by 
county, ranging from $44 to $295,299. MFP payments for 2019 also varied 
by type of commodity. Three types of commodities were eligible for 2019 
MFP payments: (1) nonspecialty crops (including grains and oilseeds, 
such as corn and soybeans); (2) specialty crops (including nuts and 
fruits, such as pecans and cranberries); and (3) dairy and hogs.
---------------------------------------------------------------------------
    \3\ GAO Report--The U.S. Department of Agriculture's (USDA) Farm 
Service Agency (FSA) distributed about $14.4 billion in 2019 Market 
Facilitation Program (MFP) payments to farming operations in all 50 
states and Puerto Rico) . . . Less than ten percent went to farming 
operations that produced specialty crops or dairy and hogs.
---------------------------------------------------------------------------
    Most of the 2019 MFP payments went to farming operations that 
produced nonspecialty crops. Less than ten percent went to farming 
operations that produced specialty crops or dairy and hogs. USDA made 
approximately $519 million in additional MFP payments in 2019 compared 
with 2018 because of increases in payment limits--the cap on payments 
that members of farming operations can receive. FSA distributed these 
additional MFP payments to about 10,000 farming operations across 39 
states. The amount of additional MFP payments that FSA distributed for 
2019 varied by location. Farming operations in five states--Texas, 
Illinois, Iowa, Missouri, and Minnesota--received almost half of all 
additional payments.
    These payments followed the approximately $8.6 billion USDA 
announced it had distributed for 2018. USDA referred to these 2018 and 
2019 payments as the MFP. In comparison with 2018, USDA changed the 
2019 payment structure for the three types of commodities that were 
eligible for payments, including increasing the payment limit for each 
of these three types, with more aid going to larger operations.
    The debt relief and other technical assistance provided for in the 
Emergency Relief for Farmers of Color sections of S. Con. Res. 5, 
Concurrent Resolution on the Budget for Fiscal Year 2021, referred to 
as the COVID Emergency Budget Reconciliation Package, are urgently 
needed to afford this important sector of agriculture the critical type 
of emergency relief they require to address their debt and maintain 
their land and operations for the future. We urge that Congress approve 
the full measure of proposed relief.
[Congressional Letters and Testimony 3]
Statement of John Zippert on Behalf of the Federation of Southern 
        Cooperatives/Land Assistance Fund and the Rural Coalition/
        Coalicion Rural to the U.S. House of Representatives, Committee 
        on Agriculture, Subcommittee on Conservation, Credit, Energy, 
        and Research *
---------------------------------------------------------------------------
    * Editor's note: the statement submitted as part of the appendices 
of the Rural Coalition/Coalicion Rural for the March 25, 2021 hearing 
is incomplete (it does not include pp. 1-4). The link for the testimony 
submitted for the hearing, in its entirety, is: https://
www.govinfo.gov/content/pkg/CHRG-110hhrg36367/pdf/CHRG-
110hhrg36367.pdf, pp. 185-203. Further note: the published hearing, 
110-8 does not include Appendix B of this testimony (Information 
Required From Non-governmental Witnesses).
---------------------------------------------------------------------------
Washington, D.C.
March 27, 2007

          Excerpt: [beginning on p. 5 of the testimony].

 
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Program Participation Report
Program National Summary
Fiscal Year: 2003
Farm Service Agency
Beginning Farmer Down Payment Loan Program
----------------------------------------------------------------------------------------------------------------
                                Male
                               Female
                                     Unknown
----------------------------------------------------------------------------------------------------------------
                      Hispanic or  Not Hispanic  Hispanic or      Not      Hispanic or      Not      Undiscloded
                        Latino       or Latino      Latino    Hispanic or     Latino    Hispanic or   Ethnicity
                                                                 Latino                    Latino
----------------------------------------------------------------------------------------------------------------
                     Participatio  Participatio  Participati  Participati  Participati  Participati  Participati
                      n Indicator   n Indicator       on           on           on           on           on
                                                  Indicator    Indicator    Indicator    Indicator    Indicator
----------------------------------------------------------------------------------------------------------------
             White            <3%         99.5%          <3%         3.9%           0%          <3%
             Black             0%           <3%           0%           0%           0%           0%
             AI/AN            <3%           <3%           0%           0%           0%           0%
             Asian             0%           <3%           0%          <3%           0%           0%
               HPI             0%            0%           0%           0%           0%           0%
             Other            <3%           <3%          <3%           0%           0%           0%
             Multi             0%           <3%           0%           0%           0%           0%
           Unclass                                                                                            0%
                    --------------------------------------------------------------------------------------------
  Total............           <3%         94.2%          <3%         4.0%           0%          <3%           0%
----------------------------------------------------------------------------------------------------------------

    We believe that the Congress should further investigate why this is 
so, and what factors in the design and delivery of the program are 
responsible for the very low participation by socially disadvantaged 
producers, especially because Hispanic producers, for example, 
constitute one of the fastest growing populations of new entrants into 
agriculture. Also, the very low proportion of women producers who 
participate also warrants examination, as this is another example of a 
population whose participation in agriculture is growing.
    As we have researched this question, we have several suggestions: 
the definition of beginning farmer still requires 3 years of management 
of experience. How this experience is defined and accounted for by the 
department may have a bearing on who is accepted into the program. We 
recommend, for example, that experience as a farmworker be counted 
towards the qualification for beginning farmers. In addition, the 
standards for credit worthiness are as stringent or more stringent than 
the standards used by commercial lenders.
    As this Committee considers the recommendations to target all 
credit to beginning and socially disadvantaged farmers, it will be 
important to consider how this recommendation may ultimately affect the 
availability of credit. For example, farmers who have left the peanut 
and tobacco programs or who are otherwise transitioning to different 
crops may be in need of credit for this transition. Also, directing 
resources generally to beginning and socially disadvantaged farmers and 
ranchers without more specific direction with respect to the 
proportions of funds for either population may have the impact of 
disadvantaging one or the other of these populations, most likely 
socially disadvantaged producers.
    It is also important to realize that socially disadvantaged 
producers have historically had very low participation rates in 
commodity and conservation programs. The billions of dollars in Federal 
support provided for these programs only reaches a small percentage of 
these producers. The reasons for lack of access to Federal farm 
programs are also complex. However, the net impact of this exclusion 
has often affected the size of operations and the quality of the land 
accessible to socially disadvantaged producers, leaving less equity in 
the hands of socially disadvantaged farm families. As a result, credit 
scores may be lower and it may be more difficult for these families to 
at first meet the stringent creditworthiness standards FSA requires.
    We believe that special attention will need to be paid to these 
definitions and situations in order for USDA to fulfill its mission as 
lender of last resort, and in order to assure access to credit for 
socially disadvantaged farm families who wish to enter or continue in 
agriculture.
    Transparency and Accountability in Farm Loan Programs--In recent 
years, the Farm Service Agency has routinely reported that loans to 
socially disadvantaged farmers are made in 30 days or less, and on par 
with loans to other farmers. FSA staff throughout the nation can report 
these statistics with respect to their own county and state. With these 
statistics as a sole reference point, it would appear that all is well 
with respect to access to credit and delivery of services.
    We believe these statistics are not a true picture of the actual 
situation. We urge the Committee to look further and to establish some 
of the measures we have long proposed in order to move beyond the 
appearance of equity to real equity in services, and the establishment 
of new generations of people of color farmers on the land.
    Over the years, we have observed and documented many practices that 
serve to discourage and separate minority farmers from the programs and 
services they need. We will briefly review some examples of these 
practices and some solutions we recommend.
    Discouragement of Applications and Services--At the National 
Immigrant Farming Initiative meeting in February in Las Cruces, New 
Mexico, a Hmong farmer approached our Executive Director from 
Wisconsin. ``How big is a farm?'' she asked the ED. In attempting to 
understand the reason for her question, we determined she had been 
turned away by the local FSA office after being told her operation was 
not a farm. However, this producer reported that she owned land and 
sold more than $1000 of produce a year. She did not understand why she 
was turned away and had not been asked to provide information to be 
listed on the County SCIMS list.
    In the aftermath of [H]urricanes Katrina and Wilma, we held a 
training session for some 50 Latino producers in Dade County, Florida. 
Four members of the FSA staff attended the session at our request. The 
producers present reported a typical pattern: following these and 
previous disasters, they called the county office to request disaster 
assistance. The office confirmed reports that they producers were told 
there was no assistance available. The answer was technically correct 
at the time, as it is usually long after a disaster that Congress 
approves aid.
    However, the producers were not told to come into the office to 
sign up on the SCIMS list, or to begin the application process for any 
available programs, or of requirements to take out crop insurance. The 
FSA staff reported that they were too busy to schedule appoints and 
have the farmers come in. As a result, the farmers--some repeatedly and 
after multiple disasters--were never informed of the many services FSA 
might provide, of the need to have crop insurance in order to qualify 
for most emergency aid, and of records they needed to keep to qualify 
for the emergency conservation program. They also were not included on 
the county list to receive newsletters and other important information 
and notifications, including loan and insurance deadlines and 
notification of funds available. As a result of not being included on 
the SCIMS list, farmers were also being missed in the Census of 
Agriculture.
    During the training, the FSA staff registered over \1/4\ of the 
farmers who attended who had not previously been included on the SCIMS 
list or received any service from USDA. Other farmers were informed of 
the documents they needed to bring and of the need to go into the 
office in the future to register. However, the outreach function that 
FSA needs to perform routinely was only completed because the Farm Aid 
supported training and organizations, including ours, went to the 
county to inform farmers of the services to which they are entitled.
    FSA should be required to tell all farmers who request any service 
of the need to be listed on the SCIMS list and of their right to make 
an application whether or not the office is inclined to view them as 
qualified.
    First Come, First Served Standard--FSA credit program funds are 
delivered by state and county based on the number of farmers, the size 
of operations, etc. Previous investigations by GAO and IG have found 
that despite the fact that socially disadvantaged farmers had been 
denied credit, this practice did not constitute discrimination because 
the applications were only denied due to lack of funds.
    However, this standard is manifestly unfair when farmers are 
discouraged from applying for programs, are not included on county 
lists or otherwise informed in a timely manner of the availability of 
funds. If a local office wished to assure funds for some farmers over 
others, there is the risk that a conflict of interest is created 
without some independent verification that all farmers receive the same 
information and ability to access the funds.
    We believe this situation is especially serious with regard to the 
provision of disaster loans. While we do believe loan limits need to be 
raised, we caution the Committee that increasing these limits without 
increasing the level of funding may in fact exacerbate the potential 
inequities of accessing limited pools of loan funds.
    What Constitutes an Application--FSA does not consider a farmer to 
have applied for loan until the loan application is complete. While 
improvements have been made in informing farmers what documentation is 
necessary for an application, we have heard many stories of lengthy 
processes where additional information is requested. For some farmers--
e.g., American Indian producers who often live long distances from 
county offices, the need to return to the office with additional 
documents greatly lengthens the application process.
    However, the final rule 12CFR Part 202, Regulation B, Docket No R-
1008, implementing the Equal Credit Opportunity Act states:

          (e) Applicant means any person who requests or who has 
        received an extension of credit from a creditor, and includes 
        any person who is or may become contractually liable regarding 
        an extension of credit . . .
          (f) Application means an oral or written request for an 
        extension of credit that is made in accordance with procedures 
        used by a creditor for the type of credit requested. The term 
        application does not include the use of an account or line of 
        credit to obtain an amount of credit that is within a 
        previously established credit limit. A completed application 
        means an application in connection with which a creditor has 
        received all the information that the creditor regularly 
        obtains and considers in evaluating applications for the amount 
        and type of credit requested (including, but not limited to, 
        credit reports, any additional information requested from the 
        applicant, and any approvals or reports by governmental 
        agencies or other persons that are necessary to guarantee, 
        insure, or provide security for the credit or collateral). The 
        creditor shall exercise reasonable diligence in obtaining such 
        information.

    According to this regulation, an applicant includes a person who 
has requested credit, and an application includes oral and well as 
written requests for credit. While an application is defined as made in 
accordance with procedures used by a creditor, the regulation makes a 
distinction between an application and a completed application.
    Thus, in order to evaluate the fairness of the system FSA has in 
evaluating applications, we recommend that Congress direct that FSA 
revise its reporting system to reflect the period of time it takes to 
process a credit application from the first submission of an 
application to the completion of the process. This would be a fairer 
reflection of the time period needed for processing.
    We also recommend that Congress amend the 10708 requirements of the 
farm bill to require FSA to report on the national, state and county 
level by race, gender and ethnicity, the months in loan funds were 
disbursed under each type of loan program.
    It makes a great deal of difference whether a loan is disbursed 
early in the planting season or at a later date.
    Receipt for Service--Since 2002, we have proposed to the department 
and to Congress that USDA be required to provide to all farmers and 
ranchers a time and date stamped ``receipt for service.'' This receipt 
should be provided whenever any farmer requests an application or 
service. The receipt should details the name of the farmer or 
prospective farmer, the location of the office by county, what was 
requested, what was provide and not provided, if a request was not met, 
why the application or service was not provided, and what follow-up 
action is recommended or required. A copy of the receipt, which could 
be generate electronically, should be given to the farmer, and one 
maintained in the office. Because these receipts would not be used to 
evaluate applications for programs and services, Congress should also 
include authority and require FSA and other agencies to collect data by 
race, gender and ethnicity using both self-identification, and 
identification by the agency when the first is not provided, in order 
to evaluate its responsiveness.
    This receipt would be critical to assuring equity for programs that 
are provided on a first come first serve basis, and to document 
situations where farmers and prospective farmers are discouraged from 
seeking and applying for benefits.
    In addition, it would also document and allow Congress and the 
Department to review to the county level the actual dates on which all 
applications were received by the agency, and to identify places where 
some farmers and ranchers may receive information, services and 
approval more immediately than others.
    USDA responded to our recommendations for a receipt for service by 
instituting a Customer Comment Card. This card does not serve the same 
purpose as a service receipt and goes back to the same complaint 
generated system of accountability that has hampered fairness for many 
years.
    Creditworthiness--Many of the laws that govern farm credit arose 
from the agricultural credit crisis in the 1980's. While borrowers 
rights and other protections were included, the experience of losses by 
the government, primarily with respect to emergency loans, led to the 
inclusion of good faith provisions and stringent creditworthiness 
standards.
    In the present time, evaluation by FSA of creditworthiness is a 
factor that prevents many socially disadvantaged producers from 
securing credit. Our member organizations have reported that FSA's 
system of determining creditworthiness is often a factor that results 
in the denial of applications. We believe the FSA scoring system should 
be reviewed based on the following standards in ECOA (final rule 12 CFR 
Part 202, Regulation B, Docket No R-1008):

          (p) Empirically derived and other credit scoring systems--(1) 
        A credit scoring system is a system that evaluates an 
        applicant's creditworthiness mechanically, based on key 
        attributes of the applicant and aspects of the transaction, and 
        that determines, alone or in conjunction with an evaluation of 
        additional information about the applicant, whether an 
        applicant is deemed creditworthy. To qualify as an empirically 
        derived, demonstrably and statistically sound, credit scoring 
        system, the system must be:

                  (i) Based on data that are derived from an empirical 
                comparison of sample groups or the population of 
                creditworthy and noncreditworthy applicants who applied 
                for credit within a reasonable preceding period of 
                time;
                  (ii) Developed for the purpose of evaluating the 
                creditworthiness of applicants with respect to the 
                legitimate business interests of the creditor utilizing 
                the system (including, but not limited to, minimizing 
                bad debt losses and operating expenses in accordance 
                with the creditor's business judgment);
                  (iii) Developed and validated using accepted 
                statistical principles and methodology; and
                  (iv) Periodically revalidated by the use of 
                appropriate statistical principles and methodology and 
                adjusted as necessary to maintain predictive ability.

          (2) A creditor may use an empirically derived, demonstrably 
        and statistically sound, credit scoring system obtained from 
        another person or may obtain credit experience from which to 
        develop such a system. Any such system must satisfy the 
        criteria set forth in paragraph (p)(1)(i) through (iv) of this 
        section; if the creditor is unable during the development 
        process to validate the system based on its own credit 
        experience in accordance with paragraph (p)(1) of this section, 
        the system must be validated when sufficient credit experience 
        becomes available. A system that fails this validity test is no 
        longer an empirically derived, demonstrably and statistically 
        sound, credit scoring system for that creditor.

    Congress should review the FSA credit scoring system and the 
methods that it has used to develop and validate this system. It should 
determine if this system is periodically reviewed and maintains 
predictive ability. As the lender of last resort, FSA standards for all 
loans should be less stringent when compared to commercial lending. 
Congress should request that FSA compare its standards with those of 
commercial lenders.
    Because of this history of discrimination that has held this agency 
liable for hundreds of millions of dollars of losses caused by the 
practices of the agency itself, Congress should assure that this system 
take into account the influence of these practices on the 
creditworthiness of the producers who now seek loans.
    Congress should also determine to what extent approval of credit 
rests on access to income from other Federal farm programs, and the 
degree to which the creditworthiness of socially disadvantaged farmers 
is affected by the degree of access they have to other programs.
    The 10708 Transparency and Accountability Requirements should be 
amended to include a report on the number and percentage of farmers by 
race, gender and ethnicity who participate in multiple USDA programs, 
and the level of total benefits that are provided to producers by race, 
gender and ethnicity.
    Waiver of Interest--In the wake of entreaties to declare 
moratoriums and take other action to resolve the crisis facing socially 
disadvantaged farmers who have suffered discrimination and all farmers 
who have faced serious losses as a result of the hurricanes of 2005, 
repeated drought and other national disasters, FSA has repeatedly 
asserted that it lacks the authority to waive interest
    We recommend that this Committee determine in fact whether any 
additional authority is required to provide this authority to FSA. For 
example, are the Standards for the Administrative Collections of 
Claims, 31 CFR 901.9 on Interest, penalties, and administrative costs 
adequate for this purpose?

          (g) Agencies shall waive the collection of interest and 
        administrative charges imposed pursuant to this section on the 
        portion of the debt that is paid within 30 days after the date 
        on which interest began to accrue. Agencies may extend this 30 
        day period on a case-by-case basis. In addition, agencies may 
        waive interest, penalties, and administrative costs charged 
        under this section, in whole or in part, without regard to the 
        amount of the debt, either under the criteria set forth in 
        these standards for the compromise of debts, or if the agency 
        determines that collection of these charges is against equity 
        and good conscience or is not in the best interest of the 
        United States.
          (h) Agencies shall set forth in their regulations the 
        circumstances under which interest and related charges will not 
        be imposed for periods during which collection activity has 
        been suspended pending agency review.

    The fair resolution of all outstanding claims related to 
discrimination by the Farm Service Agency certainly should be 
considered a matter of equity and good conscience, and in the best 
interest of the United States. We recommend the Committee review this 
authority, and also require FSA to report on its compliance with 
paragraph h of this section.

    We also urge that the Committee review the regulations instituted 
following the disasters in 2005 that allowed the suspension of payments 
on loans for farmers in declared disaster areas, but without any waiver 
of interest, and that required a balloon payment of all the deferred 
payments and interest in January 2007. A report on the number and 
location of loans that may be forced into acceleration because of an 
inability to make this balloon payment should be made, and Congress 
should undertake any retroactive and remedial action necessary to 
prevent additional loss of farms in the wake of disasters.

    Appraisals--Over the years, we have received continued complaints 
for farmers on the fairness of the appraisals used for loan approvals. 
Standards for appraisals should be reviewed and assurance of equal 
credit opportunity protections be established.
    While in small rural communities, testing programs such as those 
widely used in mortgage lending are more difficult to establish, the 
Congress should consider ways to work through the Comptroller of the 
Currency to provide funding and guidance for some measure of testing to 
bring to light problems in both direct and guaranteed lending programs 
of the department, especially with regard to appraisals.
    Right of First Refusal on Inventory Property--In the 1987 
Agriculture Credit Act, this Committee wrote the very first provisions 
designed to begin assisting socially disadvantaged farmers and 
ranchers. On provision of this law afforded socially disadvantaged 
farmers and ranchers the right of first refusal on inventory property. 
When Congress subsequently instituted programs for beginning farmers 
and ranchers, it replaced the right for socially disadvantaged farmers 
and ranchers with the right of first refusal for beginning farmers.
    This situation is instructive and illustrates why in the 2007 Farm 
Bill debate, careful attention needs to be paid to securing an 
appropriate balance in credit law (and other areas of the farm bill) to 
the needs of these two populations. At a minimum, we suggest that the 
right of first refusal be restored first for socially disadvantaged 
farmers and ranchers, and then for other beginning farmers and 
ranchers.
    Loan Limits--We agree with proposals to increase loan limits 
especially for farm ownership loans to more accurately reflect the 
current costs farmers face. But at the same time, we encourage this 
Committee to consider the impacts we have outlined above, and the need 
to provide more funding for direct loans.
    Transparency and Accountability--The Federal Government has been 
held liable for hundreds of millions of dollars of payment to farmers 
who won discrimination claims primarily in credit programs. While we 
would argue that most socially disadvantaged farmers were also denied 
access in many ways to other Federal farm programs, their right to seek 
damages is only secured for credit programs.
    Virtually all actions to assure fair service by FSA and other USDA 
actions arise from individual complaints made by farmers and ranchers. 
In Section 10708 of the 2002 Farm Bill, Congress adopted Transparency 
and Accountability requirements that require the department to provide 
data at the national, state and local level on participation rates by 
race, gender and ethnicity for each program that serves farmers.
    FSA has been the most responsive agency in providing the data 
required under this section.
    However, the usefulness of this data has been severely compromised 
by the matter of presentation used in the reports that are compiled by 
the Office of the Assistant Secretary for Civil Rights. Instead of 
providing searchable databases, the Office of the Assistant Secretary 
has presented the participation rates down to the county level as 
120,000 separate PDF charts.
    Ostensibly, the reason for this method or presentation is in order 
to protect the privacy of the lone socially disadvantaged farmer who 
may participate in a particular program of the department in a 
particular county. The U.S. Census and the Census of Agriculture have 
developed other methods and defaults to protect privacy that do not 
compromise the integrity and usefulness of the data.
    In addition, USDA has not provide, as required in 10708, a report 
that compares the participation of farmers by race, gender and 
ethnicity in programs as compared to their representation in the Census 
of Agriculture
    Earlier in this testimony, we provided the 10708 report for the 
Beginning Farmer Down Payment Loan Program. In the appendix we have 
provided 10708 reports for other programs. A review of all of these 
programs would show that the participation rates of socially 
disadvantaged producers are abysmally low. Only in programs 
specifically constructed, for example, to serve American Indian 
farmers, is participation assured. The highest level of participation 
in any other program we found in our review was participation of 8% to 
9% by African American producers--in the peanut buyout program.
    The 10708 requirements are a very important tool for the department 
and Congress to develop an independent assessment of the problems in 
service delivery and program structure that may present barriers to 
equitable participation of producers. This data should be presented in 
a format that will allow real comparisons between similar counties and 
states that would allow service delivery issues to be identified and 
rectified, and would also allow Congress to determine where program 
structures and rules may be responsible for barriers to service.
    County level data, and comparisons at that level to Agriculture 
Census numbers will allow agencies, farmers, and the organizations that 
represent them not only to identify programs where participation is 
inadequate. It will also allow outreach services and remedial actions 
to be taken. In addition, Congress should require that this data be 
utilized in the evaluation of all programs and in performance reviews 
of staff. In the 2002 hearing in the House Agriculture Committee, USDA 
testified that in the wake of the massive discrimination liabilities 
against the department, only an handful of staff received reprimands or 
any other personnel action. The lack of accountability to agencies and 
staff continue to foster a climate that leaves no consequence for 
actions that are contrary to the interests of socially disadvantaged 
producers, taxpayers and the United States.
    We recommend that USDA be asked immediately to provide the required 
report comparing Agriculture Census data to the participation reports, 
and for its proposals on how immediate changes can be made in order to 
provide 10708 data in a useful form. We will provide to the Committee 
proposed language to amend 10708 in order to assure this requirements 
provide the system of review that is vital to assuring quality programs 
and fair service.
    Interest Subsidies--FSA has authority and does provide subsidized 
interest for farmers. Congress should assure that funds are adequate 
for this program, which is important to farmers. In addition, FSA 
should provide a 10708 report on participation in this program.
    Farm Loans and Disasters--Emergency loans are critical to producers 
in the face of disasters. In addition, measures to protect the ability 
of farmers to manage current loans are also needed. However, in order 
to allow these to help farmers in a manner that will prevent placing 
them later in a precarious situation, we recommend the following 
measures:

  b Review and provide any additional authority to allow FSA to suspend 
        the accrual of interest in times of disaster, and take 
        additional measures as necessary to allow delay in payments.

  b Add payments to end of loans and allow extension of loans.

  b Extend PL 108-324 to remove the limit of coverage for farmers who 
        have experienced multiple disasters.

  b Set in place an automatic disaster set aside for payments on direct 
        FSA and RHS loan installments due in January 2007. Enable and 
        encourage private lenders with guarantees to do the same.

  b Complete suspension of offsets.

  b Expand servicing for 90 days past due loans.

  b Provide Loan forgiveness for those who will never be able to pay or 
        who have suffered losses that reduce the value of collateral.

  b Allow appeal between agencies--when denied by Farm Service Agency 
        and Small Business Administration, allow appeals to both.

    Credit and Indian Agriculture--The United States Government through 
Farm Service Agency remains the largest source of lending for Indian 
Reservations. Farm lending programs need to increase their focus on 
youth lending as well as new farmer lending. The present beginning 
farmer program needs to be modified to realistically fit a beginning 
farmer. Present criteria limits participation to only those that have 
adequate capital that would allow borrowing at any commercial credit 
source.

   Increased effort must be put forth to facilitate the 
        insurance that trust lands stay in trust during the debt 
        servicing process of FSA. The new Administration of the 
        Department of [the] Interior may be receptive to the transfer 
        of trust title between Interior and FSA. The options presented 
        by the 98 Credit Amendments need to be utilized by FSA, BIA and 
        Tribes.

   Increased participation in FSA lending programs would take 
        place if qualifying Tribal Credit Branches were allowed 
        guaranteed lender status.

   The Tribal Credit Outreach Program should be expanded to 
        cover a minimum of 18 states, where the largest Indian 
        populations exist. The Extension Indian Reservation Program 
        must be expanded to its original authorization and design that 
        was 85 extension agents and a minimum budget of $6 million.

   Offices on Indian Reservations--In Section 2501 of the 1990 
        Farm Bill, Congress prohibited USDA agencies from paying the 
        cost of offices on Indian Reservations. Authority should be 
        restored to FSA and other agencies to cover the cost of offices 
        on Indian Reservations.

   The Indian Land Acquisition Program, which allows protection 
        of Tribal lands, should be expanded, and a similar program 
        established for other socially disadvantaged producers.

    Experience--Many new entry producers have strong experience in 
agriculture either as farmworkers or in the case of many refugee and 
immigrant farmers, experience as producers in other countries. While 
legal residents are eligible for loan programs, it is critical that FSA 
recognize farm and management experience gained as farmworkers or as 
producers in other countries as experience in qualifying for a loan.
    Moratorium on Accelerations and Foreclosures for Socially 
Disadvantaged Farmers and Ranchers--African American producers have 
experienced a stunning 97% loss of farms since 1920. Special strategies 
and emergency action to stem this loss, and to reduce land loss for 
American Indian and other socially disadvantaged producers. The most 
urgent need is an immediate moratorium to protect African American 
farmers and ranchers who now face imminent foreclosure following 
inadequate protection and outcomes of civil rights complaints and 
individual and class action lawsuits. This immediate stay should be 
applied as well to other filed discrimination cases and administrative 
complaints that are pending for all socially disadvantaged farmers and 
ranchers.
    In the farm bill, we propose that Congress declare a moratorium 
that provides an immediate stay on all accelerations and foreclosures 
against all socially disadvantaged farmers and ranchers and establish a 
review commission to be charged with reviewing all pending actions 
against socially disadvantaged farmers and ranchers. In addition, 
Congress should provide clear authority requiring the Secretary to 
waive interest and offsets, and to write off interest for all such 
cases during the review; and to forgive loans in cases where government 
action or inaction led to the foreclosure action.
    This Independent Socially Disadvantaged Farmer Foreclosure Review 
Commission should:

   Determine whether farm land foreclosed and accepted for 
        review by the commission complies with applicable laws or 
        regulations, and

   Determine if actions or inactions of the government led to 
        the foreclosure action.

   Review and improve upon the credibility and accuracy of the 
        USDA Farm Credit Foreclosure process and procedures,

   Report programmatic inefficiencies to the House and Senate 
        Agriculture Committee that include recommendations for legal 
        remedies to address wrongful foreclosures against African 
        American and any other socially disadvantaged producers.
    Culturally Appropriate Service Delivery--FSA should conduct 
outreach and deliver service in a manner that is culturally appropriate 
and language accessible for socially disadvantaged producers, and 
should retain adequately trained loan program staff with the linguistic 
and cultural background adequate to serve farmers in the region.
    Proposals for New Programs to Restore Equity--In order to begin the 
process of restoring access to socially disadvantaged producers who 
have been severely compromised in their ability to access land and 
operate viable operations, we propose a new credit program, and we 
encourage the Committee to support and endorse a more comprehensive 
approach to assist this population of farmers to engage with the full 
range of USDA programs and Services.
    New Low Documentation Loan Program for Socially Disadvantaged 
Farmers and Ranchers--Many socially disadvantaged producers with small-
scaled diversified operations could achieve real viability with more 
flexible financing tools. We recommend that this Committee establish a 
new socially disadvantaged farmers and rancher flexible loan program. 
We recommend that this be established at a maximum level of $50,000 per 
loan and that it be operated as a renewable line of credit that the 
producer may draw on again in future years when the balance is reduced 
below the limit.
    We recommend that the interest rates be below market rates, and 
that a quick approval low documentation process be used. The lower loan 
rate reduces risk to the agency, but allows the flexibility that many 
producers need. Authority should also be provided to make individual 
loans for members of cooperatives of groups of farmers in order to 
allow development of value added and cooperative businesses that can 
best be conducted beyond the level of the individual.
    Socially Disadvantaged Producers Risk Management and Market Access 
Initiative--We recommend that Congress establish a new comprehensive 
program to assure protections and market access that socially 
disadvantaged farmers need to attain financially viable operations that 
benefit also the poor rural communities where many of the live.
    We share this recommendation with this subcommittee because we 
believe a comprehensive approach to service for this population would 
reduce the risk and increase opportunities for socially disadvantaged 
farmers with respect to loan programs as well.
    This initiative is a comprehensive legislative approach designed 
to:

   preserve and build land ownership by Socially disadvantaged 
        farms and ranchers

   bring socially disadvantaged producers into USDA programs 
        and assure more accurate counting of this population in the 
        Census of Agriculture;

   contribute to rural communities, and

   to address the following challenges socially disadvantaged 
        farmers and rancher face:

     risk management and disaster protection,

     Secure access to land, credit and markets

     Facilitate transition from tobacco and peanuts and 
            other crops and to organic productions, value added,

     Improve record keeping, general farm and financial 
            management practices and meeting all regulatory 
            requirements

    Under this initiative, funding and technical assistance will be 
provided directly to farmers and ranchers, including beginning socially 
disadvantaged producers and farmworkers seeing to become farmers and 
ranchers, and who meet the criteria in order to carry out the 
applicable functions. Community Based organizations would receive 
direct support from RMA to supply the technical assistance
    Eligibility: A socially disadvantaged farmer or ranchers.

   Qualification level--The producers is awarded an Initial 
        payment of $5,000, half paid in advance. The producer must 
        within 1 year prepare IRS schedule F or a qualified substitute 
        for members of Indian Tribes. The producer must also sign up 
        for any crop insurance or NAP programs for which he or she is 
        qualified, and must register at the FSA office, and FSA must 
        provide his or her name to the National Agriculture Statistics 
        Service for inclusion in the next Census of Agriculture. A 
        qualified Technical Assistance Provider will receive $2,000 to 
        assist the farmer in preparing these documents and accessing 
        these services and in preparing a plan to apply for 
        participation in Tiers I, II and III. The producer is also 
        encouraged and may use technical assistance to be included in 
        the Minority Farm Registry or complete the Census of 
        Agriculture if applicable in that year.

      The producer must remain qualified at this level in order to 
        participate in Tiers I, II or III.

   Tier I Direct payments of $10,000 per year to complete at 
        least three of the following:

     A farm and home plan,

     Applications for any USDA program for which he or she 
            is eligible

     An estate plan,

     A risk management plan, including accessing family 
            health insurance

     A conservation plan

     Land acquisition

     Disaster protection or mitigation

     Plan to transition to another crop or crops

     A qualified Technical Assistance Provider will receive 
            $3,000 to assist the farmer in accessing these services

   Tier II--Direct payment of $25,000 per year to complete at 
        least three of the following:

     Meet standards for GAP, Organic certification

     Make a marketing plan

     Access liability or other expanded insurance, 
            including revenue insurance

     Access farmers['] markets or improved marketing 
            contracts

     Make a plan to meet other regulatory requirements, 
            including labor and pesticide health and safety standards, 
            Livestock and Animal ID

     Mentor another farmer

     Qualifies for SARE

     Irrigation and other production assistance

     Waste management

     A qualified Technical Assistance Provider will receive 
            $4,000 to assist the farmer in preparing these documents 
            and accessing these services

   Tier III--Direct payment of $45,000

     Cooperative development and the development of value-
            added enterprises.

     Infrastructure development

     Enter nutrition programs such as school lunch, WIC, 
            farmers['] market, senior nutrition, etc.

     Energy

     Rural Development

     A qualified Technical Assistance Provider will receive 
            $5,000 to assist the farmer in preparing these documents 
            and accessing these services
Additional Provisions

   Make this a program under the commodities title and locate 
        in RMA Outreach and Civil rights office.

   Community-based organizations would provide technical 
        assistance.

   Provide Funds for additional staff for RMA regional offices 
        and at headquarters.

   Authorize and Support the Small Farms Emphasis Program to 
        work across agencies at USDA to assure coordination of services 
        for socially disadvantaged farmers under this program.

   Include automatic entry into some USDA programs for 
        completion of certain tiers.
Conclusion
    We appreciate this opportunity to share our insights and 
recommendations with you. We are most willing to answer now or in the 
future any questions you may have or to offer any assistance we are 
able to the Committee or to the Secretary to make USDA-Farm Service 
Agency Credit programs and services more equitable.
Appendix A--Samples of USDA 10708 National Program Participations 
        Reports

----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Program Participation Report
Program National Summary
Fiscal Year: 2003
Farm Service Agency
Peanut Quota Buyout Program
----------------------------------------------------------------------------------------------------------------
                                Male
                               Female
                                     Unknown
----------------------------------------------------------------------------------------------------------------
                      Hispanic or  Not Hispanic  Hispanic or      Not      Hispanic or      Not      Undiscloded
                        Latino       or Latino      Latino    Hispanic or     Latino    Hispanic or   Ethnicity
                                                                 Latino                    Latino
----------------------------------------------------------------------------------------------------------------
                     Participatio  Participatio  Participati  Participati  Participati  Participati  Participati
                      n Indicator   n Indicator       on           on           on           on           on
                                                  Indicator    Indicator    Indicator    Indicator    Indicator
----------------------------------------------------------------------------------------------------------------
             White            <3%         46.3%          <3%        32.8%          <3%          <3%
             Black            <3%          8.4%          <3%         9.5%           0%          <3%
             AI/AN             0%           <3%           0%          <3%           0%          <3%
             Asian             0%           <3%           0%          <3%           0%          <3%
               HPI            <3%           <3%           0%          <3%           0%          <3%
             Other            <3%           <3%          <3%          <3%          <3%          <3%
             Multi             0%           <3%           0%          <3%           0%          <3%
           Unclass                                                                                            0%
                    --------------------------------------------------------------------------------------------
  Total............           <3%         54.1%          <3%        42.7%          <3%          <3%           0%
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Program Participation Report
Program National Summary
Fiscal Year: 2003
Farm Service Agency
Guaranteed Farm Operating Loan Program
----------------------------------------------------------------------------------------------------------------
                                Male
                               Female
                                     Unknown
----------------------------------------------------------------------------------------------------------------
                      Hispanic or  Not Hispanic  Hispanic or      Not      Hispanic or      Not      Undiscloded
                        Latino       or Latino      Latino    Hispanic or     Latino    Hispanic or   Ethnicity
                                                                 Latino                    Latino
----------------------------------------------------------------------------------------------------------------
                     Participatio  Participatio  Participati  Participati  Participati  Participati  Participati
                      n Indicator   n Indicator       on           on           on           on           on
                                                  Indicator    Indicator    Indicator    Indicator    Indicator
----------------------------------------------------------------------------------------------------------------
             White            <3%         40.9%          <3%          <3%          <3%        54.7%
             Black            <3%           <3%           0%          <3%          <3%          <3%
             AI/AN            <3%           <3%           0%          <3%           0%          <3%
             Asian            <3%           <3%           0%          <3%           0%          <3%
               HPI             0%           <3%           0%          <3%           0%          <3%
             Other            <3%            0%          <3%           0%          <3%          <3%
             Multi             0%            0%           0%           0%           0%           0%
           Unclass                                                                                            0%
                    --------------------------------------------------------------------------------------------
  Total............           <3%         41.8%          <3%          <3%          <3%        55.8%           0%
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Program Participation Report
Program National Summary
Fiscal Year: 2003
Farm Service Agency
Non-Recourse Marketing Assistance Loan and Loan Deficiency Program
----------------------------------------------------------------------------------------------------------------
                                Male
                               Female
                                     Unknown
----------------------------------------------------------------------------------------------------------------
                      Hispanic or  Not Hispanic  Hispanic or      Not      Hispanic or      Not      Undiscloded
                        Latino       or Latino      Latino    Hispanic or     Latino    Hispanic or   Ethnicity
                                                                 Latino                    Latino
----------------------------------------------------------------------------------------------------------------
                     Participatio  Participatio  Participati  Participati  Participati  Participati  Participati
                      n Indicator   n Indicator       on           on           on           on           on
                                                  Indicator    Indicator    Indicator    Indicator    Indicator
----------------------------------------------------------------------------------------------------------------
             White            <3%         71.2%          <3%        24.9%          <3%          <3%
             Black            <3%           <3%           0%          <3%           0%          <3%
             AI/AN            <3%           <3%          <3%          <3%           0%          <3%
             Asian             0%           <3%          <3%          <3%           0%          <3%
               HPI             0%           <3%           0%          <3%           0%          <3%
             Other            <3%           <3%          <3%          <3%          <3%          <3%
             Multi             0%           <3%           0%          <3%           0%          <3%
           Unclass                                                                                            0%
                    --------------------------------------------------------------------------------------------
  Total............           <3%         72.3%          <3%        25.8%          <3%          <3%           0%
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Program Participation Report
Program National Summary
Fiscal Year: 2003
Farm Service Agency
Conservation Reserve Program
----------------------------------------------------------------------------------------------------------------
                                Male
                               Female
                                     Unknown
----------------------------------------------------------------------------------------------------------------
                      Hispanic or  Not Hispanic  Hispanic or      Not      Hispanic or      Not      Undiscloded
                        Latino       or Latino      Latino    Hispanic or     Latino    Hispanic or   Ethnicity
                                                                 Latino                    Latino
----------------------------------------------------------------------------------------------------------------
                     Participatio  Participatio  Participati  Participati  Participati  Participati  Participati
                      n Indicator   n Indicator       on           on           on           on           on
                                                  Indicator    Indicator    Indicator    Indicator    Indicator
----------------------------------------------------------------------------------------------------------------
             White            <3%         68.9%          <3%        27.6%          <3%          <3%
             Black             0%           <3%           0%          <3%           0%          <3%
             AI/AN            <3%           <3%          <3%          <3%           0%          <3%
             Asian            <3%           <3%           0%          <3%           0%          <3%
               HPI            <3%           <3%          <3%          <3%           0%          <3%
             Other            <3%           <3%          <3%          <3%           0%          <3%
             Multi             0%           <3%           0%          <3%           0%          <3%
           Unclass                                                                                            0%
                    --------------------------------------------------------------------------------------------
  Total............           <3%         69.9%          <3%        28.2%          <3%          <3%           0%
----------------------------------------------------------------------------------------------------------------

Appendix B
Information Required From Non-governmental Witnesses
Biographical Sketch
    John Zippert,
    Federation of Southern Cooperatives/Land Assistance Fund,
    [Redacted],
    Epes, Alabama
    Email: [Redacted] Phone: [Redacted]

    Mr. John Zippert, Director of Program Operations of the Federation 
of Southern Cooperatives/Land Assistance Fund is a community organizer 
and a tireless advocate of economic and rural development for Black 
farmers. He has a BA degree in history from the City College of New 
York and has participated in numerous training sessions and courses to 
enhance his skills in rural development.
    The Federation of Southern Cooperatives/Land Assistance Fund 
currently has over 70 active cooperative member groups, themselves with 
a membership of more than 20,000 families working together across ten 
southern states, with a concentration in Mississippi, Alabama, Georgia 
and South Carolina.
    John has held a number of positions in the Federation of Southern 
Cooperative including co-founder and field leader. In his current role 
as Director of Program Operations, he is assisting in the development 
of programs designed to save, protect and expand the landholdings of 
Black family farmers in the South. He also works to develop, advocate 
and support public policies to benefit the membership of Black and 
other family farmers and low-income rural communities. He has fought 
for economic justice for more than 40 years. John has worked in 
distressed communities in cooperative and credit union development to 
provide technical assistance and training to individuals from low-
income rural communities who have determined a need for low cost, 
community controlled consumer credit.
    The Federation has participated in policy and advocacy and 
organized in rural communities to build a base for change. With hard 
work, collaboration with many other groups, and a consistent program of 
community and civic education, the Federation was able to get portions 
of this advocacy agenda incorporated in national farm legislation.
    On October 10, 2002, John testified before the U.S. House of 
Representative's Agriculture Committee on issues pertaining to civil 
rights programs at the U.S. Department of Agriculture (USDA). He told 
Congress that ``injunctive relief provided in the settlement has not 
been clearly translated in Federal regulations and actual practice at 
county level FSA offices. A number of farmers,'' he said, ``have 
reported to me that they were laughed at, ridiculed, or told `no such 
benefits existed', when they attempted to secure this most important 
forward-looking benefit of the settlement of the law suit.'' One of the 
benefits for class members includes priority consideration in USDA 
offices for receiving assistance in loan packaging. The response at FSA 
offices is part of the general pattern of continuing discrimination and 
retaliation against Black farmers.
    Zippert has served on the boards of many national, regional, state 
and local organizations. He is currently the elected chair of the Board 
of the Rural Coalition/Coalicion Rural. He has also served on the 
boards of Association for Community Based Education, Rural Development 
Leadership Network, Alabama Black Belt Action Commission, Alabama 
Council on Human Relations, Alabama Organizing Project, Alabama New 
South Coalition, Greene County Industrial Board, Greene County Hospital 
and Nursing Home and the Greene-Sumter Enterprise Community to name a 
few. John and his wife Carol are co-publishers and editors of the 
Greene County Democrat, the weekly newspaper in Eutaw, Alabama since 
1984. The Zipperts have three children, Rachel, Alexandria and Simon 
and nine grandchildren.
[Congressional Letters and Testimony 4]
Statement of John Zippert on Behalf of the Federation of Southern 
        Cooperatives/Land Assistance Fund and the Rural Coalition/
        Coalicion Rural to the U.S. House of Representatives, Committee 
        on Agriculture, Subcommittee on Departmental Operations
Washington, D.C.
September 25, 2002

    My name is John Zippert. I am Program Director of the Federation of 
Southern Cooperatives/Land Assistance Fund and Chairperson of the Rural 
Coalition. I personally have worked on promoting equity in poor rural 
communities for more than 35 years, starting in St. Landry Parish 
Louisiana with the Congress of Racial Equality. I have worked with the 
organizations I represent today for many years.
    I have personally assisted over 650 farmers in Alabama in the 
preparation of claims and other documents in response to the Pigford v. 
Glickman Consent Decree. I have done this work in a paralegal capacity, 
under the auspices of the Chestnut, Sanders and Sanders law firm in 
Selma, one of the law firms connected to the class counsel in the 
lawsuit.
    I assisted over 200 farmers to file initial claims in the case; I 
assisted another 200 to file for reconsiderations with the Monitor, 
when their initial claim was rejected by the adjudicators; and I have 
helped 350 farmers to file late claims and additional documentation on 
late claims.
    According to statistics supplied by the court monitor, of the five 
states with the highest number of responses, Alabama has the highest 
rates of approval at 67%.
Relevant Experience of Our Organizations to Address the Questions in 
        this Hearing
    We appreciate this opportunity to speak candidly to you on behalf 
of both of these organizations to address the question of ``Resolving 
and Removing the Need for Litigation Against USDA.'' The organizations 
I represent are uniquely qualified to answer this question. 
Collaboratively and for many years, these groups have served as the 
primary and often only source of technical assistance and support to a 
significant proportion of the minority farmers in this nation.
    The Federation of Southern Cooperatives/Land Assistance Fund has 
for more than 30 years worked with African-American farmers and 
landowners in some of the poorest counties in the nation. Our 
membership includes over 75 cooperatives and credit unions. Through our 
outreach program, we provide land and agriculture-related assistance to 
over 12,000 rural families.
    The Federation implements its various programs throughout the 
southeast but is concentrated primarily in Alabama, Mississippi, South 
Carolina, Georgia and north Florida. Over the years, we have worked one 
on one with minority farmers and their cooperatives to develop new 
enterprises. A great deal of our work has had to be focused on saving 
Black-owned farms and assisting their owners to fairly access farm 
credit and other farm programs and services. We have assisted hundreds 
of farmers in seeking redress for discrimination and in responding to 
the class action settlement in Pigford v. Glickman. Of necessity, we 
have also sought legal and legislative remedies to assure fair and 
equitable service to minority producers, including the Minority Farmers 
Rights Act, which passed as part of the 1990 Farm Bill.
    The Rural Coalition/Coalicion Rural, of which the Federation is a 
founding member, is an alliance of over 80 culturally and regionally 
diverse rural community-based organizational in the U.S. and Mexico. We 
have served minority and other limited resource producers for almost a 
quarter century. The members of our Coalition include some of the most 
diverse and experienced minority farm organizations including the 
Intertribal Agriculture Council, the Rural Advancement Fund, which has 
worked with African American producers for more than 50 years; the 
North Carolina Association of Black Lawyers Land Loss Prevention 
Program, the Concerned Citizens of Tillery, as well as Rural Community 
Development Resources in Yakima Washington, and the Hmong American 
Community in Salinas, CA, who serve the growing population of new 
Latino and Asian-American farmers.
    In recent years, we have worked actively to develop new methods 
with our members to help USDA fill service gaps. In 1996 and 1997, in 
collaboration with USDA, we trained our members on the roles and 
election procedures for FSA county committees. With FSA support, we 
held two outreach trainings to help our members better understand the 
purposes and eligibility requirements of a wide range of USDA programs.
    Collectively, the Federation, and the Rural Coalition and its 
members and allies, have assisted thousands of farmers with the 
intricacies of their dealings with USDA. We have attempted on many 
occasions to see that USDA was held accountable for its discriminatory 
practices that we have observed, and to seek structural change both 
administratively and in policy. We have written letters and proposed 
policy changes, including an entire Minority Farmers Rights Act, 
portions of which were instituted into law in the 1990 Farm Bill.
    In the past several years, we have supplied reams of documents, 
analysis and testimony to the Civil Rights Action Team, the National 
Small Farms Commission, the U.S. Congress and the U.S. Civil Rights 
Commission. A half dozen of us served on the National Small Farms 
Commission, and we have also participated on other committees and in 
many sessions with the Secretary and the staff of the Department.
    Our collaborative legal and legislative work included the 1987 
Agriculture Credit Act, the 1990 Farm Bill, the 1994 Agriculture 
Reorganization Act, and the Waiver of the Statute of Limitations which 
removed a critical barrier to the settlement of the longstanding class 
action lawsuits.
    We have also worked with you on the most recent 2002 Farm Bill. We 
appreciate the support the Members of this Committee who helped assure 
that the first of the structural changes instituted to prevent future 
discrimination were passed in that bill.
Introduction to Our Findings
    In my years of work with the Federation of Southern Cooperatives/
Land Assistance Fund, I have never met a Black farmer who was not 
discriminated against. I believe the same is true for most of the 
diverse group of African-American, Latino, American Indian, Asian and 
female farmers represented within the Rural Coalition.
    In this statement, I will first address issues surrounding the 
settlement of the Pigford v. Glickman class action lawsuit. I will then 
turn my attention towards the essential and fundamental changes USDA 
must make in order to prevent the actions that necessitated legal 
action in the first place.
    We want to express the full willingness of our organizations to 
cooperate with this Committee and the U.S. Congress to root out 
discrimination and change unjust structures at USDA. We want to help 
bring about the day when African American and other minority farmers 
can turn their attention to growing crops and revitalizing rural 
communities instead of filing complaints and lawsuits to secure the 
equitable service to which they are entitled in the first place.
    It is time to close this chapter of discrimination in farm programs 
and move to a new one that supplies justice and equity that are our 
rights in a democratic society.
I. Resolving Litigation and Redressing Wrongs: Pigford v. Glickman
    USDA has admitted past wrongs in its practices. The court has ruled 
on the Pigford v. Glickman case. The new Secretary of Agriculture 
should instruct Farm Services Agency in particular to stop denying that 
they did something wrong, and to cease interfering in the 
implementation of the Consent Decree. She should also instruct FSA and 
particularly the Office of General Counsel to stop obstructing justice 
in the other farmer and employee class action lawsuits now facing the 
department.
    At the present time, the injustice facing Black farmers is being 
compounded at the taxpayers expense by allowing USDA employees, and 
particularly FSA county employees any role in responding to the court 
in the Pigford case. We have also learned that USDA employees are also 
assisting in appealing decisions of the arbitrator that are favorable 
to the farmers. We find it abhorrent and a misuse of the public trust 
that those reviewing cases and answering the courts are the same people 
who caused the problems in the first place. Congress should consider it 
retaliation and a violation of the ``zero-tolerance'' policy that FSA 
county employees have any role at all in Pigford response, and order 
this interference to cease immediately.
    After the court ruled, the agencies responsible are still using our 
taxpayer money to fight against and deny this discrimination, saying it 
did not happen, and even exerting pressure to deny rulings made in 
favor of the farmers. Extremely high paid individuals continue to argue 
against cases they have already lost, actively subverting the entire 
justice process at taxpayer expense. In our interactions with FSA staff 
at all levels--national, state and count--we continue to encounter 
blatant denial that anyone ever did anything wrong.
    The fact is that discrimination did happen, both in credit programs 
and in the old ASCS programs, where farmers rarely gained enough access 
to the programs to generate complaints. Unless that reality is accepted 
and addressed, it is highly unlikely that forward progress can be made 
in creating a system that serves all farmers fairly.
Pigford v. Glickman Concerns
    As of August 29, 2002, according to a report on the USDA website, 
there were a total of 22,829 claims filed, of these 21,583 were deemed 
eligible claims filed in the case. Of these 181 are Tract B and 21,358 
are in Tract A. As more late claims are qualified and other claims are 
re-evaluated, there may be additional claims added to the totals.
    There were 69,265 late claims filed by the September 15, 2000 
deadline. To date 58,747 late claims have been rejected and only 1,350 
(1.9%) have been accepted.
    Of the 21,358 eligible Tract A claims that have been adjudicated, 
12,865 (60.2%) have been approved for payment; and 8,493 (39.8%) have 
been rejected. 12, 597 adjudicated claims have been paid totaling 
$629,850,000; 222 claims we paid for non-credit benefits only; these 
claimants, although discriminated against received only $3,000 each.
    An addition $17 million in loans, directly from FSA or other 
Federal agencies, were canceled.
    Of the more than 8,000 claims that were rejected, 6,000 have 
requested a reconsideration by the Court appointed Monitor in the case. 
The Monitor has reviewed a quarter of these and ruled for a 
reconsideration for the farmers in 55% of these cases.
    We have a number of grave concerns with the process in this Black 
farmer class action lawsuit, that Congress can help illuminate and 
correct, among them are:

   The process in this settlement has been too complicated and 
        difficult for farmers to follow and comply with, which has 
        reduced the full number of people joining the class

   There was insufficient outreach to Black farmers to explain 
        the settlement, during the original sign-up period, which 
        resulted in many eligible farmers being eliminated from the 
        class; the 69,265 late claims filed are an indication of this 
        problem. At the Federation, we are still receiving inquiries 
        from farmers, who felt that were left out of the case.

   The claim denial rate of almost 40% has been inordinately 
        high and does not reflect the actual record of discrimination 
        by the USDA. Many farmers are being denied based on 
        recommendations and records of USDA ``task-force employees'' 
        who were involved in the original record of discrimination and 
        should not be involved in the process. We suggest Congress 
        direct USDA and USDOJ to pay all eligible claims in this case, 
        including those denied by adjudicators based on questionable 
        information from the government.

   The process of paying the farmers is entirely too slow. This 
        case was settled in April 1999 and farmers were promised and 
        expected payments in time for the 1999 crop season. Most 
        farmers were not paid in time for the 2000 crop season. Now 
        three crop seasons later, many farmers who were denied and have 
        filed for reconsideration; and many of the late claims have not 
        yet received a determination on their claim, as we head into 
        the fourth crop season since the settlement.

   The approval of less than two percent (1.9%) of late claims 
        by Michael Lewis, the Court appointed Chief Arbitrator in the 
        case, should be reviewed by Congress. Lewis has failed to 
        inform farmers of the specific conditions and circumstances he 
        is accepting to find that people had ``extraordinary 
        circumstances beyond their control'' to allow him to approve 
        late claims. Initially, he rejected almost all the late claims 
        with no basis for appeal. Subsequently, at the urging of the 
        Court, he set up a review process where late claim farmers can 
        submit additional documentation to explain and justify their 
        late claims. This again is a long involved process, with many 
        delays and no clear due process or procedures. Congress should 
        take a close look at this process to insure its fairness and 
        equity to farmers.

   The claims of some Black farmers who were discriminated 
        against for ``program benefits'', i.e., conservation benefits, 
        disaster livestock feed, adverse acreage decisions; and not 
        credit claims, have now been paid at a compensation of only 
        $3,000. This amount is not fair. These claimants have a finding 
        of discrimination by the independent adjudicators and they 
        should be paid the full $50,000 settlement amount.

   The Track B process has been fraught with delays, technical 
        problems and procedural difficulties. Only 54 of 182 of these 
        cases have been adjudicated to date. Where the farmers have 
        prevailed the government is challenging the arbitrators' 
        decisions and ultimate payments to farmers will be years away.

   There remain farmers who did not get full debt relief under 
        the settlement, even though a previous act of discrimination 
        may impede their ability to pay subsequent debt. They should 
        receive full payment.

    Finally we note that injunctive relief provided in the settlement 
has not been clearly translated in Federal regulations and actual 
practice at county level FSA offices. A number of farmers have reported 
to me that ``they were laughed at'', ridiculed, or told ``no such 
benefit existed'' when they attempted to secure this most important 
forward-looking benefit of the settlement at the local FSA office.
    The Federation is working with a large group of these farmers, who 
are seeking to exercise their injunctive relief benefits and not 
receiving support from the government's representatives at the local 
level. This is also part of a general pattern of continuing 
discrimination and retaliation against Black farmers who participated 
in the lawsuit. Moreover, the injunctive relief requested and provided 
fails to address the many changes USDA still needs to make to prevent 
future problems for recurring.
II. Removing the Need for Litigation Against USDA
    The United States Department of Agriculture, and in particular, the 
Farm Services Agency and its predecessor agencies, have been 
responsible for discrimination and neglect that to date has cost the 
U.S. taxpayers more than $700 million. Other class action lawsuits by 
the Hispanic, Native American and Women producers, in addition to many 
more employee lawsuits, will cost the taxpayer still more.
    Instead of acting to remove the vestiges of discrimination and 
prevent it from happening again, USDA has chosen to deny, in court and 
in settlements, that it has discriminated. The fact is that the 
Department and its agencies continue to discriminate. In the next 
section of my testimony, I will discuss what the department could do if 
it truly wanted to assure fair service to farmers.
    In the 2002 Farm Bill, with the support of the House and Senate 
Agriculture Committees, and on the full House and Senate, Congress took 
additional steps to begin making the structural changes that are 
necessary. We worked closely with you on these changes:

  b A new post for an Assistant Secretary for Civil Rights, who will 
        report directly to the Secretary, was created, although it has 
        not yet been established or filled.

  b The authority for the Minority Farm Outreach and Technical 
        Assistance Program was expanded to allow more coordination 
        among agencies, and eligible participants were more clearly 
        defined. The funding authority was expanded from $10 million to 
        $25 million.

  b USDA is required to publicly report to the county level the 
        participate rate of producers in every program serving farmers. 
        These participation rates will be detailed by race, ethnicity 
        and gender. The Secretary must report changes in participation 
        to Congress after each Census of Agriculture.

  b The Secretary is required to establish uniform election procedures 
        for FSA County Committee elections and to publicly report 
        participation data and results by race, ethnicity and gender. 
        Organizations representing minority producers are authorized to 
        nominate eligible producers to stand for elections. Ballot 
        counting must be open to the public and ballots must be opened 
        and counted at that time only.

  b Budget authority for minority serving institutions was increased, 
        as was authority for the Extension Indian Reservation Program.

  b FSA Loan Eligibility was restored to producers who received debt 
        forgiveness because of a natural disaster or emergency, and any 
        action provided as part of a resolution of a discrimination 
        complaint was excluded from the definition of debt forgiveness.

    We urge Congress to fulfill its oversight authority by assuring all 
of these provisions are quickly implemented and the results regularly 
reviewed. These measures alone, however, are insufficient to root out 
discrimination and prevent future lawsuits. We also urge you to take 
notice of additional problems and recommendations offered today, 
including those noted below.
A. Invest in Collaborative Outreach
    By the time all the lawsuits are settled, the cost to taxpayers may 
exceed $1 billion. These settlement costs do not include the many 
losses to African American, Asian, Hispanic and American Indian 
producers who lost their lands and livelihood unjustly with no 
compensation. For example, in 1997, our Rural Coalition Board member 
Greg Smitman, now the former Executive Director of the Intertribal 
Agriculture Council, detailed to the Civil Rights Action team how farm 
foreclosures accounted for the greatest loss of land from Indian 
Reservations. Nor do these estimates include the cost of the lost 
opportunity for hundreds of people of color who seek access to the 
land, but who for many reasons are excluded and denied.
    For many years, we in the minority farm community have together 
sought relative minor investments, totaling in the tens of millions of 
dollars, to secure effective outreach and equitable access to programs. 
Had Congress provided since the 1990 Farm Bill the full $10 million 
then authorized each year for the Section 2501 Minority Farm Outreach 
and Technical Assistance Program, we would now have more farmers on the 
land. This program and others that serve minority producers remain an 
afterthought rather than a fundamental priority.
    We urge Congress and especially this Committee to invest in equity 
and to make the following programs a priority:
    The Minority Farm Registry--An investment of around $1 million a 
year would allow full implementation of the minority farm registry, 
which I will discuss further later in this statement. The Registry, as 
recommended in the Civil Rights Action Team Report as well as the 
report of the USDA Commission on Small Farms, has been approved by the 
Office of Management and Budget. Its implementation remains bogged down 
in budgetary negotiations in USDA. This impasse should be solved 
immediately.
    The Extension Indian Reservation Program and Consolidated USDA 
Offices on Indian Reservations--Cooperative Extension serves virtually 
all counties in the United States, including urban counties. However, 
Indian Reservations have long been excluded unless they pay for 
services. In 1990, the Extension Indian Reservation Program was 
established, and funds provided to extend Extension Services to some 
Indian Reservations. In the 2002 Farm Bill, the spending limit on this 
program was removed. However, a serious inequity will remain until this 
program is made mandatory and until services are extended to all Indian 
Reservations that request services. Likewise, USDA agencies cover the 
cost of running their offices in virtually all farm counties in the 
United States. But authorization language passed in 1990 for 
consolidated offices on Indian Reservations requires the Tribe to pay 
for these offices. This barrier should be removed, and USDA should 
cover the costs of these offices.
    Equitable Funding for Minority Serving Educational Institutions--We 
have supported over the years many initiatives, including one awaiting 
floor action in the House of Representatives, to make more equitable 
and sufficient the support for minority serving institutions, included 
the 1890 Universities, the 194 Indian Tribal Colleges and Hispanic 
Serving Institutions. Adequate funding for these institutions is 
essential, and a matter of justice. Once again, the additional $20-$30 
million required is a small investment compared to the costs of 
litigation and continued injustice.
    Minority Farm Outreach and Technical Assistance--(See Section E for 
a fuller discussion of the accomplishments of this program) The new 
farm bill has gone into effect, with new programs and program 
requirements. Without technical assistance, minority producers will 
once again be excluded from the benefits of these programs. At a time 
the Minority Farm Outreach and Technical Assistance is more necessary 
than ever, the Administration has yet again relocated the program. The 
$3 million Congress provided for FY 2002 has not been expended, and 
existing contracts for outreach will expire at the end of this month.
    The Administration has expressed some willingness to move towards 3 
year contracts under this grant round. However, moving towards a full 
appropriation is essential to assure that this change does not 
eliminate for several years some ongoing programs. More funding is also 
needed for organizations who for many years have been working with 
minority farmers but who have not yet received funds to provided 
services similar to those available through current grantees. Likewise, 
there is an urgent need for more funding to existing grantees that are 
now unable to serve all the farmers in their region.
    The Administration has been talking about combining FY 2002 and FY 
2003 funds to assure a larger funding pool to make the transition to 3 
year grants, which in each round will be funded in a single year 
appropriation.
    However, we now face an emergency situation. The FY 2003 
Agriculture Appropriation remains stalled, and may not see action 
before Congress recesses or adjourns. At present, the House Agriculture 
Appropriations Committee provided an additional $5 million to raise FY 
2003 expenditures to some $8 million for the coming fiscal year. An 
amendment to supply a similar increase in the Senate is being drafted 
whenever that bill comes to the floor.
    This Committee should lead efforts in Congress to invest in the 
handful of programs that can lay the groundwork for making USDA 
programs and services more equitable. For less than $50 million in new 
funds, Congress could accomplish all of the recommendations listed 
below.
    We recommend the following action if the FY 2003 Appropriation is 
not passed before Congress recesses for the elections:

  (1)  Upon passage of whatever resolution that continues the operation 
            of the USDA, USDA be urged to take the current level of $3 
            million in FY 2003 funds and combine them with the $3 
            million carried over from FY 2002. These funds should be 
            used to continue existing Minority Farm Outreach Contracts 
            for the coming year.

  (2)  This Committee should support a floor amendment to the FY 2003 
            Agriculture Appropriations Bill when it is considered that 
            would increase total funding for FY 2003 to $25 million. 
            With the funds supplied beyond those included in any 
            continuing resolution, a second grant round for the 
            Minority Farm Outreach and Technical Assistance Program 
            should be completed before the end of FY 2003.

  (3)  The Committee should also support the floor amendment now being 
            drafted to expand funding for the 1890 Universities, the 
            1994 Land-Grant College, and eligible Hispanic Serving 
            Institutions by $5 million each and call upon the Senate to 
            provide similar action.

  (4)  The Committee should further support additional funding of at 
            least $5 million for the Extension Indian Reservation 
            Program in the coming year.

    Additional Recommendations:

  (5)  In future years, this Committee should regularly request and 
            strongly that the Appropriations Committee supply the full 
            authorized level of $25 million. Alternately, the Committee 
            should make the program and the funds mandatory at a level 
            of at least $25 million, and a regular and critical 
            priority among farm programs.

  (6)  The provision in Section 2501 of the 1990 Farm Bill requiring 
            Tribes to provide office space for Consolidated Offices on 
            Indian Reservations should be removed. USDA agencies should 
            pay for these offices.

  (7)  Extension Indian Reservation Programs should be provided for all 
            Tribes who request them. The Committee should support 
            adequate funding to meet al[l] needs, or make the program 
            mandatory.

  (8)  This Committee should assure that adequate funds are allocated 
            for the implementation of the Minority Farm Registry.
B. Make Farm Programs More Equitable and Assure They Reach and Meet the 
        Needs of Minority and Other Small Farmers.
    Before the implementation of the new farm bill, approximately 75% 
of farm program benefits went to 10% of largest and most prosperous 
farmers. The same was true of bailout funds and AMTA payments. However, 
support for 10 acre intensive vegetable farmers who were equally 
devastated should be equitable. Most such farmers have not, and in this 
year will not, receive disaster payments. Crop insurance has also 
failed to serve the ongoing and disaster needs of small-scale 
producers, including the vast majority of minority farmers.
    In recent years, we have often heard FSA farm program employees 
lament the way lawsuits involving credit programs were unfairly giving 
a negative view of farm and commodity programs. We maintain there was 
nothing unfair about a perception that farmers were also unfairly 
treated and excluded from commodity programs.
    A legislative anomaly that waived the right of sovereign immunity 
only under the Equal Credit Opportunity Act restricted the ability of 
farmers to seek damages from USDA in other than credit programs. As the 
1992 Program Participation data in the table below illustrates, 
minority farmers had very low participation rates in commodity and 
other farm programs. Their exclusion from these programs certainly 
reduced their ability to secure credit and maintain viable operations.
    Under the 1992 Corn Loan program, 99.88% of participants were 
white. Only in the cotton program, where 4.64% of the participants were 
African American, was participation even close to the proportion of 
Black farmers. However, most participants in the cotton program are 
concentrated in the Southeast region, where, according to 1992 ASCS 
statistics, 7.52% percent of producers were African American.
    In the Conservation Reserve Program, where counties had limited 
amounts of funds to allocate among producers, participants in 1992 were 
99.3% white. Of 22,368 participants, 96 were African American, 30 
Hispanic and 24 American Indian. In Oklahoma, the state with the 
largest number of American Indian producers, there were only three 
American Indian participants in the 1992 CRP program.

                                  1992 Program Participants, Selected Programs
                               Agriculture Conservation and Stabilization Service
                          (Compiled from data provided by ASCS to the Rural Coalition)
----------------------------------------------------------------------------------------------------------------
                                                          Asian Amer./   Amer. Ind./      Total
     Year           White         Black       Hispanic    Pacific Isl.    AK Native     Minority      Total All
----------------------------------------------------------------------------------------------------------------
                                                 Total Producers
----------------------------------------------------------------------------------------------------------------
           #       7,392,430       202,969        64,893         7,478        82,534       357,874     7,750,304
           %          95.38%         2.62%         0.84%         0.10%         1.06%         4.62%
----------------------------------------------------------------------------------------------------------------
                                          Conservation Reserve Program
----------------------------------------------------------------------------------------------------------------
     Midwest          11,964            10             1             2             5            18        11,982
   Northeast             224            --            --            --            --            --           224
   Northwest           3,940            --             2             2            16            20         3,960
   Southeast           3,279            81             1             2            --            84         3,363
   Southwest           2,705             5            26            --             3            34         2,739
           #          22,112            96            30             6            24           156        22,268
           %          99.30%         0.43%         0.13%         0.03%         0.11%         0.70%
----------------------------------------------------------------------------------------------------------------
                                     Emergency Conservation Reserve Program
----------------------------------------------------------------------------------------------------------------
     Midwest           1,549            --            --            --            --            --         1,549
   Northeast              52            --             1             1            --             2            54
   Northwest             920            --             1             1            19            21           941
   Southeast             496            21           157            --            --           178           674
   Southwest             641             5            18             8             1            32           673
           #           3,658            26           177            10            20           233         3,891
           %          94.01%         0.67%         4.55%         0.26%         0.51%         5.99%
----------------------------------------------------------------------------------------------------------------
                                            Adjusted for Puerto Rico
----------------------------------------------------------------------------------------------------------------
 Puerto Rico                                                       155
----------------------------------------------------------------------------------------------------------------
                                                      Other
----------------------------------------------------------------------------------------------------------------
           #           3,658            26            22            10            20            78         3,736
           %          97.91%         0.70%         0.59%         0.27%         0.54%         2.09%
----------------------------------------------------------------------------------------------------------------
                                          Corn Farm and Warehouse Loan
                                                Selected Regions
----------------------------------------------------------------------------------------------------------------
   Northwest          25,833            --             1             1             5             7        25,840
   Southeast           3,600            97            --            --             5           102         3,702
   Southwest           2,695            --             4            --             2             6         2,701
----------------------------------------------------------------------------------------------------------------
                                           Total Program (All Regions)
----------------------------------------------------------------------------------------------------------------
           #         106,411           107             6             2            17           132       106,573
           %          99.88%         0.10%         0.01%         0.00%         0.02%         0.12%
----------------------------------------------------------------------------------------------------------------
                                   ASCS Upland Cotton Farm and Warehouse Loan
                                                  Total Program
----------------------------------------------------------------------------------------------------------------
           #          32,306         1,576            89             8             8         1,681        33,987
           %          95.05%         4.64%         0.26%         0.02%         0.02%         4.95%
----------------------------------------------------------------------------------------------------------------

    The statistics in the table above were provided to the Rural 
Coalition by then FSA Administrator Grant Buntrock. He routinely 
provided these numbers with complete breakdowns by state and region 
when we requested them. I am providing an expanded version of these 
tables to you for the record. In them, you can also find state by state 
breakdowns. However, since 1997, USDA has not supplied any data in any 
usable form to help us monitor the need for outreach and the results.
    The new farm bill provisions on Transparency and Accountability 
would make the release of such data, down to the county level, routine. 
It is our hope that USDA websites could include this data for every 
county in the nation, for only at that level is it truly meaningful. In 
the table above, for example, the relatively large participation of 
Puerto Rican farmers in the 1992 CRP program is large enough to affect 
the national level data on minority farm participation. However, 
participation rates for other minority farmers remain very low when the 
figures are adjusted.
    This is not to say that better participation in Puerto Rico is not 
important. It is to say that equitable participation everywhere is 
essential, and it will take state and county level data to make sure 
that is happening in Alabama and Mississippi and Georgia, and Montana 
and Texas and California, etc.
    The low participation of minority farmers in the 1992 CRP program 
underscores the point that is raised in the testimony of Mr. Burkett. 
Where programs are discretionary and supplied on a first-come, first-
served basis, the injustices of the county committee system we will 
discuss below are underscored. In my home county in Alabama, for 
example, over 99% of CRP payments go to white farmers even though the 
vast majority of producers are African American.
    Minority farmers are often the last to hear about programs and sign 
up windows. When they do request applications, they are often told the 
program is not for them, or else the applications are not yet 
available. When they return weeks later, the applications are gone and 
the funds already allocated to white farmers. The same problem exists 
in the allocation of disaster aid.
    USDA agencies in general could begin to cure this program and 
initiate accountability by taking two important steps.

  b If agencies are required to release county level data on 
        participation rates in each program, they will be more careful 
        in assuring that minority farmers hear about programs. If their 
        participation rates differ greatly from similar counties, the 
        USDA Civil Rights operation will have data that allows them to 
        prioritize where to investigate disparities.

  b The other critical step that Congress should require of USDA is the 
        recommendation that Mr. Burkett makes to establish a ``request 
        for service'' receipt. Whenever any farmer requests an 
        application or service and he or she is not supplied it, USDA 
        agencies should be required to provide a receipt that details 
        the name of the farmer, what was requested, why it was not 
        provided, and what action is recommended. A copy should be 
        given to the farmer, and one maintained in the office. In this 
        way, data would exist that could also make evident any 
        differences in service provided to minority and other farmers.

    Forest Service and NRCS and other conservation similarly better 
serve largely non-minority producers. FAS programs not designated for 
small farmers. Credit programs need vast improvements. Rural 
cooperative programs should better serve minority producers throughout 
the nation. Congress should highlight equity issues as it reviews these 
programs, particularly but not only before reauthorization.

  b To understand the specific problems in these programs, there must 
        be funding for research conducted with the community based 
        organizations and educational institutions that know how to 
        reach minority producers.

    In Appendix A, we have provided a copy of the testimony provided 
earlier this year to the House Agriculture Committee Subcommittee on 
General Farm Commodities and Risk Management. In this testimony, we 
share results from research the Rural Coalition conducted in 
cooperation with the Missouri Action Research Connection, based in the 
University of Missouri Department of Rural Sociology. The findings of 
this research, supported by the USDA Risk Management Agency and focused 
on largely minority farmers, shows very low participation in program 
crops. Of the farmers surveyed, over 30% had been denied a loan by FSA.
    We also found that less than 20% of the farmers had used crop 
insurance. Many farmers did not know where to find crop insurance. If 
they did, often the products were unsuitable for their diverse farming 
operations. In cooperation with RMA, we are working on a new project to 
learn what kinds of insurance of all types minority farm families use, 
and where they purchase it. We will also look at what types of crop 
insurance products minority farmers may find worth the price.
    We encourage the Agriculture Committee to continue its oversight on 
risk management and crop insurance. We would further note that where an 
agency, such as Risk Management Agency, makes a commitment to provide 
resources and work with community based groups, there is a much greater 
chance that gaps in services can be identified and methods to remediate 
them can be derived without the need for litigation.

  b We urge this subcommittee to focus on whether or not current 
        programs and insurance products have the potential to serve 
        minority and other small farmers.

  b Congress should also monitor the role of crop insurance companies 
        to assure that they make a more concerted investment and effort 
        to work with community based groups and educational 
        institutions in a meaningful way to identify and remedy gaps in 
        service to minority producers.

    Transparency and accountability are essential if Congress and the 
public are to have the tools to improve how USDA conducts business.

  b The Administration should report fully to Congress on the 
        implementation of the requirements of the farm bill, Section 
        10708 on Transparency and Accountability for Socially 
        Disadvantaged Farmers and Ranchers. According to this 
        requirement, the participation rates of minority farmers in all 
        of USDA's farm, credit, conservation programs should be 
        publicly disclosed on an annual basis to the county level.

    Finally, we note that USDA has failed to provide programs and 
services that meet the needs of small producers and diversified 
operations. Congress and the Administration should work with groups 
experiences in serving these populations to invite dialogue and 
specific program proposals on how the needs of small farmers should be 
addressed in the next farm bill. We will discuss this topic further in 
a future section of this testimony.
C. FSA County Committees and Transparency and Accountability
    The existing FSA county committee system must be substantively 
reformed to assure it provides fair delivery of services everywhere, or 
else it should be eliminated. Only when FSA discloses participation 
data as well as information on the cost of operating this system, can 
Congress and the public begin to assess if the funds expended are a 
good use of Federal dollars to accomplish the work the committees are 
supposed to accomplish.
    It is the opinion of most minority and limited resource farmers 
that they will not be fairly served through the existing system. We 
believe it is also of paramount importance that the election process be 
revised and fully monitored to reflect completely the spirit of the 
Voting Rights Act and other civil rights laws with respect to minority 
participation.
    Below and in Appendix B, is a sampling of data that would be 
available if the new county committee election data disclosure 
requirements in the 2002 Farm Bill were implement. Data shown below are 
incomplete; a FOIA request for the complete data for every county and 
state sent by the Rural Coalition to USDA in December 1998 has never 
been answered.

    Data on FSA County Committees

    (See Appendix B for more information)

   The litigation of the past decade has held USDA liable for 
        its many failings in providing service to farmers. Minority 
        farm loss in previous decades progressed at a rate more than 
        three times that of other farmers. Between 1987 and 1997, an 
        additional 20% of African American farms were lost.

   Hispanic farmers remain one of the largest new group of 
        entrants to agriculture, increasing from 17,476 in 1987 to 
        27,717 in 1997.

   Figures compiled for the Intertribal Agriculture Council 
        estimates that FSA eligible voter lists underrepresented the 
        number of Indian producers by 80% in the ten largest states.

   The County Committee system was devised in the 1930's as a 
        way to involve farmers in managing USDA programs and services. 
        The democratic model intended has often instead served as a 
        barrier to service for farmers in some areas. The fact that 
        nothing has been done to correct the problems in some regions 
        casts a negative light on the whole system.

   The County Committee system is totally federally funded, and 
        as such, the Federal Government should assure that farmer-
        elected county committees are chosen in fair elections and that 
        minority and women producers have a chance at assuring 
        equitable representation.

   According to information provided to Rural Coalition by Farm 
        Services Agency, of 8,378 elected FSA County committee members 
        elected in 1996, only 20 were African American, 33 American 
        Indian, and 50 Hispanic.

   Where county committees have not been successful, the result 
        has been costly lawsuits, and substantial increases in the rate 
        of minority and small farm land loss. Inconsistencies must be 
        addressed in order to maintain the integrity of local 
        participation and decision-making procedures of USDA.

   Many county committee election ballots are disqualified (up 
        to 25% in some places) but FSA has not released the data it 
        collected in 1997 on disqualified ballots.

   Inadequate participation of minority, socially disadvantaged 
        and other small farmers and rancher in county committees 
        elections has contributed to the widely variable service 
        provided to these producers in many counties. Election 
        procedures must be consistent and public information available 
        in order to ensure that all county committees operate in an 
        equitable manner.

   In a number of places, groups have found that ballots are 
        opened as they arrive, with an informal count begun. This 
        procedure leaves open the possibility that if the numbers are 
        not as anticipated, committee members or staff can go out and 
        selectively seek additional ballots from others who have not 
        voted yet. New Public Disclosure for County Committee Elections 
        provisions passed in the 2002 Farm Bill require that ballots be 
        opened and counted at the same time and this counting be 
        announced and open to observer. Implementation of Section 10708 
        of the farm bill should help cure the previous problems.

    We have recounted one specific instance in the 1990's of an 
election overturned in Georgia when a Black farmer won a second term on 
the committee. The results were thrown out on a technicality, and when 
the election was redone, more absentee landowner ballots were cast. The 
Black farmer lost by a handful of votes.

   There are wide discrepancies between the number of farmers 
        and the number of eligible voters on FSA lists, with wide 
        regional and state discrepancies. In New Jersey there was one 
        eligible voter for every farmer; in NC the ratio was six 
        eligible voters for every farmer. (See Appendix B, Table 1)

    In 1997, there were:

   5,728,024 eligible voters for farmer elected county 
        committees compared to 1,911,859 farmers.

   About 17.6%, or 382,725 of these eligible voters cast 
        ballots at the following rates:

        17.7% of white farmers
        10.8% of African American Farmers
        28.1% of Asian/Pacific Islander Farmers
        7.0 % of American Indian/Alaska Native Farmers (Other 
        statistics indicate 
          that FSA figures undercount American Indian producers by at 
        least 80%)

   In Wayne County, North Carolina, there were 902 farms and 
        6079 eligible voters. (See Appendix B, Table 2).

   An election in NM showed that only 84 votes were cast, with 
        the winner receiving only 25 votes. In this county with more 
        than 3,500 eligible voters, just 25 farmers cast votes for a 
        county committee member to hold a 3 year seat.

    Minority Farm Representation on County Committees

    Some data from USDA on the 1996 and 1997 elections:

   In Alabama, one of 189 county committee members, or 0.53%, 
        were African American.

   In NC, 2 of 273, or 0.73%, were African American.

   In South Carolina, 2 of 121, or 1.65%, were African 
        American.

   In Massachusetts, 2 of 35 committee members, or 5.71%, were 
        African American.

   USDA has since 1997 stopped releasing comprehensive data on 
        county committee composition and election participation instead 
        releasing reports showing an aggregated and meaningless 30% 
        increase in minority county committee membership, from about 
        200 and some to 300.

    In outreach trainings the Rural Coalition put together in 1996 and 
1997 with support from and in collaboration with the FSA Outreach 
Office, the 40 representatives of community-based organizations present 
articulated unanimously the lack of confidence minority producers have 
in the county committee system and in the willingness of FSA to serve 
them at all. However, the groups conducted outreach following the event 
that helped producers better understand the role of county committees 
and enabled them to increase participation.
    Building a new climate of trust and confidence, redressing these 
concerns, and assuring fair participation in USDA programs will take 
time. While these changes are made, outreach programs and collaboration 
such as that noted above are essential to assure underserved producers 
know how to access urgently needed the services of FSA and other 
programs.
    Our recommendations are as follows:

  b Outreach funds in all programs are essential to provide the 
        assistance necessary now to help minority farmers. We urge 
        Congress to supply adequate funds for outreach to FSA, RMA, 
        NRCS and other programs to reach minority producers and supply 
        adequate and coordinated outreach that supplements the basic 
        outreach structure supported by the Minority Farm Outreach 
        Program.

  b Congress should monitor closely the Secretary's plans and progress 
        relative to the implementation of Section 10708 of the farm 
        bill. In particular, Congress should make sure the new county 
        committee election procedures are implemented in time for the 
        2002 County Committee elections, and that within 90 days of the 
        election the Secretary conducts an analysis to determine if 
        more action is needed to assure fair representation. The 
        results of this analysis should be reviewed by congress.

  b Election participation data should also be disclosed each year to 
        the public on existing FSA websites for the county, state and 
        national level. We would note that the Congressional Budget 
        office scored the cost of this amendment at zero because USDA 
        already collects the data required.

  b Revised election procedures and disclosure requirements should also 
        be required by Congress with respect to all other Boards and 
        Committees that are associated with USDA programs, including 
        Soil Conservation Districts, Extension and elsewhere.

  b In the case of County Committees, the Department must have in place 
        responsible and accountable staff members who are Federal 
        employees. New recruitment should emphasize diversity in the 
        delivery workplace.

  b Congress should continue oversight to assure the county committee 
        system works fairly for all producers. If results are not 
        achieved, the system should be abolished.
D. The Need for a Minority Farm Registry
    The Minority Farm Registry is an essential tool to reach and serve 
minority farmers and to monitor the progress of USDA agencies in 
reaching these farmers. It should be implemented immediately with the 
support from multiple USDA agencies under the existing missions of 
their programs.
    The Registry promised by the Department and approved in 2000 by the 
Office of Management and Budget has not yet been officially instituted. 
Nor has its use as a vehicle to collect baseline data and monitor 
progress in serving minority farmers been articulated.
    The registry implements recommendation #28 of the CRAT report. We 
fear the approved program has fallen victim to bureaucratic bungling 
within the department. Apparently, agencies cannot agree on where funds 
should come for the implementation of the registry. Because the 
registry would help many agencies better deliver and accomplish the 
purposes of their program, we believe multi-agency support should be 
provided, and the funds for data collection should not be supplied from 
the scarce resources of the Section 2501 minority farm outreach 
program.
    As the registry was being developed, we worked actively with staff 
members of several agencies to develop an outreach plan for the 
registry. It is critical that USDA work in partnership with 
organizations that have credibility with minority producers if the 
registry is to be used and USDA to develop new credibility.
    The agencies have reported the process is stalled over the 
mechanisms forfunding the registry. We recommend that

  b Congress urge the Secretary to resolve the bureaucratic issues, 
        establish the registry with appropriate support and 
        collaboration from those agencies which deliver services to 
        farmers, and work as proposed in partnership with community 
        based groups to educate minority farmers about the registry, 
        its purposes and use.
E. Integration of Outreach Efforts and the Need for a Coordinated Small 
        Farms Program or Agency
    USDA and many of its agencies have failed to work appropriately and 
strategically with the groups that are the legitimate representatives 
of its underserved constituents. It has missed the opportunity to 
create partnerships with them to assure fair and equitable service is 
provided in all USDA programs. As the information provided later in 
this section illustrates, the Minority Farm Outreach and Technical 
Assistance Program has created results.
    In addition, the partnerships in research and outreach with Risk 
Management Agency, NRCS and FSA cited elsewhere have similarly been 
effective for USDA agencies and minority farmers alike.
    This Committee is well aware that the groups appearing before you 
today have all diligently represented the needs and interests of their 
minority farm members. They have demonstrated their capacity to assist 
the department and the Congress in identifying solutions to the 
problems we have discussed today.
    At the present moment, the Minority Farm Outreach Program is being 
moved for the sixth time since 1990. Those of us who have helped create 
and have long supported this program have not as a group been involved 
in the decisions surrounding this program. From what we can understand, 
the grant-making functions are being separated from the program 
functions as defined in the new farm bill.
    In the 2002 Farm Bill, Congress expanded authority for the Minority 
Farm Outreach and Technical Assistance Program as follows:
    The law defines in Section 10707(b)(a)(1) that ``the Secretary of 
Agriculture shall carry out an outreach and technical assistance 
program to encourage and assist socially disadvantaged farmers in 
owning and operating farms and ranches and participating equitably in 
the full range of agricultural programs offered by the Department.'' 
This program ``shall enhance coordination of the outreach, technical 
assistance and education efforts authorized under various agriculture 
programs . . .''
    We believe that in addition to the outreach functions already 
supported under this program, that the Minority Farm Registry belongs 
here as well as a critical tool to assist these farmers in owing and 
operating farms.
    One, but only one, function of this program is to ``enter into 
grants and contracts with the eligible entities to provide information 
and technical assistance.'' The law makes clear that this authority is 
in addition to any other authority provided in the farm bill or 
elsewhere. In addition to the funds appropriate, any other agency of 
the department is authorized to contribute funds to participate in any 
grant contract or agreement if the objectives of that contract further 
the authorized programs of the contributing agency.
    In the past year, the community based organizations and educational 
institutions who that designated as eligible entities under this law 
have collaborated more closely than ever to secure a more coordinated 
program. It is our common hope that the myriad outreach and small farm 
functions of the department can over time, and in consultation with 
this important group of stakeholders, be more strategically integrated 
and coordinated.
    We believe strongly that these functions should be separate from 
those of the new Assistant Secretary for Civil Rights whose function is 
to assure that all programs are fairly delivered according to the law.
    The farmers we serve strongly support the Minority Farm Outreach 
Program. However, as we prepared for the farm bill, our members also 
strongly supported a new program to serve the diverse needs of small 
farmers. Many also suggested a separate agency or program to deliver 
these services.
    Minority and small farmers need a real home at USDA. They need 
programs to serve their unique needs and special value to rural 
communities and our society. These groups should not be excluded, but 
instead should be involved as a group as the Secretary makes decisions 
that are critical not only to the grant-making portion of the Outreach 
Program but to the eventual coordination and integration of outreach, 
program and services that are essential to finally assuring a future 
for minority farmers.
    In the following section, we provide more information on what the 
program is now accomplishing.

    The Minority Farm Outreach and Technical Assistance Program

    The Minority Farm Outreach and Technical Assistance Program helps 
minority and other small farmers gain access to USDA's credit, 
commodity, conservation and other programs. Under this program, 
community-based organizations and educational institutions with long 
experience in serving minority farmers provide them with training in 
farm management, production, marketing and other key assistance 
critical to accessing USDA programs and managing viable farm 
operations.

    The Facts:

   Minority farmers receive fewer farm program payments, fewer 
        and lower-valued loans, and less outreach and training than do 
        their non-minority peers.

   These disparities have led to conditions whereby minority 
        producers are losing land at a rate three times that of other 
        producers.

   Many minority producers, especially new-entry farmers, have 
        little knowledge of or access to USDA programs that should be 
        available to help them.

   The Minority Farm Outreach Program is the only program 
        created by Congress to address the disparate land loss by 
        minority producers by providing them with meaningful 
        assistance.

   Minority farmers who have received services from the 
        educational institutions or community-based organizations 
        supported by this program have higher rates of participation 
        and understanding of USDA programs.

   Since its inception this program has been continually funded 
        far below its authorized level of $10 million. It has never 
        been funded at more than $3.2 million.

   Increased funding is needed for this program to reach the 
        countless number of farmers and ranchers who are in need of 
        support.

    The Outreach program serves minority communities that have been 
historically underserved and are in vital need of services. The program 
has provided outreach to more than 100,000 rural constituents and has 
been an invaluable resource for the more than 400 counties where it has 
been implemented, among them some of the poorest in the country, where 
minority and under-served small and family farmers are concentrated.
    Technical and outreach staff understand their clients' needs. This 
program offers minority farmers direct technical assistance and 
training on farm management, production, and marketing assistance, and 
cooperative and credit union development; from organizations that have 
experience working with minority producers and have established 
themselves as members of the community.
    The Minority Outreach Program WORKS! Communities where this program 
operates have seen a dramatic increase in the number of minority 
producers participating in farm programs and staying on the land. 
Producers in communities with no outreach program have little to no 
knowledge of USDA programs. Additional funds are needed to extend 
Outreach services to more eligible organizations to reach more 
communities and farmers where resources have never been allocated.
    In order to adequately meet unserved needs, Congress expanded 
funding authority for the Minority Farm Outreach Program to $25 million 
in the 2002 Farm Bill. We urge that the appropriation for the program 
be expanded to $25 million for FY 2003.

    Addressing the Myths about the Minority Farm Outreach Program

    Myth: All Farmers Have Equal Access to USDA Programs

    Fact: The majority of USDA farm program funds benefit the largest 
farmers. Without technical assistance through the Minority Farm 
Outreach and Technical Assistance Program, there is little chance many 
minority farmers will know about, qualify for, or benefit from USDA 
farm programs.
    Fact: In 2001, the scant $3 million provided by Congress helped 
USDA support 32 outreach programs in 23 states and Puerto Rico, 
reaching hundreds of minority farmers and ranchers. A funding increase 
to $25 million would allow the expansion of current programs to reach 
more farmers, and would allow more eligible institutions with 
demonstrated experience to reach the thousands more eligible farmers 
they seek to serve.
    Fact: Under the new farm payment limitations in the 2002 Farm Bill, 
the same $25 million that could reach thousands of minority farmers 
would reach only about 50 of the largest producers.

    Myth: The Program is Just a Subsidy for the 1890 Land-Grant 
Universities

    Fact: Hundreds of African American and other farmers receive 
critical services under this program through the 1890 Land-Grant 
Institutions. In addition, the program serves a diverse group of 
African-American, Latino, Asian and Native American community-based 
organizations that have assisted socially disadvantaged producers for 
many years, and in some cases, decades without Federal support. These 
groups have provided services substantially similar to those provided 
with Federal support in other outreach and extension programs for 
mainstream farmers.
    Fact: In 2001, an improved outreach and peer review process 
resulted in grants to more than a dozen CBO's and Tribal and Community 
College, and six programs west of the Mississippi.

    Myth: The Program Has Not Produced Results

          ``Since 1995, we have helped African-American farmers save 
        more than 4,000 acres of land valued at more than $3 million, 
        and helped to secure financing for the purchase of more than 
        1600 acres, valued at more than $1 million. In 2000 our 
        outreach efforts helped 192 farmers participate in USDA 
        programs. In 2000 87% of our farmers grew alternative crops, 
        92% had developed record keeping systems, and 8% were using 
        computers. Average gross income of our farmers has increased by 
        $15,000 since1995. Only 52% continue to depend on off-farm 
        income, down from 64%.''
    Jerry Pennick, Federation of Southern Cooperatives/Land Assistance 
                                                                  Fund.
          ``Since 1998 we have worked with over 150 new immigrant 
        farmers to help them adapt their agrarian skills to provide 
        food for their families as well as to provide an avenue to 
        self-sufficiency. The New Immigrant Agriculture Project (NIAP) 
        has helped add over 40 new immigrant farmers onto the FSA 
        records and helped the first Hmong farmer in Minnesota to own 
        land get an FSA farm loan and purchase 56 acres.''
                           Melissa MacKimm--Minnesota Food Association.
          ``The Center for Latino Farmers' primary focus is on farm 
        worker to farm owner initiatives. The Project is providing 
        outreach and assistance to 150 Latino farmers to increase their 
        access to USDA programs, develop the farmers' understanding of 
        computers and train them in how to set up their own 
        computerized accounting systems.''
   Luz Bazan Gutierrez, Rural Community Development Resources, Yakima, 
                                                            Washington.
          ``H.A.C. is the first CBO of its kind that focuses on 
        economic development in the Hmong immigrants in California's 
        central valley. HAC helped establish the Hmong American Farming 
        Cooperative and is working with 100 farmers to cooperatively 
        market specialty Asian vegetables. Our Small Farm Resource and 
        Training Center offers producers one-stop assistance in farm 
        planning, using new technology in their operations, and in 
        navigating USDA programs and services, as well as training and 
        assistance in their native language.''
              Chukou Thao,--Hmong American Community, Inc., Fresno, CA.

    Discrimination and neglect still exist, and the community groups 
working in the field are among the best equipped to cooperate with the 
department in bringing about a new responsiveness and spirit of service 
in the delivery of USDA programs.

  b It is our hope that this Committee will recommend to the Secretary 
        that the groups represented here and their counterparts in 
        educational institutions and community based organization who 
        work with minority farmers be included as a group in a dialogue 
        about how an integrated outreach and technical assistance 
        program could be housed and operated within USDA.

  b We further hope the Committee will hold hearings to hear our 
        proposals for programs to serve small farmers so that pilot 
        efforts may be instituted and evaluated well in advance of the 
        next farm bill.
F. The Need for the Establishment of the Assistant Secretary for Civil 
        Rights and the Institution of Real Accountability Throughout 
        USDA
    The USDA Leadership has failed to (a) redress and remove vestiges 
of past discrimination, (b) create a system which rewards or does not 
undercut or punish those agencies and individuals who are making 
changes, and (c) hold top level managers accountable for the 
performance of their subordinates.
    To those of us who have done all we can to work with USDA to 
improve services, it is no surprise that structural change has not 
occurred.
    The same people who have created discrimination or allowed 
discrimination to continue among their subordinates remain in place at 
USDA. At the same time, employees with the courage to attempt to make 
change have either been removed or are penalized for what they do.
    After $700 million has been paid in settlements under the Pigford 
v. Glickman Consent decree, we are astounded that no high level 
managers in FSA credit have been retired or replaced. We have seen no 
data that shows managers, or USDA employees, have been reprimanded and 
removed. No retired employees have had their pension benefits re-
evaluated. The failure to demonstrate that discrimination has 
consequences in fact constitutes permission to employees to continue 
business as usual.
    USDA a week ago put out a new press release that among other things 
announced still more civil rights training for its employees. USDA has 
repeatedly instituted Civil Rights training for employees since 1997. 
If the same employees who have been trained before are still not 
delivering services adequately, it is long past time that they be 
evaluated and removed!
    Employees who have discriminated are retiring with pension benefits 
while settlements for farmers are denied or delayed. In the county 
where the Federation of Southern Cooperatives has its training center, 
I know 100 people who were discriminated against by the County 
Supervisor. His actions directly cost the more than $5 million in 
settlements that have been paid out to these farmers. The consequences 
of his actions: none. He has retired with full benefits at the expense 
of the taxpayer.
    For some years, USDA employees have reported that a high level 
manager who for an extended period of time had a hangman's noose in his 
office and who displayed this noose to at least one African American 
employee is still in his position. It does not increase confidence that 
this individual is the same person who for years has been in charge of 
loan servicing for FSA. Consider, however, the message transmitted to 
field personnel when this individual remains in place.
    Worse still is the fact that his former supervisor, Lou Ann Kling, 
who has for many years been one of the most ardent supporters of 
minority and other small farmers, was removed for her position as the 
head of farm credit at the same time she tried to hold the manager with 
the noose accountable. She was transferred to the FSA Outreach Office.
    Many other people whom we respect and who have done their utmost to 
support equity and accountability at USDA have similarly been rewarded 
with demotions or lack of promotions. We note particularly that Pearlie 
Reed, former chief of the Natural Resources and Conservation Service, 
has been moved to a post of regional conservationist for the west. The 
post of NRCS chief has been made political once more, which is the 
prerogative of this Administration. However, we would note that at the 
same time, the post of Administrator of Farm Services Agency has in 
recent years been returned to a career position, now filled by Mr. 
James Little.
    Throughout the whole county committee system, and in headquarters 
as well are people who have been a part of discriminatory practices.
    While the civil rights program complaints system at has failed on 
many levels, the most egregious is that it has not been insulated from 
the agencies being investigated. Farm Services and other agencies 
remain far too involved in the process of reviewing complaints. Quite 
apart from the skills of the individual involved, it does not increase 
confidence in the area of program complaints that the former Director 
of Civil Rights for Farm Services Agency is now the Director of the 
Department's Office of Civil Rights. USDA has simply not yet earned a 
reputation for fairness in this area necessary to avoid the suspicion 
that the fox has been assigned to guard the chicken coop.
    Discrimination and disparity in service has not stopped at USDA. 
However, farmers are so frustrated with the complaints process that 
they fail to file complaints until situations deteriorate beyond easy 
rectification. The failure of USDA to get on with the business of 
processing complaints, rectifying injustice, and fixing problems with 
service delivery to prevent future problems is grossly unfair not only 
to farmers and employees who try to do their jobs well, it also risks 
new liability and taxpayer expense to solve problems that should no 
longer be occurring.
    USDA, to our knowledge, still lacks any comprehensive and 
consistent monitoring and compliance review system. Even data collected 
on a regular basis that would allow USDA officials to monitor 
performance of agencies and employees at the county level are not 
reviewed from the framework of preventing disparate treatment. It is 
not clear that these factors are considered specifically in monitoring 
the performance of employees.
    As a result, complaints are the only evidence USDA has to take 
corrective action. Were program complaints reviewed in a consistent and 
unbiased manner, completely insulated from the agencies against whom 
the complaints are filed, USDA Office of Civil Rights could focus more 
on the accountability mechanisms and corrective actions that are 
essential to instituting a fair system of service delivery.
    The failure to adequately and fairly address complaints only delays 
the time it will take to end the history of past discrimination by 
USDA. We recommend that the complaint resolution process be divorced 
from any USDA staff involvement. Any employee who meddles should be 
dismissed and be made liable as a criminal offense for their actions.
    Congress has responded to these concerns by establishing an 
Assistant Secretary for Civil Rights that reports directly to the 
Secretary.

  b We recommend that Congress urge the Secretary to move rapidly to 
        create this post and consolidate all Civil Rights functions 
        there.

  b Congress should also urge the Secretary to announce a well-
        qualified and audacious candidate for this position and a plan 
        for structuring this new office.

  b The Assistant Secretary for Civil Rights should also assure that 
        public disclosure is instituted to show action taken to hold 
        employees accountable for discrimination. Reports should 
        summarize the types of action taken (reprimand, removal, etc.), 
        categorized by agency, state, and grade level.
Conclusion
    We appreciate this opportunity to share our insights and 
recommendations with you. We are most willing to answer now or in the 
future any questions you may have or to offer any assistance we are 
able to the Committee or to the Secretary to make USDA services more 
equitable.
Appendix A
The Implementation of Title I of the Agricultural Risk Protection Act 
        with Respect to the Needs of Socially Disadvantaged and Other 
        Limited Resource Producers
Statement of John Green, M.S. on behalf of Rural Coalition and Missouri 
        Action Research Connection (MARC) to the U.S. House of 
        Representatives Committee on Agriculture Subcommittee on 
        General Farm Commodities and Risk Management
February 13, 2002

    Executive Summary. The Rural Coalition, a Washington D.C.-based 
coalition with more than 80 community-based member groups serving small 
farmers, and the Missouri Action Research Connection (MARC) at the 
University of Missouri-Columbia conducted thirteen focus groups with 
small, limited resource and minority farmers in the United States to 
obtain their input on agricultural programs and services.* As part of 
this effort, participants were specifically asked to discuss crop 
insurance. Among the culturally and geographically diverse focus 
groups:
---------------------------------------------------------------------------
    * This research was conducted by the Rural Coalition and Missouri 
Action Resource Connection with support from the USDA Risk Management 
Agency, Oxfam America, Jessie Smith Noyes Foundation, Presbyterian 
Hunger Program, and additional support from the Department of Rural 
Sociology in the College of Agriculture, Food and Natural Resources, 
University of Missouri-Columbia. The findings may not represent the 
policies or positions of the funding agencies. For the complete report, 
contact John Green, Missouri Action Research Connection, Department of 
Rural Sociology, 203 B Sociology Bldg., University of Missouri, 
Columbia, MO 65211, phone [Redacted], email [Redacted].

   Participants indicated the least familiarity with and 
        moderately low use of crop insurance, relative to other 
---------------------------------------------------------------------------
        agricultural programs and services.

   Participants who reported not using crop insurance argued 
        that they did not know how, it was too expensive, their farm 
        was not large enough and/or that the produce they grow/
        livestock they raise are not covered.

   In not a single group did participants mention crop 
        insurance without facilitator prompting in discussions of who 
        and/or what organizations and agencies are helpful or not 
        helpful to their farming enterprise.

   Participants generally supported crop insurance and the need 
        for disaster assistance and risk protection in concept, but 
        noted the need for change.

    Introduction to the Focus Group Project. In order to obtain program 
input from small, limited resource and minority farmers, focus groups 
were collaboratively conducted by the Rural Coalition and MARC. 
Thirteen focus groups involving a total of 130 participants were held 
during 2001 in California, Maine, Mississippi, New Mexico, North 
Carolina, South Carolina, Vermont and Washington. Topics covered were 
farmers' hopes for the future, the challenges they face, and their 
recommendations for future agricultural programs. Of particular 
interest in these discussions were issues related to disaster 
protection, risk management and crop insurance.
    The participants in this research project represented a diverse 
array of agricultural producers. Over \1/3\ of the participants were 
women. Age was centered in the 44 to 59 years category. Concerning 
race/ethnicity, the largest group of participants identified as Black/
African American, followed in prevalence by White/Euro American and 
Hispanic/Latino. Other participants identified as Asian, specifically 
Hmong, or American Indian. The largest percent of participants had 
farms ranging in size from 10 to 49 acres (33.6 percent), followed by 
those who had less than 10 acres (24.8 percent). Concerning farm sales 
in 2000, over \1/4\ of the participants were in the $1,000 to $4,999 
range, followed in frequency by those who reported over $50,000 in 
sales (23.5 percent). There were a considerable number of participants, 
18.6 percent, that reported farm sales less than $1,000, while a 
combined 32.4 percent fell in one of the three categories ranging from 
$5,000 to $50,000 in sales.
    Farmers' Discussions of Crop Insurance. To begin, it is important 
to note that many focus group participants were generally unfamiliar 
with government agricultural agencies and programs. For example, there 
were those who were unsure of the distinction between agencies and 
specific programs, particularly after the 1994 USDA reorganization, 
while others simply had little experience with them. Participants 
attributed this lack of knowledge and contact as resulting from 
inadequate outreach efforts to small, limited resource and minority 
farmers on the part of agricultural agencies, or previous negative 
experience with these or other USDA agencies.
    In a survey of their knowledge of and participation in various USDA 
programs and services, focus group members indicated the least 
familiarity with crop insurance (43.6 percent) relative to other USDA 
programs (see Table 1). In comparison, they indicated the most 
familiarity with Cooperative Extension, Farm Services Agency (FSA) and 
the Natural Resources Conservation Service (NRCS). However, there were 
numerous instances where participants had not taken part in the 
programs offered by these or any of the other agencies. Less than \1/2\ 
of participants who reported being familiar with crop insurance had 
ever sought assistance, a significantly lower rate of engagement than 
for the other programs and agencies discussed.

  Table 1: Participant Familiarity with Crop Insurance in Comparison to Other Government Programs/Services from
                                               Focus Group Survey
----------------------------------------------------------------------------------------------------------------
                                                     Aware of Program/Service        Ever Sought Assistance *
                Programs/Services                ---------------------------------------------------------------
                                                     Frequency        Percent        Frequency        Percent
----------------------------------------------------------------------------------------------------------------
Crop Insurance
  Yes                                                         41           43.6%              17           44.7%
  No                                                          53           56.4%              21           55.3%
FSA Credit Programs
  Yes                                                         62           62.0%              38           62.3%
  No                                                          38           38.0%              23           37.7%
FSA Farm and Disaster Programs
  Yes                                                         63           62.4%              42           67.7%
  No                                                          38           37.6%              20           32.3%
FSA County Committees
  Yes                                                         56           56.6%              36           67.9%
  No                                                          43           43.4%              17           32.1%
Natural Resource Conservation Service
  Yes                                                         62           62.0%              35           58.3%
  No                                                          38           38.0%              25           41.7%
Cooperative Extension Service
  Yes                                                         72           75.8%              55           84.6%
  No                                                          23           24.2%              10           15.4%
----------------------------------------------------------------------------------------------------------------
Source: Rural Coalition/MARC Focus Group Project, 2001.
* Question only asked of those who were aware of program/service.

    Approximately 20 percent of focus group participants reported 
actual participation in crop insurance (Table 2). In comparison, less 
than \1/4\ of the participants had ever received an USDA loan, and over 
30 percent reported having been denied such a loan. Thirty-two percent 
of focus group participants indicated that they had ever received USDA 
Disaster Assistance. Even fewer participated in annual commodity 
programs (15.3 percent). Participation in conservation programs was 
higher at 27.4 percent.
    While most groups emphasized the importance of disaster assistance, 
the reasons cited in the survey for not participating in crop insurance 
included ``I don't know how'' and ``I do not have enough money.'' 
Others said that crop insurance is ``too costly'' and reported that 
they ``don't have a large farm,'' that their ``level of production is 
insufficient'' or that what they produce ``is not covered.'' Some of 
these statements reflect a general misunderstanding of how crop 
insurance programs operate, while others reflect problems with the 
current structure of these programs.

   Table 2: Participant Involvement in Crop Insurance in Comparison to
       Other Government Programs/Services from Focus Group Survey
------------------------------------------------------------------------
            Programs/Services                Frequency        Percent
------------------------------------------------------------------------
Participate in Crop Insurance
  Yes                                                 22           19.8%
  No                                                  89           80.2%
Ever Received an USDA Loan
  Yes                                                 28           24.3%
  No                                                  87           75.7%
Ever Been Denied an USDA Loan
  Yes                                                 33           30.3%
  No                                                  76           69.7%
Ever Received USDA Disaster Assistance
  Yes                                                 36           32.1%
  No                                                  76           67.9%
Participate in Annual Commodity Programs
  Yes                                                 17           15.3%
  No                                                  94           84.7%
Participate in Conservation Programs
  Yes                                                 31           27.4%
  No                                                  82           72.6%
------------------------------------------------------------------------
Source: Rural Coalition/MARC Focus Group Project, 2001.

    When asked in the focus groups who and/or what organizations and 
agencies are helpful or not helpful to their farming enterprise, 
neither crop insurance nor crop insurance agents were mentioned by any 
of the focus groups without facilitator prompting in discussions, and 
few of the participants knew their crop insurance agent or where to 
find him/her. In the end, focus group participants were generally 
supportive of the ``idea'' of crop insurance, but they felt that 
significant changes were needed to make it applicable to their farms.
    Conclusion and Points to Consider. Based on the results taken from 
this research and the outreach work undertaken by the Rural Coalition 
more generally, there are a few points that should be considered in 
review of crop insurance as it concerns small, limited resource and 
minority farmers:

   Information: These farmers often do not know what programs 
        and products are available, how to apply or who to contact.

   Price: Participation in some programs may be prohibitively 
        expensive.

   Limited Coverage: Many small farm products (especially 
        vegetables) are not covered.

   Program Structure: Programs tend to be more responsive to 
        larger-scale producers and often do not meet the needs of 
        small, limited resource and minority producers.
Appendix B: County Committee and Eligible Voter Data

 Table 1: Number and Ratio of FSA Eligible Voters Compared to Number of
                            Farmers, By State
------------------------------------------------------------------------
                                         Number of
                       Number of     Eligible Voters--  Ratio: Number of
      State          Farmers 1997       Farm Service     Eligible Voters
                      Agriculture      Agency 4/96 *      to Number of
                        Census                               Farmers
------------------------------------------------------------------------
       Alabama             41,384           167,794               4.05
        Alaska                548             1,579               2.88
       Arizona              6,135            30,563               4.98
      Arkansas             45,142           143,247               3.17
    California             74,126            97,276               1.31
      Colorado             28,268            59,147               2.09
   Connecticut              3,687             5,292               1.44
      Delaware              2,460             7,594               3.09
       Florida             34,799            63,633               1.83
       Georgia             40,334           156,941               3.89
        Hawaii              5,473             2,917               0.53
         Idaho             22,314            56,106               2.51
      Illinois             73,051           240,739               3.30
       Indiana             57,916           194,145               3.35
          Iowa             90,792           245,897               2.71
        Kansas             61,593           208,485               3.38
      Kentucky             82,273           302,567               3.68
              Louisiana    23,823           116,732               4.90
         Maine              5,810            15,296               2.63
      Maryland             12,084            30,408               2.52
 Massachusetts              5,574            11,036               1.98
      Michigan             46,027           173,801               3.78
     Minnesota             73,367           205,548               2.80
   Mississippi             31,318           174,338               5.57
      Missouri             98,860           236,865               2.40
       Montana             24,279            94,345               3.89
      Nebraska             51,454           160,626               3.12
        Nevada              2,829             4,710               1.66
 New Hampshire              2,937             4,336               1.48
    New Jersey              9,101             9,082               1.00
    New Mexico             14,094            40,039               2.84
      New York             31,757            68,404               2.15
[North] Carolina           49,406           301,325               6.10
  North Dakota             30,504           110,769               3.63
          Ohio             68,591           217,684               3.17
      Oklahoma             74,214           146,618               1.98
        Oregon             34,030            48,059               1.41
  Pennsylvania             45,457           118,536               2.61
  Rhode Island                735             1,400               1.90
[South] Carolina           20,189           114,673               5.68
  South Dakota             31,284           113,812               3.64
     Tennessee             76,818           250,824               3.27
         Texas            194,301           589,461               3.03
          Utah             14,181            23,902               1.69
       Vermont              5,828            12,043               2.07
      Virginia             41,095           160,646               3.91
    Washignton             29,011            61,458               2.12
 West Virginia             17,772            46,929               2.64
     Wisconsin             65,602           273,345               4.17
       Wyoming              9,232            19,328               2.09
                  ------------------------------------------------------
  Total..........       1,911,859         5,940,300               3.11
------------------------------------------------------------------------
* Last figures made public.
Figures in bold exceed the National Average.


             Table 2: FSA Eligible Voter Numbers and Election Participation, Selected Counties, 1996
 Eligible Voter Information by County for FSA Election Years 1996 Selected Counties (From County level FSA Forms
                                                     681) *
----------------------------------------------------------------------------------------------------------------
                                         Eligible Voters                 Voters/Open LAA's         Voter Partic.
                                --------------------------------------------------------------------------------
    County     Year of   Total    Total      Minority      Total   Total     Minority      Total     Minority
                Elec.    Farms  --------------------------------------------------------------------------------
                                   (#)      (#)     (%)     (#)     (#)     (%)     (#)     (%)     (#)     (%)
----------------------------------------------------------------------------------------------------------------
                                                     Alabama
----------------------------------------------------------------------------------------------------------------
      Autaga        95             1,875     315     17%                             151      8%      14      4%
* Editor's
 note: the
 statement
 submitted as
 part of the
 appendices
 of the Rural
 Coalition/
 Coalicion
 Rural for
 the March
 25, 2021
 hearing is
 incomplete
 (it cuts off
 part of the
 original
 document's
 table).
 Further
 note: the
 published
 hearing,
 Serial no.
 107-23 does
 not include
 the cover
 page, p. 1,
 of this
 testimony.
 To aid in
 clarity, the
 table has
 been
 recreated,
 in its
 entirety,
 pp. 182-184,
 from the
 previously
 published
 hearing. The
 current
 extant link
 for an
 electronic
 copy is a
 Digitized by
 Google pdf
 https://
 books.google
 .com/
 books?id=Pzv
 8-I5YZcoC.
                    96             1,935     308     16%     699      76     11%      47      7%       1      1%
                    97
     Bullock        95             1,789     574     32%
                    96             1,789     574     32%     836     304     36%      92     11%
                    97
      Butler        95             2,343     917     39%                             309     13%     131     14%
                    96             2,343     917     39%     776     311     40%      90     12%      32     10%
                    97
     Chilton        95             3,488     128      4%                             101      3%      11      9%
                    96             3,127     127      4%     136      14     10%      61     45%       2     14%
                    97
     Conecuh        95             2,231   1,022     46%                             384     17%     178     17%
                    96             2,245   1,023     46%     826     374     45%     134     16%      61     16%
                    97
      Dallas        95             3,632   1,247     34%                             303      8%      31      2%
                    96             3,632   1,247     34%   1,035     251     24%      50      5%      18      7%
                    97
      Greene        95             1,507     568     38%                             525     35%     188     33%
                    96               690     334     48%     690     239     35%     334     48%     175     73%
                    97
     Marengo        95             2,314   1,163     50%                             287     12%             12%
                    96
                    97
       Perry        95             1,794     691     39%                             272     15%
                    96               754     219     29%     754     219     29%     104     14%
                    97
      Sumter        95             1,625     572     35%                             365     22%     100     17%
                    96
                    97
      Wilcox        95             1,581     622     40%                             364     23%      73     12%
                    96
                    97
----------------------------------------------------------------------------------------------------------------
                                                   California
----------------------------------------------------------------------------------------------------------------
  Santa Cruz        95
                    96               344                                              58     17%
                    97
    Monterey        95
                    96             1,531                                             101      7%
                    97
----------------------------------------------------------------------------------------------------------------
                                                   New Mexico
----------------------------------------------------------------------------------------------------------------
    McKinely        94             3,371   3,168     94%
                    97                                                                84
----------------------------------------------------------------------------------------------------------------
                                                 North Carolina
----------------------------------------------------------------------------------------------------------------
            Lenoir                 4,039     305      8%   1,008     113     11%     186     18%      26     23%
                    96      531
Wayne
                    96      902    6,079     749     12%   1,955     292     15%     231     12%       8      3%
----------------------------------------------------------------------------------------------------------------
                                                 South Carolina
----------------------------------------------------------------------------------------------------------------
        Chas        95               955                      86
                    96               850                                              95     11%
                    97
   Clarendon        95             1,383     690     50%                             136     10%
                    96             1,319                                             180     14%
                    97
    Florence        95             4,096   1,803     44%                             203      5%
                    96             4,199                                             268      6%
                    97
       Horry        95             2,064     745     36%                             338     16%
                    96             1,943                                             217     11%
                    97
            Lee     95               777     319     41%                             106     14%
                    96               833                                             121     15%
                    97
      Sumter        95             1,217     526     43%                             124     10%
                    96             1,247                                             172     14%
                    97
    Williams        95             2,579   1,036     40%                             209      8%
                    96             2,640                                             159      6%
----------------------------------------------------------------------------------------------------------------
                                                   Washington
----------------------------------------------------------------------------------------------------------------
       Adams        95             2,851      13                                       0      0%       0
                    96             2,917       3             724       0      0%       0      0%       0
                    97
      Chelon        95             1,397     449     32%                             353     30%
                    96             1,411     474     34%     472     151     32%      79     10%      27     18%
                    97
     Douglas        95             1,960      10                                     513     30%       0
                    96             1,989       8             579       4             160     10%       2     50%
                    97
       Grant        95             4,048      78      2%                             745     20%      13     17%
                    96             4,205      69      2%   1,224      37      3%     257     10%       8     22%
                    97
    Okanagan        95             1,464      64      4%                             277     20%      14     22%
                    96             1,457      63      4%     737      20      3%     205     14%       0      0%
                    97
      Yakima        95             6,634     201      3%                             752     11%      53     26%
                    96             6,585     311      5%   2,428     157      7%     325      5%      28      9%
----------------------------------------------------------------------------------------------------------------
Compiled by Rural Coalition.

2. Research Findings and Policy Recommendations
    [1] John J. Green, PhD, ``Summary Results from The Financial 
Training Project Assessment Survey: A Report to the Rural Coalition,'' 
Institute for Community-Based Research, Division of Social Sciences/
Center for Community and Economic Development, Delta State University, 
February 2006.
    [2] John J. Green, Lorette Picciano, Heather Fenney, et al., ``The 
Insurance Needs of Traditionally-Underserved Farmers: Framework for a 
Multi-Community Assessment,'' presented at the Annual Meeting of the 
Rural Sociological Society, Montreal, Canada, July 2003.
    [3] Oklahoma Black Historical Research Project, with Rural 
Coalition, et al.,\1\ ``The 100 Summit Report: Addressing the Needs and 
Concerns of the Underserved Minority Family Farming Community,`` 2017.
[Research Findings and Policy Recommendations 1]
Summary Results from the Financial Training Project Assessment Survey_A 
        Report to the Rural Coalition
John J. Green, Ph.D., Institute for Community-Based Research, Division 
of Social Sciences/Center for Community and Economic Development, Delta 
State University

February 2006
Introduction
    Through applied research and input from partner organizations, the 
Rural Coalition recognized a need for financial training that is 
appropriate to the interests and concerns of small-scale, limited 
resource and minority farmers. In collaboration with representatives 
from several diverse community-based organizations, the RC worked to 
develop a training program to improve the risk management strategies 
and record keeping practices of their members and other farmers. 
Following a participatory process of sharing and synthesis of best 
practices, a training curriculum was designed and piloted. Starting in 
fall 2004 and running through mid 2005, eight organizations conducted 
training sessions with farmers from nineteen states.\1\ The curriculum 
begins with basic information on planning, budgeting and the importance 
of keeping receipts, and it culminates with more complex matters such 
as the records needed to file an Internal Revenue Service Schedule F 
Form or complete a Farm Services Agency Farm and Home Plan. A follow-up 
to a previous report from winter 2005, this summary analysis presents 
the results from an assessment survey of training participants.
---------------------------------------------------------------------------
    \1\ These organizations were: Homeworkers Organized for More 
Employment, Intertribal Agriculture Council, Minnesota Farmers 
Association, Minority Agricultural Producers, Operation Spring Plant, 
Rural Advancement Fund, Small Farmers Resource and Training Center, and 
United Farmers.
---------------------------------------------------------------------------
Methods
    At the end of each financial training session, an assessment 
questionnaire was distributed to all participants. Items focused on 
their personal and farm characteristics, risk management strategies and 
perceptions of the training. Data presented in this preliminary report 
were obtained from the survey. The data represent the characteristics 
of those people who participated in the financial training. Although 
this aggregation of samples is not representative of all small-scale, 
limited resource and minority farmers, respondents may represent the 
people most likely to first participate in future programs aimed at 
providing assistance to the traditionally underserved.
    Responses from 1142 participants were entered into SPSS 
(Statistical Package for the Social Sciences), a software program for 
data analysis. It is important to recognize that a few of the training 
sessions used a questionnaire that only had assessment items, and some 
questions were not applicable to all respondents (for example, if the 
participant was a beginning farmer).
Summary Results
Socio-Demographic and Farm Characteristics
    The financial training participants who completed questionnaires 
were from nineteen states: Arizona, California, Florida, Georgia, 
Idaho, Maine, Minnesota, Montana, Nebraska, New Mexico, North Carolina, 
North Dakota, Oregon, South Carolina, Texas, Utah, Washington, 
Wisconsin and Wyoming. Table 1 shows the socio-demographic 
characteristics of training participants. Nearly \1/3\ of the 
participants were women. Black/African American participants 
constituted the largest racial/ethnic group (54.9 percent), followed in 
frequency by American Indians, Hispanics, Whites and Asian Americans 
(primarily Hmong). Almost 30 percent of participants reported their 
highest level of education as being less than high school, while 34.8 
percent reported a high school degree. A combined 35.6 percent reported 
some college, a bachelor's degree or higher.
    Farm income was generally low among the training participants. 
Asked about their total farm income minus expenses in 2003, 54.0 
percent of producers reported less than $5,000. The next largest groups 
were those with total farm incomes between $5,000 and $9,999 (23.5 
percent) and $10,000 and $19,999 (13.9).
    Over \4/5\ of the training participants owned land, and 38.8 
percent rented land (Table 2). Those who reported owning and renting 
land totaled 28.1 percent. The average amount of land in agricultural 
production was 85.2 acres in 2003, and average anticipated land in 
production in 2004 was 87.4. However, the median was 15 acres. This 
substantial difference from the mean suggests a skew in farm sizes 
across the group of participants. The range was over 2,000 acres. Much 
of the variation was due to region of the country and the type of 
production.
    More than \1/2\ of the training participants who reported some type 
of farming activity indicated that they produced commodity crops, 54.6 
percent produced vegetables, and 47.1 raised livestock. Over 14 percent 
of respondents did all three. They produced commodity crops and fruits/
vegetables and raised livestock. Many of the western/southwestern 
respondents grew hay and raised cattle and/or horses, while a majority 
of those from the southeast reported growing vegetables and fruit. The 
most frequently produced vegetables and fruits were watermelon, okra, 
squash, tomatoes, cucumbers and greens.
    Close to 4.7 percent of producers had a risk management plan for 
their farming enterprise (Table 3). A much larger group (42.7 percent) 
of respondents indicated that they used a tax accountant. Only 18.6 
percent reported using the IRS Schedule F Form in their tax 
preparation. Nearly 85 percent of respondents never used crop 
insurance.
    Approximately 18 percent of the farming respondents said that 
someone in their family (in addition to themselves) received wages from 
the farming enterprise (Table 4). Beyond the family, a large majority 
of the respondents did not have full-time (85.4 percent), regular part-
time (80.5) or seasonal/migrant employees (83.6). Almost \1/2\ of the 
16.4 percent who reported seasonal or migrant workers indicated that 
these employees held H-2A Visas/participated in the guest worker 
program. Just over 14 percent of total respondents said they understand 
tax laws for hired farm labor.
    Investigating awareness of government agricultural programs, 
training participants were most familiar with the Cooperative Extension 
Service (58.1 percent). The Farm Services Agency Disaster Program 
(54.4) and FSA Credit Program (52.5) had similar levels of familiarity. 
The Natural Resources Conservation Service (48.7), Rural Development 
(42.0) and Risk Management Agency (35.7) followed in consecutive rank 
order.
    Concerning program participation, over \1/4\ of participants 
reported having ever applied for a loan from the U.S. Department of 
Agriculture (Table 5). Of those, 91.3 percent indicated that they had 
ever been denied a loan, and 32.0 percent of those who ever applied 
also reported having received a loan. Those who had ever been denied 
and those who had ever received a loan often overlapped. Over \1/3\ of 
participants said that they had ever received disaster assistance, 
while a smaller percent participated in annual commodity programs (13.5 
percent) or conservation programs (8.1).
Financial Training Assessment
    Charged with assessment of the financial training sessions, 
participants appeared to be generally pleased with the process and 
curriculum (Table 6). A large majority of respondents agreed/strongly 
agreed that the materials were informative, trainers were helpful and 
the system applied to their needs. Although the group as a whole was 
highly supportive, it is important to point out that a sizable minority 
were not quite sure that they were better prepared to manage the farm 
or prepare tax forms. Provided with the opportunity to list additional 
trainings they would like to participate in, respondents mentioned 
taxes and computer use most frequently.
Summary
    The summary results presented here show that a diverse group of 
farmers participated in the financial record keeping training sessions 
developed and implemented by the Rural Coalition and its partner 
organizations. Similar to the characteristics of those people who were 
involved in prior action research studies headed by the RC,\2\ these 
small-scale, limited resource and minority producers operate a broad 
range of farm types. Furthermore, they are underserved by existing 
programs. Having low incomes, few risk management plans, and limited 
awareness of and participation in government agencies and programs, 
greater attention is needed to better understand and respond to their 
interests and concerns. Services must be provided in culturally 
appropriate ways that also matches farm production and marketing 
characteristics. Training for risk management and financial record 
keeping is one step in the right direction, but there is still much 
work to be done.
---------------------------------------------------------------------------
    \2\ Reports from Rural Coalition action research studies are 
available online at: http://ntweb.deltastate.edu/vp_academic/jgreen/
Research_and_Outreach_Underserved_Farmers.htm.

  Table 1: Socio-Demographic Characteristics of Participants from Rural
            Coalition Financial Training Project (2004/2005)
------------------------------------------------------------------------
                    Characteristic                           Percent
------------------------------------------------------------------------
Gender
  Male                                                              67.5
  Female                                                            32.5
                                                                 (1,048)
Race/Ethnicity
  American Indian                                                   24.8
  Asian American                                                     3.5
  Black/African American                                            54.9
  White                                                              5.0
  Hispanic/Latino                                                   10.7
  Other                                                              1.1
                                                                 (1,052)
Highest Level of Education
  Less than High School Degree                                      29.6
  High School Degree                                                34.8
  Some College, No Bachelor's Degree                                29.6
  Bachelor's Degree or Higher                                        6.0
                                                                 (1,050)
Total Farm Income (after expenses) in 2003
  Less than $4,999                                                  54.0
  $5,000-$9,999                                                     23.5
  $10,000-$19,999                                                   13.9
  $20,000-$29,999                                                    4.3
  $30,000 or More                                                    4.3
                                                                   (814)
------------------------------------------------------------------------


   Table 2: Farm Characteristics of Participants from Rural Coalition
                 Financial Training Project (2004/2005)
------------------------------------------------------------------------
                    Characteristic                           Percent
------------------------------------------------------------------------
Own Land                                                            84.5
                                                             (911/1,078)
Rent Land from Others                                               38.8
                                                             (409/1,053)
Own and Rent Land                                                   28.1
                                                             (295/1,048)
Acres in agricultural production in 2003 *
  Mean                                                              85.2
  Median                                                            15.0
  Minimum-Maximum                                                0-2,400
                                                                   (937)
Acres in agricultural production in 2004 *
  Mean                                                              87.4
  Median                                                            15.0
  Minimum-Maximum                                                0-2,600
                                                                   (935)
Produced Commodity Crops in 2003 or 2004                            54.5
                                                             (561/1,030)
Produced Fruits/Vegetables in 2003 or 2004                          54.6
                                                             (553/1,013)
Raised Livestock in 2003 or 2004                                    47.1
                                                             (480/1,020)
Produced Commodity Crops, Fruits/Vegetables and                     14.3
 Livestock in 2003 or 2004
                                                               (137/960)
------------------------------------------------------------------------
* Ranchers often did not include grazing acreage in their estimates of
  land in agricultural production. Therefore, the numbers presented here
  are conservative estimates.


Table 3: Risk Management Strategies of Participants from Rural Coalition
                 Financial Training Project (2004/2005)
------------------------------------------------------------------------
               Risk Management Strategy                      Percent
------------------------------------------------------------------------
Have Risk Management Plan                                            4.7
                                                                (45/961)
Use a Tax Accountant                                                42.7
                                                             (439/1,029)
Make Use of IRS Form Schedule F                                     18.6
                                                               (165/886)
Ever Purchased Crop Insurance
  Yes, Currently Have Policy                                         9.6
  Yes, But No Current Policy                                         5.8
  No, Never                                                         84.6
                                                                   (971)
------------------------------------------------------------------------


    Table 4: Labor Use of Participants from Rural Coalition Financial
                      Training Project (2004/2005)
------------------------------------------------------------------------
               Risk Management Strategy                      Percent
------------------------------------------------------------------------
Spouse, Children or Other Family Members Receive Wages              17.7
 from Farm
                                                               (154/869)
Number of Full-Time Employees
  None                                                              85.4
  1-10                                                              14.0
  11-20                                                              0.3
  21 or More                                                         0.3
                                                                   (988)
Number of Regular Part-Time Employees
  None                                                              80.6
  1-10                                                              17.9
  11-20                                                              0.9
  21 or More                                                         0.6
                                                                   (987)
Employed any Seasonal or Migrant Employees in the Past              16.4
 Year
                                                               (127/773)
  Any Seasonal or Migrant Employees Participate in H-               50.4
   2A Program
                                                                (64/127)
Understand Tax Rules for Farm Labor                                 14.5
                                                               (126/870)
------------------------------------------------------------------------


  Table 5: Awareness of and Participation in Government Programs Among
Participants from Rural Coalition Financial Training Project (2004/2005)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Agency/Program                                             Percent Aware
------------------------------------------------------------------------
Farm Services Agency Credit Programs                                52.5
                                                             (533/1,015)
Farm Services Agency Disaster Payments                              54.4
                                                               (522/959)
Natural Resources Conservation Service                              48.7
                                                               (465/955)
Cooperative Extension Service                                       58.1
                                                               (567/976)
Rural Development                                                   42.0
                                                               (400/953)
Risk Management Agency                                              35.7
                                                               (335/939)
------------------------------------------------------------------------
Program                                                          Program
                                                           Participation
------------------------------------------------------------------------
Ever Applied for a Loan from USDA                                   27.9
                                                               (234/839)
  Ever Been Denied a Loan from USDA                                 91.3
                                                               (210/230)
  Ever Received a Loan from USDA                                    32.0
                                                                (72/225)
Ever Received USDA Disaster Assistance                              36.2
                                                               (354/977)
Participate in any Annual Commodity Program                         13.5
                                                               (113/839)
Participate in any Conservation Program                              8.1
                                                              (84/1,040)
------------------------------------------------------------------------


   Table 6: Participant Rating of Financial Recording Keeping Training
     Session--Rural Coalition Financial Training Project (2004/2005)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Statement                Strongly     Disagree        Agree     Strongly
                         Disagree                                  Agree
------------------------------------------------------------------------
Materials were                2.2          3.3         57.5         37.0
 informative (1,020)
Trainers were                 1.6          4.7         52.4         41.3
 helpful (1,023)
Training related to           1.5          7.2         58.7         32.6
 my specific needs
 (1,013)
I am better prepared          2.2         13.9         53.8         30.1
 to manage my farm
 (1,007)
I am better prepared          3.6         16.6         53.4         26.4
 to complete tax
 forms (1,010)
Overall, the                  2.0          4.0         56.4         37.6
 training was
 helpful (1,019)
I would recommend             2.3          2.8         45.8         49.1
 the training to
 others (1,017)
------------------------------------------------------------------------
Statement             Not Helpful     A Little      Helpful         Very
                                       Helpful                   Helpful
------------------------------------------------------------------------
Discussion of the             0.6          6.5         54.5         38.4
 importance of
 keeping records
 (1,008)
Concepts and                  1.2         12.1         55.2         31.5
 definitions (1,003)
What records to keep          0.9         11.3         51.1         36.7
 and how to do it
 (1,001)
Exercises and                 1.2         13.2         53.1         32.5
 examples (993)
Record keeping                1.3          9.7         55.1         33.9
 worksheets (1,003)
------------------------------------------------------------------------

[Research Findings and Policy Recommendations 2]
The Insurance Needs of Traditionally-Underserved Farmers: Framework for 
        a Multi-Community Assessment
John J. Green, Lorette Picciano, Heather Fenney and Christopher Pope *
---------------------------------------------------------------------------
    * John J. Green and Christopher Pope are associated with the 
Institute for Community-Based Research (Center for Community 
Development, Delta State University). Lorette Picciano is Executive 
Director of the Rural Coalition. Heather Fenney, former Food and Farm 
Policy Coordinator for the Rural Coalition, works with the Community 
Food Security Coalition.
    For more information, contact: John J. Green, Ph.D., Division of 
Social Sciences, 201B Kethley Hall, Delta State University, Cleveland, 
MS 38733.
    E-mail: [email protected].

Paper to be Presented at the Annual Meeting of the Rural Sociological 
---------------------------------------------------------------------------
Society, Montreal, Canada

July 2003

          The insurance needs of individuals, families and their 
        businesses are of critical importance for livelihood security. 
        Although often overlooked in community and economic development 
        initiatives, small-scale, limited resource and minority farmers 
        are continuously faced with the challenge of finding strategies 
        to manage risks in the realms of agricultural production, 
        marketing and everyday life. In an attempt to address this 
        issue, a community-based research effort--including partner 
        organizations from across the United States--was established to 
        collect survey data concerning the risk management and 
        insurance needs of traditionally-underserved populations. The 
        information garnered from the research will be used to inform 
        the development of a model cooperative insurance program. This 
        paper reviews the position of traditionally-underserved 
        farmers, discusses the theoretical framework of community-based 
        research and describes the methods utilized for this ongoing 
        study. Preliminary research findings are shared for 
        illustrative purposes.

          Draft Paper for Presentation--Do Not Cite Without Permission
Introduction: The Position of Traditionally-Underserved Farmers
    The dominant political economic system is characterized by further 
industrialization and expansion of free market relations. This entails 
a continued push by corporate firms to harmonize socioeconomic policies 
and create a global playing field conducive to capital mobility and 
accumulation. These developments are taking place within the agrifood 
sector in conjunction with a shift in the dominant system from 
protection of national agricultures supported under the ``development 
project'' to further free trade promoted as part of the ``globalization 
project'' (McMichael 1996). Strategies include the creation of ``food 
chain clusters'' through horizontal and vertical integration of 
agribusiness firms to control food from the gene to the store shelf 
(Heffernan 2000; Heffernan, et al., 1999; Hendrickson, et al., 2001). 
These changes come at a significant cost to agricultural producers as 
they are exposed to international competition, removal of government 
protections and increasing corporate control over decision making. 
Within this process there are winners and losers, with small, limited 
resource and minority farmers facing intense pressure.\1\
---------------------------------------------------------------------------
    \1\ There are a variety of labels used in reference to such 
farmers. Although the term ``small farmer'' is typically used as a part 
of mainstream nomenclature, the label only differentiates along lines 
of scale and often structure (i.e., ``small farmer'' usually, but not 
always, implies ``small family farmer''). The term ``limited resource 
farmer'' refers to producers who have both low farm sales and low 
overall household income, and ``minority'' is typically used in 
reference to traditional ethnic and racial groupings. These labels are 
often used in reference to ``socially disadvantaged farmers,'' defined 
by the U.S. Department of Agriculture as those farmers historically 
subjected to prejudice because of their membership in a particular 
group, by race and ethnicity. Also sometimes included in this realm are 
women producers. In this paper, we use ``small, limited resource and 
minority farmers'' in reference to all of these groups, recognizing 
both their similarities and differences. The term ``traditionally-
underserved'' is used in reference to the fact that these producers 
have been disadvantaged by dominant social institutions.
---------------------------------------------------------------------------
    There are many facets of the dominant agrifood system that have 
presented challenges to these producers throughout recent history. In 
the past, the exploiter (such as a large-scale landowner, merchant or 
local banker) was typically located in the community or, at the least, 
had a recognizable identity (e.g., the railroad). However, dominant/
subordinate relations in the global era are increasingly separated 
spatially as economic management occurs at higher levels, is abstracted 
and made to appear ``natural.'' Globalization, however, does not 
necessarily equate with the removal or even scaling-up of national 
challenges. Rather, complex interactions take place and problems are 
often compounded, with those groups who historically bore the greatest 
burdens being placed in even more problematic positions.
    Synthesis of research endeavors (e.g., Dismukes, et al., 1997; 
Federation of Southern Cooperatives 2000; General Accounting Office 
2001; Gilbert, et al., 2001; Green and Picciano 2002; Grim 1996; Jones 
1994; Wood and Gilbert 1998) supports the argument that small, limited 
resource and minority farmers face a variety of challenges, some of 
which are inherent to farming and others which result more from social 
inequality. Challenges include environmental production constraints 
such as low soil fertility and disasters (e.g., floods and droughts) 
which are partially attributable to these producers' disproportionate 
reliance on relatively small and often marginal landholdings. Also 
problematic are constraints to landholding, including high land prices, 
loan interest rates and property taxes, and predatory actions by other 
farmers and commercial lenders. Additionally, limited financial 
resources and restricted access to markets and subjugation to low 
prices are troubling. More specific to group identity,

          American Indian and Alaskan Native producers face challenges 
        coupled with the complexities of dealing with the myriad of 
        Federal bureaucracies involved in the governance and control of 
        Tribal lands and resources. In addition, Indian producers have 
        been specifically excluded from resources and support afforded 
        other producers.
          A large proportion of the nation's remaining Black/African 
        American producers have faced tremendous barriers to 
        maintaining their operations. From slavery to the 1999 
        settlement of the Pigford v. Glickman class action lawsuit, 
        these producers have struggled with discrimination at the 
        personal and institutional levels.
          During the early 1940s the now infamous ``Bracero Program'' 
        brought in Mexican farm laborers to work in fields across the 
        country. After termination of the program, farmwork continued 
        to be performed by immigrants and migrants. Many of them have 
        attempted to obtain a more secure position in agriculture 
        through operation of their own farms. Within the last 5 years 
        they have become one of the fastest growing groups of small 
        farmers. They have used their hard earned money to buy some 
        acreage for farming, all the while maintaining other jobs.
          Following the Vietnam War, immigrants from Southeast Asia 
        included a large sector of Hmong people. Hundreds of new Hmong 
        producers have entered agricultural production in the United 
        States. Although they have survived, these producers often face 
        barriers related to their minority status in an often hostile 
        environment.

    Small, limited resource and minority farmers have faced many 
challenges in the structure of the dominant agrifood system. 
Furthermore, they have been underserved by the institutions supposed to 
mediate between the macro-level of global, regional and national 
political economic forces and the micro-level of everyday life. For 
instance, government agencies such as the United States Department of 
Agriculture (USDA) have made few authentic attempts to assist these 
producers in mitigating challenges or taking advantage of new 
opportunities.
    Although the Federal and state governments have developed numerous 
programs to assist farmers, much of their work has followed a highly 
problematic and biased path. A variety of barriers keep these farmers 
from fully participating and/or receiving the benefit of potentially 
helpful programs. Problems include agencies' preferential attention to 
large-scale producers employing technologically complex and capital 
intensive strategies, personal and institutional discrimination, and 
insufficient outreach.
    Dismissal and outright hostility toward these producers has led to 
skepticism on the part of farmers concerning government agricultural 
programs and agency personnel (Grim 1996). Farmers are also often 
confused by the different agencies and programs that exist. Given past 
experience, it is generally expected that without targeted research, 
outreach and advocacy efforts, these groups will continue to under-
participate in government programs and continue to be lost, thereby 
offsetting hard won gains.
    A recent focus group project (Green and Picciano 2002) involving 
farmers in fourteen communities across the United States asked 
participants about their familiarity with various programs and 
services. The 130 focus group participants indicated the most 
familiarity with Cooperative Extension, their respective State 
Department of Agriculture, Farm Services Agency (FSA) (credit programs 
and farm and disaster programs) and the Natural Resources Conservation 
Service (NRCS). Some of the lowest levels of awareness were reported 
for Soil and Water Conservation District Boards and FSA County 
Committees. There were numerous instances where focus group 
participants had not taken part in the programs offered by these 
agencies. Less than \1/4\ of the participants had ever received a loan 
through USDA, and over 30 percent reported having been denied such a 
loan. Thirty-two percent of focus group participants indicated that 
they had ever received USDA Disaster Assistance. Even fewer reported 
participation in annual commodity programs.
    While there has been much research attention directed toward 
inequality in government policy and programs, less interest has been 
directed toward other arenas of activity of concern for small, limited 
resource and minority farmers. Still, rural sociologists have directed 
attention toward the political economy of credit (Mooney 1986), a 
crucial aspect of agriculture. Unfortunately, few researchers have 
turned their attention to the insurance needs of these traditionally 
underserved farmers.\2\
---------------------------------------------------------------------------
    \2\ Economists have conducted research on the role of crop 
insurance in risk management (e.g., Harwood, et al., 1999; Makki and 
Somwaru 2001). Much of this work, however, narrowly assesses farmer 
selection of and participation in crop insurance markets. What is 
needed is a more general and critical assessment of traditionally-
underserved farmers and their relationship to insurance as an 
institution.
---------------------------------------------------------------------------
    Risk has always been a part of the agricultural business. Widely 
considered an important aspect of risk management, crop, liability, 
health, disability and life insurance are sometimes seen as luxuries 
for the small farmer. Just as they tend to be ignored by the banking 
community, small farmers are often overlooked by insurance companies 
and agents. This is particularly problematic given the ever-expanding 
focus on insurance as a risk management tool under the auspices of 
advanced capitalism. Furthermore, the increased control awarded to for-
profit insurance companies with the Federal Government's partial 
privatization of crop insurance programs is of concern.
    The industry cites perceived barriers to serving small, limited 
resource and minority farmers. These include: (1) the smaller the 
acreage the less profitability for the insurance agency, (2) the lack 
of multilingual and multicultural employees to deal with new markets, 
(3) the lack of available agents to serve culturally diverse and 
regionally isolated populations (e.g., new immigrants, or producers on 
isolated Tribal lands), and (4) the complexity of the insurance 
business for the average person due to the required paperwork and 
expertise.
    Interestingly, agricultural producers offer a somewhat different 
view of participation/nonparticipation in insurance. The previously 
cited focus group project (Green 2002; Green and Picciano 2002) 
involved a discussion of crop insurance. Producers said that although 
they recognized insurance as an important risk management tool, they 
either knew very little about the system, insurance was too costly or 
it was inappropriate for their type of farm. Concerning the latter, 
participants reported that they did not have a large enough farm, their 
level of production was insufficient or what they produced was not 
covered under most policies. Further discussion revealed their support 
for crop insurance in general, but only with the caveat that vast 
improvements are needed.
    It is worth noting that insurance as a risk management tool is 
important for agricultural producers beyond crop or whole farm 
insurance. Similar to the situation faced by individuals and families 
in general (including those operating family businesses), small, 
limited resource and minority farmers must also consider how to address 
issues of liability insurance, car insurance, health and life 
insurance.\3\
---------------------------------------------------------------------------
    \3\ Health coverage was once part of the New Deal programming 
channeled through the USDA. From 1932 to 1947, the Farm Security 
Administration sponsored comprehensive medical care for poor farmers, 
sharecroppers and migrant workers (Grey 1994).
---------------------------------------------------------------------------
    Despite the many hardships that exist, these farmers continue to 
struggle forward. Considered together as a diverse group of 
traditionally-underserved farmers, they have already overcome great 
odds to remain in agriculture and on the land. Dedicated to cooperative 
ideals in the effort to improve their livelihood security, many 
individuals and groups have the potential to revive their historic 
connection. Small businesses in agriculture are likely to become more 
diverse if they are able to develop assets to address the many historic 
barriers that have served to exclude them from the economic benefits 
available to their more powerful counterparts. Their ability to do so 
is important not just for them, but for the sustainable development of 
their communities (Clancy, et al., 2003).
    Community-based organizations, including nonprofits and 
cooperatives, have long attempted to fill the gap in providing 
assistance to traditionally-underserved producers, and they have been 
successful in many cases. However, in order to further impact the 
viability of these farms over the long-run, it will be necessary for 
organizations to work together and with government agencies in the 
development and implementation of programs based on their actual needs 
and interests.
Community-Based Research for Developing a Cooperative Model
    Recognizing this need, the Rural Coalition, several of its member 
groups and University researchers are involved in a collaborative 
project to identify the current situation faced by these producers in 
respect to risk management and insurance. This is being done using the 
community-based research model.
    Community-based research is a framework for pursuit of grassroots 
empowerment. It brings together those research approaches described as 
``participatory'' and ``action'' oriented in nature (e.g., Chambers, et 
al., 1989; Reason and Bradbury 2001; Selener 1997; Stringer 1999; Voth 
1979). Building from an assorted background of theory and method, these 
various approaches share several common principles, including 
collaboration through meaningful participation, acquisition of 
knowledge and pursuit of social change (Reason and Bradbury 2001). The 
primary goal of such research is to generate knowledge and thereby 
redistribute power (Selener 1997).
    According to Ernest Stringer's interpretation and synthesis of the 
framework, community-based research consists of three primary 
components in a cyclical and dialectic relationship: (1) look, (2) 
think and (3) act. At the looking stage, research participants are 
invited to witness the world around them by gathering data, defining 
issues of importance and describing them in an effort to construct 
``pictures'' of the community. The thinking stage calls for 
exploration, analysis and interpretation of these pictures for the 
purpose of explaining the state of the world and developing theories to 
effectively inform action. This action may entail reporting research 
findings as well as planning, implementing and evaluating programs of 
social change. Over the course of any particular attempt to address a 
social issue, it is assumed that this cycle will be repeated over and 
again, each time spiraling to a heightened level of collective 
consciousness and efficacy.
    The Rural Coalition--a nonprofit organization providing advocacy, 
outreach and technical assistance to community-based organizations in 
the United States and Mexico--is working with several groups to conduct 
an in-depth survey of traditionally-underserved farmers on their 
socioeconomic background, farm characteristics and economic situation, 
with special attention to their use of insurance. This effort 
explicitly builds from a past project to better understand the concerns 
and interests of these agricultural producers to help inform 
policymaking and program development (Green 2001; Green and Picciano 
2002). Project partners include the following organizations.

          CASA del Llano is a community-based organization working with 
        two unincorporated Colonias near Hereford, Texas. The 
        organization consists of members from these Colonias and 
        members of a church community with a volunteer staff serving as 
        an Advisory Board. The project initiated from The Promised Land 
        Network, an ecumenical rural ministry dedicated to shaping 
        southern plains agriculture and communities toward 
        sustainability based on sound land stewardship and ethical 
        principles. The program serves Latino farmers and new entry 
        immigrant produces.
          Growing Power is a not-for-profit organization and land trust 
        supporting people from diverse backgrounds and the environment 
        they live in through the development of community food systems. 
        Growing Power serves the nation through three offices in 
        Alaska, where it assists Alaska Native producers, and Wisconsin 
        and Illinois, where it serves diverse urban producers. Growing 
        Power seeks to develop and preserve resources and programs that 
        support community self reliant food systems through education, 
        conservation, networking, advocacy, marketing, growing and 
        processing.
          Homeworkers Organized for More Employment (HOME), a 
        cooperative community in Orland, Maine dedicated to economic 
        and social reconstruction, began as an outlet for homeworkers' 
        crafts and has expanded to include pottery, leather and weaving 
        shops, greenhouse gardens, a farmers market and a sawmill/
        shingle mill.
          The Minnesota Food Association (MFA) is a statewide nonprofit 
        organization with members who represent urban and rural 
        perspectives, various income levels and many different 
        interests. Its mission is to form a coalition of informed, 
        connected and active people to work together to build a more 
        sustainable food system. Over the last several years, the 
        Minnesota Food Association has been working to develop 
        comprehensive strategies to address economic, health, safety 
        and nutrition concerns related to food production and 
        agriculture for new immigrant residents in Minnesota. This 
        long-term project has helped to educate new immigrant farmers 
        on many aspects of agriculture, as well as to assist them in 
        becoming a permanent part of the rural economy.
          Operation Spring Plant (OSP) is a grassroots organization 
        started and operated by farmers in North Carolina. OSP serves 
        small, limited resource and African America producers through 
        technical assistance workshops and training; developing on-farm 
        demonstration projects that focus attention on modern and 
        sustainable production techniques; owning and operating a 
        retail marketing facility for farm and agribusiness products; 
        and assisting area farmers through financial hardships. OSP has 
        been very active in advocating for the civil rights of Black 
        farmers. The organization also operates a Harvest for the 
        Hungry Program that provides food for low-income people.
          Rural Advancement Fund of the National Sharecroppers Fund 
        (RAF-NSF), founded in 1937, is based in Orangeburg, South 
        Carolina and works to uplift small, primarily African American 
        farmers and rural organizations in North and South Carolina. 
        RAF provides training and one-on-one technical assistance in 
        crop selection, management, cash flow analysis and loan 
        packaging, crop diversification and marketing.
          Rural Community Development Resources, based in Yakima, 
        Washington, has helped over 100 limited resource Hispanic 
        producers enter agriculture and build successful collaborative 
        businesses. RCDR administers a revolving loan fund for its 
        members and is training them in the formation of cooperatives. 
        It assists them in qualifying for loans and completing USDA 
        farm and home plans. With support from the USDA Minority Farm 
        Outreach Program, RCDR now reaches more than 190 farmers with 
        technical assistance and other support.
          Institute for Community-Based Research (Center for Community 
        Development, Delta State University) works with nonprofit 
        organizations and cooperatives to assist in the design, 
        implementation, and analysis of research in pursuit of 
        livelihood security and improved quality of life. Substantive 
        areas of focus include: (1) underemployment and persistent 
        poverty, (2) environment, health and food security, and (3) 
        organizing cooperative alternatives. Housed within the Center 
        for Community Development at Delta State University, the 
        Institute is closely affiliated with the Division of Social 
        Sciences. A central component of this effort is to provide an 
        avenue through which DSU students, especially those pursuing a 
        Master of Science degree in Community Development, are able to 
        collaborate with faculty and communities to engage in timely 
        and meaningful research.

    The objectives of this collaborative project include:

  (1)  Strengthening the capacity of the community-based organizations 
            to meet their members' needs by expanding their knowledge 
            and understanding of how insurance works and the structure 
            of the industry.

  (2)  Ensuring the risk management needs of small, limited resource 
            and minority producers are equitably met by developing new 
            strategies to improve the content, marketing and delivery 
            of appropriate insurance products.

  (3)  Developing and testing the feasibility of a model cooperative 
            business venturethat recognizes the value of community-
            based organizations and providesappropriate incentives to 
            secure their equitable participation in the delivery 
            ofinsurance and other risk management tools.

  (4)  Sharing project results with the participating groups and 
            familiarizing them with insurance, how it works and ways to 
            use insurance tools to increase the livelihood security of 
            traditionally-underserved farmers and invest in their 
            communities.

    Research partners have worked together to develop the survey 
instrument, construct guidelines for selecting samples, collect data 
and analyze results. After several drafts of the questionnaire had been 
circulated and revised, the partners met in Washington, D.C. to review 
the document and participate in an interviewer training workshop. 
Following this meeting, changes were made to the data collection 
instrument.
    With the final version of the survey in hand, individuals from the 
community-based organizations began selecting agricultural producers to 
interview. Because this project is focused on improving access to risk 
management services for traditionally-underserved populations in an 
applied and strategic manner, a purposive systematic sampling strategy 
was utilized. Use of this technique was also justified on the basis of 
the project being exploratory in nature. A list of qualifying criteria 
was used in selecting purposive samples in each of the six communities 
where surveys were to be conducted (see Appendix for sampling 
criteria).
    The organizations agreed to complete a minimum of thirty surveys. 
Four of the six groups involved in collecting data had met this 
threshold by the time of submitting this paper (June 2003). Two of the 
groups are still in the process of conducting interviews. (See Appendix 
for preliminary survey results). Future analysis will involve aggregate 
and across group descriptive statistics. Also, nonparametric 
statistical strategies will be utilized for group comparisons and to 
identify the relationships between farmers, their communities and 
insurance needs and interests.
    During the same time period as the survey has been developed and 
implemented, partners have been participating in crop insurance 
training sessions to better understand the industry and the types of 
alternatives to traditional insurance programs that could be created. 
This will help to inform the construction of more applicable and 
targeted insurance packages and cooperative models of delivery. In 
conjunction with the Rural Coalition, Rural Development Resources is 
developing model business plans for cooperative insurance ventures to 
help better serve small, limited resource and minority producers. These 
business plans will then be taken back to partner organizations for 
review and revision before being presented to RMA for possible test 
implementation.
Discussion
    This paper argues that small, limited resource and minority farmers 
have been underserved by social institutions important to mediating the 
pressures of larger scale forces (e.g., market control by agribusiness, 
harmonization of national agricultural policies, and adverse 
environmental conditions). Relative to larger, capital-intensive and 
corporate controlled entities, these producers have faced inequality in 
accessing markets, long and short-term capital, government outreach and 
technical assistance. With the ever increasing role of insurance in 
managing risk, traditionally-underserved farmers face additional 
challenges, such as limited access to applicable information, insurance 
companies and policies that are not responsive to their needs, and cost 
prohibitions.
    Although these are difficult challenges, the collaborative partners 
in this project, led by the Rural Coalition, are utilizing community-
based research to inform program planning, implementation and 
evaluation. They are in the process of identifying and documenting the 
needs and interests of traditionally-underserved farmers in regard to 
insurance. This information is being used in the development of a 
cooperative approach to managing risk that benefits the participants, 
their organizations and communities.

 
 
 
                               References
 
    Chambers, R., A. Pacey and L.A. Thrupp. 1989. Farmer First: Farmer
 Innovation and Agricultural Research. London, UK: Intermediate
 Technology Publications.
    Clancy, K., S. Grow and L. Oberholtzer. 2003. Agriculture as a Tool
 for Rural Development: Workshop Proceedings. Henry A. Wallace Center
 for Agricultural and Environmental Policy.
    Dismukes, R., J.L. Harwood and S.E. Bentley. 1997. ``Characteristics
 and Risk Management Needs of Socially Disadvantaged Farmers.''
 Washington, D.C.: United States Department of Agriculture.
    General Accounting Office. 2001. Farm Programs: Information on
 Recipients of Federal Payments. Washington, D.C.
    Federation of Southern Cooperatives/Land Assistance Fund. 2000.
 ``Risk Management Survey of African American Farmers: Preliminary
 Findings.'' East Point, GA: Federation of Southern Cooperatives/Land
 Assistance Fund.
    Gilbert, J., G. Sharp and M.S. Felin. 2001. ``The Decline (and
 Revival?) of Black Farmers and Rural Landowners: A Review of the
 Research Literature.'' Madison, WI: Land Tenure Center, University of
 Wisconsin.
    Green, J.J. 2002. ``Statement on the Implementation of Title I of
 the Agricultural Risk Protection Act with Respect to the Needs of
 Socially Disadvantaged and Other Limited Resource Producers.'' U.S.
 House of Representatives Committee on Agriculture, Subcommittee on
 General Farm Commodities and Risk Management.
    Green, J.J. and L. Picciano. 2002. ``Amplifying the Voices of
 Community-Based Organizations through Action Research: Obtaining Input
 from the Grassroots on Agricultural Policies and Programs.'' Paper
 Presented at the Annual Meeting of the Community Development Society,
 Cleveland, MS.
    Grey, M.R. 1994. ``The Medical Care Programs of the Farm Security
 Administration, 1932 through 1947: A Rehearsal for National Health
 Insurance.'' American Journal of Public Health 84(10): 1678-1687,
    Grim, V. 1996. Black participation in the Farmers Home
 Administration and Agricultural Stabilization and Conservation Service,
 1964-1990. Agricultural History 70(2): 321-336.
    Harwood, J., R. Heifner, K. Coble, J. Perry and A. Somwaru. 1999.
 Managing Risk in Farming: Concepts, Research and Analysis. Washington,
 D.C.: Economic Research Service, United States Department of
 Agriculture.
    Heffernan, W.D. 2000. ``Concentration of Ownership and Control in
 Agriculture.'' Pp. 61-75 in F. Magdoff, J.B. Foster and F.H. Buttel
 (eds.) Hungry for Profit: The Agribusiness Threat to Farmers, Food, and
 the Environment. New York, NY: Monthly Review Press.
    Heffernan, W., M. Hendrickson, and R. Gronski. 1999. ``Consolidation
 in the Food and Agriculture System.'' National Farmers Union.
    Hendrickson, M.K. and W.D. Heffernan. 2001. ``Opening Spaces through
 Relocalization: Opportunities Provided by the Failures of the
 Globalized Industrialized Food System.'' Paper Presented at Workshop
 for Rethinking Food Production--Consumption: Integrative Perspectives
 on Agrarian Restructuring, Agro-Food Networks and Food Politics. Santa
 Cruz, CA.
    Hendrickson, M.K., W. Heffernan, P. Howard, and J. Heffernan. 2001.
 ``Consolidation in Food Retailing and Dairy: Implications for Farmers
 and Consumers.'' National Farmers Union.
    Jones, H.S. 1994. ``Federal Agricultural Policies: Do Black Farm
 Operators Benefit?'' The Review of Black Political Economy 22(4): 25-
 50.
    Makki, S.S. and A. Samwaru. 2001. ``Evidence of Adverse Selection in
 Crop Insurance Markets.'' The Journal of Risk and Insurance 68(4): 685-
 708.
    Mooney, P.H. 1986. ``The Political Economy of Credit in American
 Agriculture.'' Rural Sociology 51(4): 449-470.
    McMichael, P. 1996. ``Globalization: Myths and Realities.'' Rural
 Sociology 61(1): 25-55.
    Reason, P. and H. Bradbury (eds.). 2001. Handbook of Action
 Research: Participative Inquiry and Practice. London, UK: Sage
 Publications.
    Selener, D. 1997. Participatory Action Research and Social Change.
 Ithaca, NY: Cornell University.
    Stringer, E.T. 1999. Action Research. Thousand Oaks, CA: Sage
 Publications.
    Voth, D.E. 1979. ``Social Action Research in Community
 Development.'' Pp. 67-81 in E.J. Blakely (ed.) Community Development
 Research: Concepts, Issues, and Strategies. New York, NY: Human
 Sciences Press.
    Wood, S.D. and J. Gilbert. 1998. ``Re-entering African-American
 Farmers: Recent Trends and a Policy Rationale.'' Madison, WI: Land
 Tenure Center, University of Wisconsin.
 

Appendix A: Survey Recruitment Guidelines
    The following guidelines were used in selecting and recruiting 
people to complete surveys on the Risk Management and Insurance Needs 
of Small, Limited Resource and Minority Farmers.

  (1)  Survey participants must be:

        Farmers or ranchers (established or entering) who were involved 
            in agriculture during the year 2002.

  (2)  Survey participants should reflect the composition of the 
            constituency your organization serves.

        Attention should be given to recruiting survey participants 
            that generally represent your organization's constituency, 
            including ethnicity and race.
        Survey participants do not have to be formal members of your 
            organization. If possible, a minimum of half the 
            participants should be nonmembers.

  (3)  Survey participants should include gender diversity.

        A serious attempt is needed to find and survey women farmers as 
            a part of this project.

  (4)  Survey participants should include age diversity.

        A serious attempt is needed to find and survey farmers of 
            various ages eighteen years and above.

  (5)  Survey participants should not be recruited based on existing 
            knowledge of their operation or past involvement with crop 
            insurance.
Appendix B: Preliminary Results from Rural Coalition Survey on the Risk 
        Management and Insurance Needs of Small, Limited Resource and 
        Minority Farmers
Meeting the Risk Management and Insurance Needs of Small, Limited 
        Resource And Minority Farmers
2003 Survey
    The following tables were constructed using data collected in the 
2003 survey on the risk management and insurance needs of small, 
limited resource and minority farmers. This survey was developed and 
implemented by the Rural Coalition and its partners, including: CASA 
del Llano, Growing Power, Homeworkers Organized for More Employment 
(HOME), Minnesota Food Association (MFA), Operation Spring Plant, and 
Rural Advancement Fund (RAF). The Institute for Community-Based 
Research (Center for Community Development, Delta State University) is 
a collaborating partner, and Rural Community Development Resources will 
utilize data in cooperative business plan development.
    Four of the six groups collecting data have completed their work. 
However, two of the groups are still engaged in this process. 
Therefore, the data presented in the following tables represent 
preliminary results in aggregate form. No group comparisons are made.*
---------------------------------------------------------------------------
    * Editor's note: Appendix B of the report entitled, The Insurance 
Needs of Traditionally-Underserved Farmers: Framework for a Multi-
Community Assessment, as submitted by the Rural Coalition/Coalicion 
Rural for the March 25, 2021 hearing is incomplete (there are no 
corresponding tables of data tables). It has reproduced herein as it 
was submitted.
---------------------------------------------------------------------------
    Funding for this project was provided by the Risk Management 
Agency, US Department of Agriculture. The findings presented here do 
not necessarily represent the views of this agency.
[Research Findings and Policy Recommendations 3]


Oklahoma Black Historical Research Project, Inc., 3506 N. Forest Park 
Drive, Oklahoma City, Oklahoma 73121-2238, (405) 201-6624, 
[email protected]
100 Farmers Summit Report_Addressing the Needs and Concerns of the 
        Underserved Minority Family Farming Community
March 16-17, 2017
Oklahoma City, OK

          Produced by the Oklahoma Black Historical Research Project
          In cooperation with the Rural Coalition
          And the Scholars of the American University School of 
        International Service 2017 Farm Bill Practicum

July 3, 2017

    Dear 100 Farmers Summit Participants:

    On behalf of Oklahoma Black Historical Research Project, I want to 
thank each and every one of you for contributing your wisdom, insights 
and experience to our March 2017 100 Farmers Summit We also thank the 
Socially Disadvantaged Farmers and Ranchers Policy Research Center, our 
Speakers, and our small group session leaders for their assistance. And 
we thank the scholars of the American University School of 
International Service 2017 Farm Bill Practicum taking notes and Rural 
Coalition for compiling this report of our proceedings.
    We now present to you this report which summarizes the findings and 
recommendations of producers representing farmers, Community Based 
Organizations and 1890 leaders. We believe we successfully met our goal 
of directly engaging farmers in identifying what changes they need at 
the farm level to make agriculture program better serve their needs and 
help them build their local economies.
    The process we employed included three elements:

  (1)  Brainstorm needs and concerns of historically-underserved 
            farmers.

  (2)  Record the major needs, concerns, recommendations and solutions 
            presented.

  (3)  Develop a document with compiled results for review and 
            endorsement of each represented community-based 
            organizations' president or representative.
    We look forward to engaging our historic producers to build our 
power anew in this current political climate. We will cooperatively 
translate our ideas and proposals into policy and programs that serve 
our needs and allow us to build a prosperous and sustainable future for 
our communities.
            Respectfully submitted,
            
            
Willard Tillman, Executive Director,
Oklahoma Black Historical Research Project, Inc.
Table of Contents
    I. Introduction
    II. Issues, Needs and Concerns of Socially Disadvantaged Farmers 
    and Ranchers
    III. Solutions: Building Resourceful and Ready Farmers and 
    Communities
    IV. Policy Proposals for Statutory and Administrative Change
    V. Proposals on Strategy
    VI. Conclusion
I. Introduction
    The meeting was opened with a welcome by Oklahoma Black Historical 
Research Project Executive Director Willard Tillman. He provided a 
brief introduction to the history of the 100 Farmers Summit, followed 
by an introductions icebreaker.
    Former United States Department of Agriculture (USDA) Secretary 
Mike Espy, PLLC, presented the keynote address ``Improving Success of 
Socially Disadvantaged Farmers and Ranchers Through Policy.'' He 
provided a brief overview of the challenge presented by the recently 
released Administration budget, noting that it contains 21% cut in 
funding to the Department of Agriculture, with risks for nutrition and 
other programs. He pointed out that African American producers had 
survived administrative racism and discrimination, drought and many 
other challenges, some of which were summarized in the DJ Miller report 
(year). That report, the purposes of which was to determine if minority 
farmers were denied credit found that the top 1% of loans went to 65% 
of corporate farms and white male farmers. Only 1% of disaster payments 
were given to Black male farmers.
    However, he continued, the numbers are increasing on the farms and 
ranches. In 1920--there were 1 million Black farmers with 15 million 
acres = 14% of farms in the nation. In 1982, there were only 30,000 
Black farmers--2% of all farmers. In 2012--the number of Black farmers 
had increased to 44,000 Black farmers or 15% of all farmers.
    We face a daunting environment to negotiate the 2018 Farm Bill, 
Espy continued, with both opportunities and challenges:
    Opportunity 1 is to grow Farmers['] Markets to counter the 
defunding of Supplemental Nutrition Assistance Program (SNAP) (also 
known as food stamps) and still provide quality food to impoverished 
people. It is important for the group to work on what can be done to 
grow and produce foods that are recognized as eligible by the SNAP 
program, and to reduce the cost of the electronic benefits program.
    Challenge 1 is to save the farm bill and the 20% of funds not 
directed to nutrition programs. The lack of moderate Congress members 
leaves little room for negotiation. Thus, it is critical to be more 
aggressive in outreach to Congress and to assure that farm safety nets 
do not disappear.
    Opportunity 2 involves preparing to increase in food production to 
meet the demand of the growing population. Congress recognizes that the 
farm bill must provide tools and research to increase efficiency of 
farms. He noted that even the current budget has not proposed cuts to 
research, conservation, trade. Since the North American Free Trade 
Agreement (NAFTA) passed in 1993, US sales of farm goods has increased 
by 300%, with $21.8 billion to China, and $18.3 billion to Mexico. He 
further pointed out that there are new trade opportunities in other 
places, including Cuba.
    Mr. Espy concluded his remarks by challenging the group to take 
their proposals to Congress. ``Make sure your elected representatives 
know who you are, know you aren't going away, and know that you need to 
be reckoned with.''
    Following Secretary Espy's remarks, Ms. Eloris Speight, Director of 
the Socially Disadvantaged Farmer and Rancher (SDFR) Policy Research 
Center, and retired USDA leader Lloyd Wright presented an overview of 
the background, goals, strategies, of the Center and its work on Farm 
Bill Planning.
    The center, based at Alcorn State University, is to conduct and 
coordinate research for the purpose of informing policy. They want to 
make sure that the center's recommendation are data driven and 
consistent literature reviews. Most of these programs relate to 
participation in USDA programs. RFP's have been issued for priority 
research areas.
    The work of the center is intended to reflect ongoing dialogue 
between academic community and stakeholders. The advisory board held an 
inaugural meeting in August 2016 and is seeking input on policy 
priorities for Fiscal 2017. The board advises President of Alcorn State 
University on SDFRs, assists the Policy Research Center. SDFRs are more 
actively involved now; haven't always had a seat at the table.
    The USDA Civil Rights Executive Summary of 2011 is being used as 
opening research. Four priority areas of research were identified. The 
Policy Research Center will make recommendations directly to 
Agriculture Committees and to the Congressional Black Caucus to prepare 
for the 2018 Farm Bill. It has issued a challenge to CBOs to provide 
these issues/recommendations on the fast track, as soon as possible.
    She closed by noting that most ``new problems'' are old problems in 
disguise. We also need to figure out how handle conflicting information 
from CBOs and farmers, and set a process in place to make the best 
decisions about recommendations for the majority, the through the 
technical working group (formed of 1890 groups and USDA experts) and 
the Advisory board. A concern remains that USDA does not have an 
accurate count of SDFRs.
    A group discussion followed, noting the endemic lack of 
appropriations and funding for programs already established to address 
critical issues. Of particular importance was securing expanded funding 
for the Outreach and Assistance for Socially Disadvantaged and Veteran 
Farmers and Ranchers Program (also known as 2501, after the section of 
the 1990 Farm Bill in which it was originally authorized).
    There is a need for more Senators and Representatives to support 
the growth in funding for 2501 and other programs, and to show what the 
program has accomplished. Preserving funding for other programs is als0 
important in the face of a proposed FY 2018 Budget that puts $95 
million on the chopping block for rural development initiatives, and 
which cuts out 19 government agencies/commissions.
    We need to be documenting and sharing success stories in a new 
paradigm: Instead of feel-good stories, provide examples of how the 
program helps communities to get the job done, to document the good 
have you done with the little bit you've been given, and especially how 
many jobs were created. Also important is to show that your work has 
increased applications for projects.
    The group also discussed the need to assure we have an accurate 
count of socially disadvantaged producers in agricultural census 
conducted every 5 years, with the next beginning at the end of 2017. If 
the count is not right, it was pointed out, the money is not right.
    Mr. Tillman then concluded with a reflection on the challenges 
faced now by farmers in Oklahoma, which is low on water, with droughts 
and a plethora of climate challenges. He concluded that it is important 
to assure that policy better addresses 5 key risk forming factors 
(health, institutional, marketing, financial, and production risk) to 
get farmers into business and to stay in business.
    The group then proceeded to the small group and plenary discussions 
that generated the analysis, and policy and strategies present in this 
report for your review, input and action.
II. Issues, Needs and Concerns of Socially Disadvantaged Farmers and 
        Ranchers (SDFR's)
    The Small Group discussions identified several similar overall 
issues, needs and concerns of SDFR's, as summarized below:

  1.  Lack of Knowledge by SDFR's--of what programs are available and 
            how to participate.

  2.  Lack of Trust--The long history of racism and discrimination by 
            USDA has resulted in a deep lack of trust for the agency. 
            The African American, American Indian and Hispanic farmers 
            have all been disenfranchised for so long by this 
            government--we don't trust them--don't want to deal with 
            the frustration and discrimination--we are left bruised and 
            batter. Many SDFR's don't trust the government or think 
            they want to take your land away.

  3.  Lack of Time--Most farm and ranch families have multiple jobs and 
            responsibilities off the farm, with little time to meet all 
            the demands of production, marketing, record keeping and 
            seeking program participation.

  4.  Lack of Funding--Less staff and less money for programs leads to 
            more disappointment and erodes trust when qualified farmers 
            can't get conservation and other benefits.

  5.  Lack of Faith--Farmers who are tired of getting denials and doubt 
            any positive outcome will result from efforts to apply for 
            or seek assistance.

  6.  Lack of Timely Access to Information--With too many things to do, 
            and without access to hands on technical assistance and to 
            technology, SDFR's often miss opportunities to meet 
            deadlines and access resources. All producers need to know 
            important dates.

  7.  Lack of Technical Assistance--Funds for technical assistance do 
            not come close to meeting the needs of farmers for direct 
            hands on assistance from qualified Community Based 
            Organizations and Extension and other University Programs.

  8.  Lack of Accountability--SDFR's participate in much lower rates in 
            most USDA programs, and there is still discrimination in 
            the county offices and at extension offices with no 
            accountability or consequences.

  9.  Lack of Representation on County and State Committees, and among 
            agency and local office staff and leadership means fewer 
            opportunities to learn the intricacies of programs and to 
            develop the relations and knowledge necessary to secure 
            access to critical resources.

  10. Lack of Access to and Use of Technology--Broadband, Internet and 
            Web, and On-Farm Technology are unavailable, too costly, 
            require advanced skills and/or are too expensive to access.

    The following specific issues were also identified by topic area:

  (A)  Specific Issues Related to Participation in United States 
            Department of Agriculture (USDA) Programs--The following 
            were the key issues that needed to be resolved to increase 
            access to USDA programs:

        Equitable Access to Programs--You're supposed to be eligible 
            for these programsonly to find out that there is no money 
            left.

         If the `person' in the seat doesn't change, you might 
            change the policy, 
                but your interests will still not be represented. How 
            is the person at 
                USDA Farm Service Agency (FSA) hired?

         Broader questions--What programs are we not 
            participating in USDA 
                Program?

           One producer did not look at USDA ``which could 
            have been a good re-
                  source--to make my business venture better--because I 
            was on the out-
                  side looking in on the lawsuit.['']

           If we had a community based organization--if 
            there was access to 
                  funding for one--that would have been a really great 
            tool--now you 
                  have a diminishing resource in USDA--not enough to 
            help me.

           Even now when I can get through the process 
            myself--do I want to be 
                  encumbered with this USDA. I am a small ranch I am in 
            competition 
                  with the big ones--not saying I am wasting time 
            here--I need to be 
                  preparing my land--and all the things I need to do as 
            a small farm. 
                  Time is a factor of what we need--for USDA and 
            outreach, we have to 
                  take away time from our work.

           Funding cuts have led to Agency starvation--if 
            they don't have the 
                  staff to reach everyone, the staff is drawn to one 
            10,000 acre contract--
                  don't care about small landowners--not smaller one--
            agencies starved 
                  for years down. In one southern state there used to 
            be four district con-
                  servations and there now only two with only one for 
            outreach.

           Community based organizations are understaffed 
            and over worked and 
                  outreach grants are hard to get than others.

           County committee representation--don't even know 
            what it is? Lack of 
                  information--what do we mean by representation? If 
            you are not mem-
                  bers on the local boards--you don't know ahead of 
            time--need to in-
                  crease participation on USDA boards and committees--
            but farmers 
                  have to give up time to do that--it is more 
            profitable than farming--
                  didn't know that County Committee members get 
            reimbursed expenses 
                  and time. Each has 3-5 farmers on county committees--
            the farmers 
                  elect them with a mail ballot.

           You have to have farm number--someone gave a 
            farmer a packet but 
                  she didn't know anything about what it was--and put 
            it to the side.

           USDA does not put enough funds in the funding 
            pools to cover SDFR's 
                  and limited resource producers--so farmers get 
            disappointed and do not 
                  participate.

           Some of the loans require you to put up 
            everything you own for a loan 
                  that is less than the value of collateral.

           New and beginning farmers need someone to help 
            you, but it is not as 
                  complicated as you think it is--``If you really want 
            that land--make 
                  three copies of the application and scratch on one.''

         Native American (trust) land is leased by white 
            farmers/ranchers.

           Gap in information of what Tribal/trust land is 
            by other farmers.

           Want a person of color (not only white) to help 
            in FSA office.

         Different racial groups are set up against each other.

         Important to document the situations you encounter and 
            hold people ac-
                countable.

         Why does the disaster funding available for a county 
            only go to a few 
                farmers who have the larger land plots?

        Increasing Engagement in Partnerships to Expand Participation--
            A primary issue is how to get individuals engaged in the 
            organizations, cooperatives and outreach programs that are 
            skilled in providing services. If they aren't involved in 
            that first step of being in the organization, how can we 
            get them to participate at the USDA level?

         Strategies needed to promote involvement at all levels 
            of engagement (co-
                operative, program, Community Based Organizations 
            (CBO), and USDA).

           Partnerships are very important.

           More information needed about the USDA programs 
            and process.

           Informational sessions on programs, criteria, 
            and how to apply.

           Sign up for monthly USDA newsletters (Natural 
            Resources and Cons-
                  ervation Services (NRCS) will send a hardcopy of the 
            newsletter to 
                  overcome the absence of internet).

           Try to make extension and other outreach 
            meetings more specific to 
                  make participation more attractive. Advertise topics 
            that would be of 
                  particular interest to farmers, such as flood relief 
            during flood.

           General updates can also be useful and timely, 
            changing herbicides, 
                  recommendations, varieties, and keep updated.

           Conduct USDA survey of SDFRs (``empowered 
            data'') to better under-
                  stand lack of participation--Could be done by SDFRs 
            Policy Research 
                  Center.

        Importance of Achieving Results in Outreach and Service by 
            USDA: One farmer noted ``I've been coming to these meetings 
            for years and nothing is getting better.'' He got on a 
            program that asked him to put in a pond but he hasn't heard 
            from them since. He's never seen Black people there. People 
            that are farming in other areas are getting help, he's 
            saying he's not getting help with his livestock. He caught 
            a little help for with some stuff . . . $1,200 for tree 
            removal for under 4" trees, but only some acres. Still 
            needs 70 acres cleared, and they wouldn't cover bigger 
            stuff.
        Increasing Lack of Technical Assistance: Reduced resources for 
            outreach leads to fewer experienced and dedicated staff 
            with USDA, the 1890's, and CBO's to assist producers. This 
            leads to less onsite assistance to help you directly on 
            your farm and no follow-up to help you sign up. There is an 
            urgent need for experienced assistance in resolving 
            eligibility issues--such as Heir Property/New and beginning 
            farmers also don't know how to participate.

                  Strategies: Producers need direct hands on assistance 
                to get farm and tract number and resolve eligibility 
                issues.

        Reallocation of Bases and Yields: SDFR's receive lower 
            commodity and disaster payments because these they have 
            historically lower bases and yields that emerge from 
            decades of discrimination. Farmers are paid based on their 
            allotted acreage. The amount of acreage considered your 
            base or average is determined by the determination of the 
            FSA County Committee through the ``Quantified Base Law'', 
            and can only be overturned by Congress. This law--dating to 
            1985--says the local committee is to determine what your 
            ``base acreage'' is, and that amount is fixed, no matter 
            how much more you are producing!

                  Strategies: Seek statutory changes (in the farm bill) 
                to require a catch-up reallocation of bases and yields 
                and a process to allow SDFR's to re-establish their 
                bases and yields to fairly and accurately reflect 
                current acreage base and yield.

        Representation on FSA County Committees--SDFR's are 
            Underrepresented on Farm Service Agency (FSA) County 
            Committees and not there when information on programs is 
            shared and decisions on providing disaster assistance, 
            adjusting base acreage and many other issues related to 
            commodity programs. Any farmer can run in the county for 
            the usually 3-member committee and their expenses are 
            covered. There are also Minority Advisors who do not have 
            to run for election but are appointed. Minority Advisors 
            are not paid and not always allowed to take part in the 
            decision making.
        Making Changes in the Farm Bill--How do our concerns to the Ag. 
            Committee on the Hill and in the Farm Bill? The Policy 
            Research Center does not lobby but can conduct research and 
            develop a strategy to implement policy. The CBO's have a 
            long history of work on policy and ``we are going to the 
            hill.'' We can all be advocates and need to engage more 
            farmers on advocacy. The need for more basic education on 
            the Farm Bill was identified including a one page paper on 
            what the farm bill does.

  (B)  Specific Issues Related to Heir Property--The following were the 
            key issues that needed to be addressed to restore access to 
            programs for producers lacking clear title or lease on the 
            land they farm or seek to farm:

        Heir Property: If you have land but there is no will or 
            document saying who will be the administrator of it, your 
            ability to administer and use it is very difficult. If 
            there is not an administrator for the land, you will not be 
            able to get a loan through the USDA. For example, when you 
            want to take out a loan, but you are the beneficiary of 
            land along with your siblings--you have to get all other 
            siblings to sign on to your loan. You will end up in a case 
            with the bank and your siblings to settle your claim 
            interest in the land. Speculators will seek out one or two 
            siblings to see if they can buy them out, then they can 
            petition the courts for the full property to be sold. 
            Called a ``speculating interest'' in the land to cause land 
            loss. You get a minimal amount of the value of that land.
        Arkansas' law has changed--the Uniform Partition of Heirs 
            Property Act allows an heir who is a co-owner to buy out 
            another who wants to sell their share of a property at the 
            market value of the property.\1\
---------------------------------------------------------------------------
    \1\ In addition to Arkansas; Alabama, Connecticut, Georgia, 
Montana, Nevada, New Mexico and Texas have adopted versions of the 
Uniform Partition of Heirs Property Act (http://www.uniformlaws.org/
shared/docs/partition%20of%20heirs%20property/uphpa_final_10.pdf). 
Bills to enact the law have also been introduced in the District of 
Columbia, Mississippi, and Missouri in 2017. A draft bill being shopped 
to additional state legislatures by the nonprofit Uniform Law 
Commission (http://www.uniformlawcommission.com/) to make it easier to 
divide property and preserve family wealth as the owners multiply over 
generations.

        Adverse Possession is also used by white farmers, investors and 
            property owners to take land. They pay property taxes and 
            take ownership, even where there are not heir property 
            issues. For example, an African American woman rented her 
            land to a white farmer and as part of the rent he paid her 
            taxes for 5 years. One year he did not pay rent and told he 
---------------------------------------------------------------------------
            did not owe it because now he owned the land.

                  Strategies: Get more protections in place for 
                African-American families. A lot of risk factors that 
                can result in land loss--need to address them 
                comprehensively.

        Key point: There is a systemic lack of access to information 
            and resources to resolve heir property issues--We see a 
            great deal of land that is idle, land that could be 
            productive but isn't. The legal risk varies from state to 
            state. In some states, someone can seize rights to a 
            property simply by paying delinquent taxes. The time in 
            which one is considered to have relinquished their rights 
            to their land varies by state. There was a provision in the 
            2014 Farm Bill to help get Black farmers' land back; but it 
            didn't go anywhere. We need new support for education on 
            wills and estate planning.

  (C)  Specific Issues Related to Technology Adoption and Usage--The 
            following were the key problems identified with respect to 
            technology:

         Internet Services are Lacking.

         There is limited access to technology.

         Producers have not had access to usage of technology 
            in agricultural pro-
                duction and management.

      Additional issues raised:

         How can technology be used to make it easier for 
            farmers to accept EBT 
                (SNAP) payments? EBT payments total over $66 billion--
            that is a large 
                customer base kept from the growers. Individuals should 
            be able to come 
                straight to your farm to purchase fresh products from 
            you.

         Need more of all types of technology--Electronic, 
            wireless, or solar and 
                on farm.

         Not using solar energy or biofuel the way that we 
            should.

         Access to electronic technology among rural/SDFRs (may 
            be stuck in own 
                ways at age 55+) and illiterate in how to use computer 
            even if they had 
                one address.

         Lack of access to internet, cell phone, etc., 
            particularly for elderly farm-
                ers.

         High cost for necessary internet speed and limited 
            access to information, 
                 computers, and emails--encourage travel to library or 
            McDonalds to use 
                WiFi.

         Lack of technology limits ability to do bookkeeping or 
            taxes.

         We need more and better outreach for available 
            trainings on SAMS and 
                Small Business Administration.

           If your password is expired, the government will 
            kick out any grant 
                  proposals.

           Many advantages, but can be frustrating if you 
            don't know where to 
                  go for the training.

           Renew registration once every year and password 
            every 60 days.

           Have to go to many different agencies for 
            different types of training 
                  (tedious).

         Need increased access to equipment including 
            technology to purchase for 
                educational purposes or cooperatives. For example: 
            Presbyterian and 
                Methodist Churches give grants ($20,000-$25,000) for 
            SDFRs/and Indige-
                nous Farmers and Ranchers. Use these funds for 
            equipment or match. 
                (Under $5,000 can count as office supplies).

         Reiteration of importance [o]f creating Farmers['] 
            Market to generate in-
                come and obtain SNAP payments.

           However--Banks and other actors are getting part 
            of the SNAP pay-
                  ments--misconceptions exist about who is actually 
            getting the money.

  (D)  Specific Issues Related to Access to Resources and Knowledge--
            The following were the key issues identified with respect 
            to access to Resources and Knowledge:

         Local colleges and universities are a great resource 
            for knowledge, train-
                ing, and assistance, as are Community Based 
            Organizations = but need 
                more funding and more programs for outreach and 
            technical assistance 
                for SDFRs and better and different outreach efforts to 
            bridge the gaps in 
                the lack of internet, technology, and computers.

         Support is needed for urban area hubs and more grocery 
            stores in urban 
                communities.

         Provide more funds and more NRCS Technical Service 
            Providers (TSP's) 
                to serve DFR's. TSP's go out to farms and help put 
            together plans for 
                farmers for practices and tech that NRCS will then help 
            pay for. NRCS 
                also helps with practices such as water troughs, row 
            crops, soil testing 
                and herbicides. A lot of farmers don't know about 
            TSP's. We need more 
                TSP's--farmers can't be bashful about coming in to get 
            these services.

         There is a lack of access to technology and training 
            for organic agri-
                culture for SDFRs Many farmers know of organic but are 
            unaware of 
                what it entails and are unsure of the different terms . 
            . . organic, nat-
                ural, pesticide free, etc. Need education on what is 
            best for markets that 
                you have access too. For example, it is possible to get 
            certified organic 
                for a few years and sell at a farmers' market and then 
            gain the trust of 
                your customers, stop doing the certification but keep 
            your practices?

         Information is shared with large scale corporations or 
            agribusinesses--
                SDFRs should have access to those same marketing 
            strategies.

         Access to biofuel technology.

         Reduce the carbon footprint and help farmers save 
            money.

         Snail mail is not obsolete.

  (E)  Specific Issues Related to Access to Grants--The following 
            issues arose in several groups related to improving access 
            to grants.

         Federal grants are for organizations/entities (not 
            individuals).

         Continue and expand mandatory funding for Outreach and 
            Assistance to 
                Socially Disadvantaged and Veteran Farmers and Ranchers 
            (2501) pro-
                gram and increase its maximum ([to] not less than $20 
            million but pref-
                erably $50 million annually. Policy Research Center 
            should prepare a 
                briefing paper that shows what has been done with the 
            current funding 
                to show and the other good we can do with more money. 
            This will help 
                CBO's and others working on the hill to show how 
            funding for more pro-
                grams will help more people. The limit of only one year 
            of funding is a 
                great barrier--business plans are usually 5 years. Add 
            statutory author-
                ity or a requirement to provide multi-year funding.

         Important to learn how to use grants.gov--USDA 
            agencies must list all 
                the grants available as do other Federal Government 
            departments. Also, 
                you can sign-up on USDA agency websites to receive 
            regular news re-
                leases from various USDA agencies (NIFA, NRCS, RD, AMS, 
            as well as 
                USDA Office of Advocacy and Outreach) to get 
            notification of when grant 
                cycles are open.

         Grants can only be used by the specific types of 
            organizations listed and 
                the money may come delayed a few years (proposals don't 
            mean that you 
                were awarded funding).

         Specialty Crop Block Grants will fund provide multi-
            year funding for 2-
                3 years. These are Federal funds administered by the 
            states--Look at 
                state agriculture department for grant cycles and 
            specialty crop priority 
                lists.

            Repeated Denials of Grant Applications: Grant proposals are 
            con-
                tinually denied (for 3 years or more), while the 
            reasons for denial con-
                tinue to change.

                          Strategies: Ask agency to share reviews from 
                        reviewers, and to tell you if any part of the 
                        grant application was missing or incorrect. 
                        Request to see a past successfully funded 
                        grant.

            Develop a relationship with your Congressional office and 
            ask your 
                Representative or Senator to put pressure on agency to 
            fund it. Before 
                you apply, apply to be a reviewer of the grant round 
            and learn the ele-
                ments of proposals that lead to positive reviews.

            For proposals, which is most important for policy: 
            internet/satellite 
                services or agriculture technology? (These are of equal 
            value, need both 
                types of technology so there should be no separation 
            between the two).

  (F)  Specific Issues Related to Discrimination and the Pigford Claims 
            Process--A fuller examination needs to be conducted on the 
            issues and impact related to the Pigford Discrimination 
            Claims process through the Policy Research Center.

         Producers were supposed to get three things: 
            Compensation of $50,000 (or 
                more in other Tiers), Debt relief and Priority access 
            to services, including 
                inventory land.

         But the producers who were successful in the claims 
            process only got 
                funding and the $50,000 in no way compensated for their 
            losses and most 
                farmers didn't even get that. Only the lawyers 
            benefitted. Very few suc-
                cessful claimants (only about 3%) received promised 
            debt relief; even then 
                the loan was forgiven only for a year. Many farmers are 
            still going out 
                of business even with a settlement from Pigford, 
            because their debts are 
                so high because of the penalties and interest they have 
            accrued on their 
                loans from private banks (because the USDA 
            discriminated against them 
                and wouldn't give them USDA loans).

         Under Category 3 of the Pigford Process, which was 
            supposed to provide 
                priority access to future programs, including to land 
            in inventory, no one 
                got inventory land. There is no evidence that there has 
            been any in-
                creased priority to programs.

         We need to secure support in the farm bill for 
            research to show we have 
                not taken care of the Black farmer problem.

  (G)  Specific Issues Related to Rural Development (RD)--We also need 
            to address the need for environmental and social justice. 
            We need to address this in the small communities, like the 
            small delta communities with water problems and sewer 
            problems. We need to target funds to address these issues.
III. Solutions: Building Resourceful and Ready Farmers and Communities
    The following were the proposals from the group related to solution 
that we can implement on our own without policy changes:

  A.  Do What We Can Ourselves: Build Knowledge and Education of 
            Socially Disadvantaged Farmers and Ranchers (SDFR's)--We 
            need to recognize that resources are likely not coming back 
            and we need to take matters into our own hands. It is 
            important that we all work to increase recognition of 
            importance of farmers in communities.

      (1)  Increase Knowledge--You have to be able to fill out the 
            application your-
                self with the help of the internet--we have to move 
            into the 21st century. 
                ``I know how to use the cell phone and the computer--
            you can talk to the 
                phone. Use appropriate technology--get your 10 year old 
            granddaughter 
                to help.''

           First step--you have to visit USDA--you have to get 
            a Farm Number, 
                  you have to get a farm track, you have to get a map 
            and you need to 
                  show proof of ownership--a deed or a lease. You've 
            got to have this 
                  stuff when you go to FSA or when you need to have a 
            conservation plan 
                  with NRCS.

           Go and ask them what you got to have--when you go 
            with nothing and 
                  you don't know nothing--you get nothing. If you asked 
            the right ques-
                  tions and have the right stuff they can give you what 
            you ask for.

             How long does the lease have to be? Different 
            amounts of time are 
                    needed for different programs.

             We each need to be responsible to know what is 
            available.

             Join different organizations/associations to 
            expand the types of infor-
                    mation you are hearing (join the white groups to 
            hear the informa-
                    tion first).

           Participating in USDA programs--You can self-certify 
            yourself. You 
                  need to be sure the land you are on fits the program 
            and to document 
                  ownership or control of the land. That is part of the 
            eligibility thing--
                  we need to work on getting eligible. In Oklahoma, 
            based on the reports 
                  from NRCS, Black farmers only get 2% of the allocated 
            funds. If you 
                  apply and learn you are not legally eligible to 
            participate--you have 30 
                  days to reply[.]

      (2)  Timeliness--We need to know about program opportunities in a 
            timely 
                way--when are sign up periods? Get on mailing lists of 
            agencies, CBO's 
                and Extension to find out.

      (3)  Get Farmers Involved with their Community Based 
            Organizations and 
                Cooperatives, and then with USDA Programs.

           Most farmers who have a problem will go to their 
            local CBOs. We want 
                  to keep the engagement effort local. We work with 
            individuals to make 
                  sure they are thoroughly prepared, and if they still 
            have needs/con-
                  cerns/questions about the process, we go with them!

           Provide workshop for groups of producers to get 
            ready to effectively 
                  apply for and use USDA programs.

           Make sure our farmers know who and where there USDA 
            reps are.

           Use the Natural Resources and Conservation Service 
            Conservation In-
                  novation Grant (CIG) Program to educate and 
            demonstrate conserva-
                  tion practices to farmers.

           Remember that USDA and Extension service are paid to 
            serve you. Use 
                  them. The 1890 colleges can help producers to 
            complete applications.

      (4)  Learn how to apply and quality for programs--We further need 
            to learn 
                when, where and how to sign up. We also need to come up 
            with construc-
                tive solutions to address barriers we find--this will 
            increase participa
                tion.

           Get on Extension Mailing List.

           Work with CBO's that provide hands on assistance in 
            your area.

           Keep Calling and Following Up--develop motivation 
            and perseverance.

           Everyone needs to get a Farm number!

           Get Receipt for Service every time you go to 
            office--it is your right.

           Participate in Census of Agriculture.

           Keep Track of taxes and Complete your Schedule F.

           Build relationships.

      (5)  Hold Agencies Accountable to Serve You--You should expect 
            quality serv-
                ice and do not need to accept discrimination.

           Be visible to the USDA. (They are being paid to 
            serve you.)

           Document activities, and keep records/receipts of 
            service (USDA is re-
                  quired to give you a receipt for service).

           Appeal decisions that you do not like.

           Hold the agencies accountable by filing reports and 
            taking action. Go 
                  to higher ups.

           Seek assistance from CBO's and 1890's if you need 
            it.

      (6)  Participate in Programs and on Boards and Committees and 
            Share What 
                You Learn.

           There is always a farmer in your community who knows 
            how to partici-
                  pate. You should find that person to help you. Anyone 
            who gets into 
                  a program should reach out and help someone else.

           Farmers who enter programs should commit to serving 
            as mentors to 
                  others.

           Producers should consider joining other farm 
            organizations working 
                  with white farmers. Join organizations that have 
            information you can 
                  use, whether or not they are mostly white. Don't 
            stereotype yourself 
                  and limit yourself to Black organizations. The white 
            organizations are 
                  going to find out what's out there and what's going 
            on before we ever 
                  do. We have to make ourselves more visible.

           We need to work together to increase representation 
            on USDA Boards 
                  and Committees.

           We need to run for and get on FSA County Committees 
            and Conserva-
                  tion District Boards and participate on NRCS State 
            Technical Commit-
                  tees. Work with CBO's to learn how to run and to get 
            support from 
                  other farmers and convince them to vote. Many County 
            Committee 
                  members are elected with a small number of votes.

      (7)  If You Encounter Discrimination--Take Immediate Action--
            Discrimina-
                tion is still happening. If you feel someone is 
            discriminating against you, 
                the smartest thing to do may not be to get in their 
            face and cause a 
                scene, but rather go to their boss. The GSA's do not 
            want to lose their 
                jobs.

  B.  Improve Access to USDA Programs--More program support and hands 
            on assistance is needed.

       Reform agency approach to reaching farmers so that more 
            people are 
              knowledgeable of programs and able to access them. 
            Transparency and Ac
              countability requirements must also be met. Employee 
            performance must 
              include indicators on success in including SDFR's.

       More funds for 2501 and to support the CBO's that 
            provide hands on as
              sistance.

       Increase access and availability of technical service 
            providers (TSP's) that 
              come from our communities--train them to address the key 
            issues to assure 
              producers can become eligible for the programs.

       Extension agents need to go out more to field and reach 
            SDFR's.

       Organize farm tours so farmers and ranchers can meet 
            each other.

       Focus more outreach to women because men tend to be more 
            reluctant to 
              go to meetings.

  C.  Address Black Land Loss and Heir Property Issues--Secure more 
            protections for African-American families to hold on to and 
            utilize land. Family members fight over money, it's just 
            what they do.

       A will is essential--without one ``You have to go to 
            court and the lawyers 
              says sell it, and everyone gets like $2000 because 
            there's so many people 
              in family and lawyers take a cut.''

       More training and technical assistance on wills and 
            agreements should be 
              provided to help families resolve heir property issues 
            and to prevent forced 
              partition sales by outside investors who approach 
            absentee owners. There 
              needs to be a program on succession planning and 
            education and wills.

       Policy Research Center should do a matrix on property 
            laws on the 18 
              states it serves.

       Learn how other families have handled this issue. For 
            example, one family 
              has a provision in the will that says they can only send 
            the land to someone 
              else in the family.

       General reform of approach, because current approach 
            isn't working.

  D.  Improve Access to and Use of Technology--Internet gives you 
            information, farming technology lets you apply it. Farmers 
            need both types of technology. Technology on the farm will 
            improve your operations--it is growing and will continue to 
            grow.

       We can develop the technology to make biofuels on the 
            farm to reduce your 
              energy costs--I can make it and I know you can make it. 
            You can transfer 
              this knowledge to others.

       We can also make use of hydroponics and aquaponics.

       Many farming operations are now so high tech, with 
            global positioning and 
              access on information on soil quality and moisture. 
            Irrigation can be done 
              with remote computer access and access to the internet. 
            Drones can be used 
              in farming.

       Create a brand and get a market first.

       We need to promote more support, training and sharing on 
            use of these 
              technologies.

  E.  Build Communications, Partnerships, Opportunities, Pathways--USDA 
            agencies are moving more into computer age--we can't afford 
            to be left behind.

       All farmers need to learn to use the computer and phone 
            and ways to get 
              into programs that don't require going to offices.

         Develop skills and partnerships (esp. with young 
            people) to use internet 
                and phones to find and share Information

       To address the issue of lack of access to information 
            (ex. Agriculture Census 
              or process/criteria for USDA programs):

         Groups should develop and share a list that would 
            show the type of issue 
                (ex. need for equipment) and then the types of grants 
            and resources avail-
                able to address that issue (e.g., grants from the 
            Methodist church)

         Seek grants for technology transfer--we should 
            work for greater partici-
                pation in grant programs and more participation by us 
            on the review 
                committees.

         Get a group of farmers together--let the college 
            speak to you and help 
                you get the knowledge together--on one specific 
            program--$6 million 
                more went out to farmers due to educational efforts.

         In reference to knowledge--it is important--how to 
            streamline the 
                knowledge--not a check box--streamline workshops that 
            actually provide 
                SDFR with tools--line by line assistance. We need a new 
            toolbox.

       Provide more education on the 2501 program and learn 
            where and how the 
              2501 funds are appropriated and how to support more 
            funds.

       Provide organic standards education and assure organic 
            research completed 
              by universities is shared with farmers.

       Be sure to understand and meet Food Safety and 
            Modernization Act Stand-
              ards for food we ingest--the 1890's have training 
            programs.

       Learn how to use rural development programs.

       Recognize the critical importance of support so the 
            community based orga-
              nizations can bring the agencies to the communities 
            rather than bringing 
              the communities to the agencies.

         Improve Access to Grant Funds--Use relationship 
            building to expand ho-
                rizons.

         Takes time to get your name out there and win a 
            proposal.

         Try new tactics with every Administration because 
            the same strategies 
                don't always work.

         Organize Black veteran farmers under us to get the 
            funding for veteran 
                farmers.

       Utilize Farmers['] Markets--It is critical to seize the 
            opportunities pre-
              sented in farmers['] markets.

         Be sure the high level of spending at farmers['] 
            markets can be accessed 
                by all farmers and communities (e.g., Socially 
            Disadvantaged Commu-
                nities).

         Access Technology to accept SNAP Benefits at 
            Farmers['] Markets.

       Build Partnerships and Networks--Everyone needs to be 
            retrained in part-
              nerships and communication with each other to strengthen 
            our bonds of 
              working together. We have to work together--African 
            American, Latino, 
              and American Indian farmers and ranchers.

         Need to persevere and take the time to build 
            relationships.

         We must build accountability in partnerships.

         Expand community based relationships with 1890 
            institutions.

         At Langston University: Animal Science Boot camps 
            were created to fos-
                ter collaboration between the two groups.

         USDA retirees who have a vast amount of knowledge 
            of the programs 
                should be tapped resources for SDFRs.

  F.  Grow A New Generation of Farmers--We need youth component that 
            educates young people on land/agriculture.

       We need to educate our kids about farming to break 
            stereotypes and mis-
              conceptions the younger generation has about farming--
            that it's dirty, etc. 
              You have to show the value of farming (the economic 
            advantages) and also 
              that there are other opportunities, such as production 
            agriculture. We need 
              more people that are involved in forestry and production 
            agriculture, and 
              animal science.

       Organize Younger Farm Associations and Chapters and have 
            regular meet-
              ings. These are good resources for information. We have 
            one once a month 
              and invite the NCRS.

       Urban farming youth outreach has been successful--There 
            is an agricul-
              tural high school in Chicago.

       Build and strengthen partnerships and communication 
            networks to effec-
              tively and actively capture the skill sets of all age 
            groups and participants. 
              Engage existing producers as mentors, and younger 
            generation to help with 
              electronic access.

       There is a youth loan program in the existing bill, we 
            need to keep that. 
              USDA has a youth loan (FSA youth loan can borrow up to 
            $5,000) for any 
              project that is agricultural-related. But you don't want 
            kids getting the 
              money for their parents. Need to get parents that are 
            interested in youth 
              programs. A lot of people don't know about this program.

       We need to think outside the box of focusing on people 
            going to FSA, if you 
              want to get this information to youth who are not 
            connected to FSA list; 
              to make it more accessible to others.

       How about going after establishing a teaching farm? 
            There are Federal and 
              state/local grants for these. This is a way to do youth 
            outreach and edu-
              cation (debunk myths about farming), while securing 
            another stream of rev-
              enue, and cultivating the next generation of farmers. 
            There are several 
              models of this that also teach entrepreneurship and allow 
            new farmers to 
              get a farm number and gain the experience they need to 
            qualify for pro-
              grams in the future.
IV. Policy Proposals for Statutory and Administrative Change
    The group identified several specific proposals for Statutory 
Change (by the U.S. Congress in the farm bill or at the state Level) 
and/or Administrative Change (made in regulations or procedures by USDA 
agencies).

  (1)  Strengthen and Secure More Funding for 2501 Outreach and 
            Assistance for Socially Disadvantaged Farmers and Veteran 
            and Ranchers (OASDVFR)--A top priority identified was the 
            need to greatly expand funding for the historic 2501 
            Program to at least the $20 million annual level in direct 
            funds provided in the 2008 Farm Bill. A level of $50 
            million annually would much better meet needs. Language 
            should also be included to specify that ``funds should 
            remain available until expended'' to provide clear 
            authority for multi-year grants of at least 3 years. Both 
            of these changes must be made in the farm bill. The move to 
            3 year grants would also require a subsequent change by 
            USDA to allow or move to a preference for 3 year grants. 
            Another administrative change would involve requiring a 
            peer review process to include CBO's and Minority Serving 
            Institutions.

  (2)  Secure Authority, Process and Action to Enable Producers to Re-
            establish Base Acres and Yields--SDFR's should be allowed 
            to re-establish bases and yields to reflect their current 
            production. (Statutory Change Needed in Farm Bill).

  (3)  Require Full Implementation of Transparency and Accountability 
            provisions from Section 10708 of the 2008 Farm Bill--Set 
            clear targets and timelines for public reports on program 
            applications and participation by race, ethnicity and 
            gender to the county level-review participation compared to 
            targets and publish reports on whether these are met. 
            Language should also require the data from these reports be 
            used in personnel evaluations, and for regular civil rights 
            compliance reviews, with findings made public. (Could be 
            done with Administrative Action, but changes are needed 
            because it has not been--need Congressional Oversight and 
            Stronger Statutory Requirements).

  (4)  Require Periodic Audits of County Committee Actions--There needs 
            to be a periodic review of how FSA County Committees make 
            decisions and how well they serve all farmers. Are 
            decisions fair and according to policy? Are outreach 
            responsibilities met? How is disaster assistance allocated? 
            How has participation by race, gender and ethnic changed?

  (5)  Expand and Increase Set Asides of Funding in NRCS Programs--Set 
            asides should be increased to 15[%] or 20% of funds. USDA 
            should be required to implement set Asides as floors not 
            ceilings. Unused funds should be redirected to the national 
            level to redistribute to areas with more SDFR's. (Expansion 
            requires Statutory Change in Farm Bill). Expand TSP 
            (technical support programs) to include outreach division 
            and increase support (or include a set aside) for TSP's 
            qualified to serve SDFR's.

  (6)  Increase Funding, Access and Set Asides in Various Programs:

       Secure more funding for organic training, improve access 
            to this training, 
              enact set asides of 10-15% for SDFRs farmers and 
            ranchers.

       Consider Set Asides in additional programs, including 
            grant programs.

  (7)  Enable Active Producers to Access Federal Farm Programs for Use 
            on Heir Property--Seek statutory authority (in farm bill) 
            to enable farmers to utilize Federal farm programs for land 
            management and production including:

       Secure Waiver of eligibility restrictions to allow farm 
            operators who have 
              5-10 year production and Schedule F tax history, but are 
            not the adminis-
              trator, to be eligible for conservation programs, EQIP, 
            forestry and other 
              services on all of the land (i.e., a 5 year or 7 year 
            contract on a CSP).

       Work to new secure lease-back and buy back provisions to 
            help get Black 
              Farmers and SDFR get land back.

       Establish new authority within existing Farm Ownership 
            Loan Programs, 
              or a new Loan Program with authority for low interest 
            farm ownership 
              loans to families to resolve heir property issues by 
            buying out other heirs 
              (model these on programs in the 2008 and 2014 Farm Bill 
            that provided a 
              lending program to allow Tribes and then individual 
            Native American 
              Farmers to access loans to resolve fractionated land 
            issues).

       Research additional ways to build incentives for heirs 
            to allow land man-
              agement and production on the property. The time in which 
            one is consid-
              ered to have relinquished their rights to their land 
            varies by state. Laws 
              relating to adverse possession also vary. Review state 
            laws and recent 
              changes for best models.

  (8)  Access to Programs for New and Beginning Farmers Seeking to Farm 
            on Heir Property

       Adjust criteria so heir property waiver could apply on a 
            farm with a history 
              of being farmed and that the waiver would apply to 
            whoever is currently 
              operating the land.

       Restore SDFR priority access to land in inventory with 
            FSA, along with be-
              ginning farmers and ranchers.

  (9)  Expand Youth Programs in the Farm Bill--Incorporate more 
            provisions to benefit youth and young farmers into farm 
            bill, including expansion of the FSA youth loan. Allow more 
            organizations and CBO's who serve youth to be able to 
            access youth education programs funds.

  (10) Farm Credit--Include language to provide exemptions for SDFR's 
            eligible that now allow Limited Resource Farmers to access 
            FSA loan programs without providing two letters of denial 
            from banks.

  (11) Protect and Increase support for Rural Cooperative and Business 
            Development Program and Funding--Consider Additional Set 
            Asides for SDFR's.

  (12) Support Urban Agriculture Policy and Programs--Be sure they 
            complement and work with other programs for SDFR's and do 
            not compete with them or simply expand benefits for 
            suburban and wealthier farmers.

  (13) Support More Funding for the Beginning Farmer Development 
            Program--Be sure set-asides for Socially Disadvantaged and 
            Veteran Farmers are sufficient, possibly with priority to 
            those who meet both categories. Eliminate matching 
            requirements. Maintain ``just in time'' application process 
            so some documents are on required once you win a grant.

  (14) Develop New Policy and Programs to Encourage Partnerships and 
            Cooperatives among SDFRs to increase access to technology, 
            information, and equipment.

       Help beginning farmers to stay in business.

       Bridge gap in access to technology and technique.

       Foster mentorship among different age groups (i.e., 
            senior age farmers ex-
              perienced in farming with youth skilled in technology 
            use).

         Reciprocal mentorship program.

           Bridge gaps (as seen above).

           Shares skillsets among different age groups (i.e., 
            younger generation 
                  better with technology while older generations know 
            techniques).

  (15) In Extension, FSA, NRCS, etc.--increase authority and support 
            for outreach grants to provide trainings in partnerships 
            with 1890's and CBO's.

       White farmers have relied on the 1862 land-grant 
            institutions and USDA 
              service centers for service center (African-American 
            farmers are not present 
              at these training sessions hosted at the institutions).

       Provide 1890 institutions and CBO's similar 
            opportunities/funding to pro-
              mote participation.

  (16) Provide New Funding and Authority for the National Agriculture 
            Statistic Service to expand what is counted in the Census 
            of Agriculture and other studies does. Data should be 
            collected on land ownership--not just farms. This will help 
            us to put a strategy in place to effectively deliver funds 
            allocated. (Also consider requirements for Economic 
            Research Service Reports and Studies).

  (17) Include a Farm Bill Provision (as a last-minute amendment) to 
            authorize funds for a Review of the Pigford Claims process 
            and its Impact on Black Farmers.

  (18) Support passage of Uniform Partition of Heir Property Act in 
            more states? (Mentioned but not officially proposed)--
            Request CBO's in states with the law to share experience 
            with the law and recommend if it should be enacted 
            elsewhere or changed in any way: http://
            www.uniformlaws.org/Act.aspx?title=Partition%20of%20Heirs%20
            Property%20Act.
V. Proposals on Strategy
   Conduct Research--We need more comprehensive studies on 
        SDFRs, to learn more about the reasons they are not 
        participating in USDA programs. Conducting a more comprehensive 
        study of a larger sample pool would provide data that we could 
        then take to USDA headquarters to show what the ``masses'' are 
        saying. The Policy Research Center is working on this.

   Report on Pigford--One group proposed that the Policy 
        Research Center take a deeper look and prepare a report on the 
        Pigford Claims process. There needs to be a clean and 
        comprehensive research project. More than $2 billion was spent 
        to resolve the claims, so there is nothing wrong with spending 
        $5-$6 million to conduct a study that evaluates the impact of 
        Pigford on the Black farming community

   Expand grants for outreach education--More support for 
        Outreach is needed.

     There are grants for this, but they aren't easy to 
            get. Maybe if the 1890s institutions were given funds for 
            this, there would be more participation among SFDRs. We 
            should give these institutions money to do this.

     We need `retraining' and `partnership education.' Need 
            to stay on the 1890s institutions, to ensure that they 
            remain aware of CBO's and their needs.

   Farm Bill Information and Strategies--How can we change farm 
        bill if we don't know what it is? We need more information on 
        what is in it and how it helps farmers.

     Important to increase participation--and support--of 
            Community Based Organizations to build grassroots power in 
            the policy debates. CBO's have worked effectively on the 
            hill for many years and we to benefit from this experience 
            to work together to do so again.

     With respect to the upcoming debate on renewing the 
            Farm Bill (2018)--if something is positive we need to keep 
            it. If it's negative get rid of it. We need to start 
            working now because the time for input is now.

     We should focus on some specific policies to laser in 
            on for farm bill.

     We should work with the Congressional Black Caucus to 
            prepare and have them add amendments at the last moment 
            because Congress needs their support to get the full bill 
            passed.

     The Jackson-Lewis study done for USDA has 
            recommendations on 2501 and other issues that the USDA 
            doesn't want to do. We should include these in our analysis 
            of policy issues for action.

   Develop and Use Mentor Farms--We can learn from doing versus 
        simply reading about farming best practices.

     Use teaching or mentor farms to educate new farmers. 
            Several CBO's have or are developing mentor farm operations 
            with various structures. The optimal models allow the 
            incoming producers to gain both the skills and experience 
            necessary to qualify for USDA programs. This includes the 
            opportunity to have control of a piece of land and to get a 
            farm number.

     To find a list of 1890s institutions that offer model 
            farms on the USDA site, search for `1890s'. They have 
            `Field Days' where they do demos of model farms.
VI. Conclusion
    The following were the closing recommendations of the group at the 
final session, which was led by Mr. Tillman.
    Grow the Next Generation of Producers--Support the next generation 
of African American and other SDFR's.

   Assure the next generation of farmers are involved in future 
        meetings.

   Build youth education on farming to break stereotypes and 
        misconceptions.

   Speak about the plight of farmers (Black farmers and 
        southern farmers).

   Increase opportunity in production agriculture.

   Better relationship between USDA and farmer.

    Engage Everyone in Improving the Farm Bill--Recommendations 
included the following:

   Prepare a one page handout of what the farm bill is.

   We are going to the Hill.

   Funding of 2501 program and Policy Research Center (for next 
        5 years).

   New Measures to Assure Accountability of service.

   Incorporate and expand youth programs and support in the 
        farm bill (expand USDA youth loan and mentoring programs).

   Prepare the next generation to continue the fight.

   Increase support in the farm bill for workshops and other 
        training sessions.

    Increase the Capacity of Community-Based Organizations--Community-
Based Organizations provide critical training and assistance.

   Increase support and participation of community-based 
        organizations.

   Training for CBO leaders to engage farmers in agriculture 
        and policy.
3. Issues Related to Farm Credit and Guaranteed Loans
    Rural Coalition Letter to the General Accounting Office (GAO) 
regarding Sec. 5416. GAO Report on Credit Service to Socially 
Disadvantaged Farmers and Ranchers, Washington, D.C., March 3, 2021.*
---------------------------------------------------------------------------
    * Editor's note: the letter is dated March 3, 2019. It has been 
published herein as received.
---------------------------------------------------------------------------
    Farm Credit Administration response to a farmer following a request 
for assistance with a complaint, December 18, 2014. [Attachment 1].
    Rural Coalition Letter to the Farm Credit Administration requesting 
information on assuring protections under the Equal Credit Opportunity 
Act, December 19, 2014; farmer name redacted. [Attachment 2].

March 3, 2019

  Hon. Gene L. Dodaro,
  Comptroller General,
  U.S. [Government Accountability] Office,
  Washington, D.C.

  Re: Sec. 5416. GAO Report on Credit Service to Socially Disadvantaged 
            Farmers and Ranchers

    Dear General Dodaro:
I. Introduction
    As the [Government Accountability] Office prepares to fulfill its 
duties under Section 5416 of Public Law 115-334, the 2018 Farm Bill, 
the undersigned organizations representing the agriculture lending 
interests of minority and socially disadvantaged farmers and ranchers 
encourage the adoption of methodologies that examine and evaluate farm 
lending policies having a negative impact on minority farmers and 
ranchers. The study's methodology should examine, from our perspective, 
and evaluate certain ``unique'' lending patterns, practices and 
policies that reliable sources, academic and legal, verifiably document 
as contributors to farm loan default, acceleration and foreclosure 
within the minority farming community.
    The undersigned organizations over the years have reviewed 
thousands of loan documents, and assisted minority farmers with loan 
servicing options. Before and after Keepseagle, Love, and Garcia, 
Pigford Farmer settlements, the undersigned organization labored with 
minority and socially disadvantaged family farmers and ranchers in the 
areas of farm credit applications, collateral requirements, and loan 
servicing. As a collective of over 100 years of experience in family 
farm foreclosure prevention and farm wealth transition, we know 
firsthand the consequences of late loans, disparate treatment and 
disparate impact in loan servicing and other hidden farming lending 
discriminatory policies and procedures. A history of loan service to 
our farmers gives us the knowledge and credibility to offer suggestions 
that will accommodate efforts to determine other appropriate details of 
the study's methodology. As you develop a methodology to gather and 
organize reliable report data to present to the House and Senate 
Agriculture Committee, consider farm loan practices from our practical 
and historical perspective.
    As delineated herein, our methodology suggestions find general 
acceptance in 7 U.S.C. 1983c which authorized the Secretary of 
Agriculture to implement pilot loan programs when there is a finding of 
loan program irregularities. This study is much needed as it will point 
out farm lending irregularities for the purpose of improving credit for 
all farmers. Farmers appreciate the fact that the legislative language 
mandates a product completion within 120 days of December 18, 1018, the 
execution date of the 2018 Farm bill.
II. Legislative Requirements
    The statutory language requiring of the study is general and 
purposely vague. We point out the vagueness of the language, not as a 
criticism, but to augment the necessity of a broader methodology that 
captures real irregularities faced by minority farm borrowers.

    Essentially, Section 5416. of Title V of the 2018 Farm Bill 
requires the Comptroller General of the United States to conduct a 
study to (A) assess the credit and related services provided by 
agricultural credit providers to socially disadvantaged farmers and 
ranchers; (B) to review the overall participation of socially 
disadvantaged farmers and ranchers in the services described in 
subparagraph (A); and (C) to identify barriers that limit the 
availability of agricultural credit to socially disadvantaged farmers 
and ranchers. Title 5416, Sec. 5416 of Public Law 115-334.

    The language's general reference to terms like access, 
participation rates and barriers by implication suggests that the 
functionality of the methodology encompasses the time, place, manner of 
access, and foreclosures that may violate Federal laws if the 
irregularities are found to be within the consumer protection 
prohibitions of statutes like the Equal Credit Opportunity Act (ECOA)--
15 U.S.C. 1691-1691f, Fair Housing Act (FHA)--42 U.S.C. 3601-3631; Dodd 
Frank Unfair Deceptive and Abusive Practices Act (UDAP)--12 U.S.C. 
Section 5531(d).
    Even though not specifically mentioned, it is permissible that the 
study's methodology must be comprehensive to the extent that access, 
participation and barriers will be quantitatively and qualitatively 
articulated by examining or evaluating lending irregularities and 
discriminatory practices against relevant regulatory guidance of 
relevant consumer protection statutes. If a plain meaning 
interpretation of Section 5416 applies without permissible 
considerations, the data could be limited to the number of minority 
farm loans granted and denied and miss critical data on key issues such 
as lending patterns, policies and practices that have a disparate 
impact or serve as disparate treatment. Missing the real issues of farm 
loan irregularities and discriminatory terms and conditions may cause 
further extractions of land wealth from minority farmers while denying 
the same or similar viable, economically appropriate lending risk 
management tools offered to nonminority farmers and ranchers.
    We understand that not every aspect of a farm loan transaction can 
be studied. But critical irregularities must be studied. The 
Congressional intent of Section 5416 reveals that the results must 
inform and guide policy makers and practitioners on how to create 
program efficiencies while ensuring fair farm lending.
    Reviewing overall farm lending participation rates does not address 
associated issues of barriers to participation such as fair and 
equitable participation. The fact that a minority farmer participates 
in a private or Federal loan program does not automatically equal 
meaningful, fair participation. Some farm credit transactions run afoul 
of consumer credit statutes and we can attest to such examples evincing 
lending irregularities and discrimination. Therefore, participation in 
harmful discriminatory lending transactions is more detrimental 
economically than straight forward credit denial, especially when the 
loan is over collateralized, and a personal residence security interest 
is mandated but is unnecessary to secure the loan in question. Minority 
farmers understand that agriculture is a high economic risk industry 
and their reliance on fairness in credit transactions must be 
guaranteed by the lenders offering various credit options.
    Farm lending, especially when directed by the government or 
guaranteed by the government, should be a consistent and evenly applied 
farm risk management toll. In accordance with 7 CFR 1779.63 and 7 CFR 
4279.281 the U.S. Department of Agriculture and the Small Business 
Administration must make sure that lending irregularities and 
discrimination is not a part of any loan guaranteed by the government. 
Minority farmers confront the same floods, droughts, and market 
fluctuations as nonminority farmers. Inequities and irregularities 
within farm lending sector should not be held in the same farm risk 
category as natural disasters.
III. Irregular and Discriminatory Lending Practices
    The data collected for analysis, under Section 5416, must include 
loan transactional components such as (a) excessive collateral 
requirements, (b) unwarranted late disbursement of loan funds, (c) 
misapplication or calculation of actual or average farm production, (d) 
evaluation of loan applications based the association of credit risk 
identified with third party non applicants, (e) directing or requiring 
borrowers to purchased equipment or inputs from entities related to the 
transactional lender, (f) suggesting or requiring underfunded or over 
funded annual crop loans with the intent to gravely impact repayment 
ability, and (g) denying or forcing loan servicing options that 
diminish annual farm operations and loan repayment ability. While not 
exhaustive, this list is a compendium of discriminatory or irregular 
lending conduct that is prohibited by the Equal Credit Opportunity Act, 
the Fair Housing Act, and the Dodd Frank Unfair Deceptive and Abusive 
Practices Act. These aspects must be studied.
IV. Develop a Methodology from Applicable Consumer Credit; Civil 
        Rights; Farm Credit Statutes and Regulations
    The goal of this study is to collect data on access to fair credit 
since the lack of access to fair credit is the same as a barrier to 
credit. We recommend that the study examines 8 (eight) standards.

  (a)  Effects Test--The Equal Credit Opportunity Act and its 
            implementing regulations found at 15 U.S.C. 1691, and 12 
            CFR 1002, Regulation B, may prohibit certain credit 
            practices that are discriminatory in effect because the 
            practice or policy has a disproportionately negative impact 
            on a prohibited basis such as race, age, gender, etc. Under 
            the effects test, the policy or practice of the creditor 
            does not have the intent to discriminate. The lending 
            practice, under the effects test, appears to be neutral on 
            its face. It is the application of the policy or practice 
            that presents the irregular, discriminatory disparate 
            impact or disparate treatment problem for the minority or 
            socially disadvantaged farmer borrower. For example, the 
            lender informs nonminority similarly situated farm loan 
            borrowers on the best and lowest price seed, tractors or 
            fertilizer. Or the nonminority borrower may get detailed 
            information on where to find low priced farm land for 
            rental. In contrast, the minority farmer does not get the 
            same ``best source to purchase'' advice. Another example is 
            appropriate as is the ``best source to purchase'' example. 
            Consider a lender loan requirement specific to the minority 
            farmer where a refinance of personal residence using a USDA 
            guaranteed loan is mandatory for the closing of a farm 
            operating loan. Under the ``effects test'' a disparate 
            impact problem arises where, in contrast, the nonminority, 
            similarly situated farm borrower is not required to 
            refinance his personal residence and or use the personal 
            residence as collateral for a farm operating loan. It is 
            easy to see that the minority farmer, in these examples are 
            subjected to disparate treatment. Granted, some lender 
            policies or practices will pass muster if it meets a 
            legitimate business need of the lender that cannot 
            reasonably be achieved as well by means that are less 
            disparate in their impact. See Regulation B, 12 CFR Section 
            1002.2(c), (m), (n), (t) and (z).

  (b)  Deceptive and Abusive Lending--Although less frequently, a 
            lender may subject a farm loan borrower to terms and 
            conditions that are designed to put the farmer out of 
            business. A farmer may be subjected to coercive tactics 
            whereby a farmer can be lured into a farm loan that is not 
            affordable or guaranteed to result in foreclosure. Lender 
            decisions to such abusive or deceptive tactics in loan 
            making or terms and conditions may violate the Dodd Frank 
            Unfair Deceptive and Abusive Practices Act (UDAP). In the 
            farming area, like other consumer credit, a UDAP claim can 
            be successful only when the lenders conduct shows the 
            following: ``(1) materially interferes with the ability of 
            a consumer to understand a term or condition of a consumer 
            financial product or service; or (2) takes unreasonable 
            advantage of--(A) a lack of understanding on the part of 
            the consumer of the material risks, costs, or conditions of 
            the product or service; (B) the inability of the consumer 
            to protect the interests of the consumer in selecting or 
            using a consumer financial product or service; or (C) the 
            reasonable reliance by the consumer on a covered person to 
            act in the interest of the consumer.'' Dodd-Frank Wall 
            Street Reform and Consumer Protection Act, 12 U.S.C. 
            Section 5531(d).

  (c)  Residential Real Estate--In order to obtain a farm operating 
            loan, a farmer may be required to offer his personal 
            residence as collateral for such loan. On its face the 
            offering of a personal residence can be a lender 
            requirement that is based on the credit risk of the 
            particular loan. However, Civil Rights statutes and 
            implementing regulations such as 24 CFR Section 100.130(a) 
            prohibit a lender from imposing different terms or 
            conditions for the availability of loans or other financial 
            assistance because of race where the transaction is secured 
            by residential real estate. See 42 U.S.C. 3604(b); 24 CFR 
            Section 100.130(a); and 24 CFR Section 100.130(b)(1)(2)(3).

  (d)  Excessive Collateral Requirements--Whether minority farmers are 
            required more frequently than non-minority farmers to 
            tender excessive collateral in order to receive a farm loan 
            or to acquire meaningful loan servicing through workout and 
            loan modifications. See Regulation B, 12 CFR 1002.6(b)(4); 
            Regulation B 12 CFR 1002.2(n).

  (e)  Discriminatory Loan Terms and Conditions--Whether minority 
            farmers more frequently than non-minority farmers receive 
            loan funds after April of any given crop year. Under the 
            guidance of 12 C[F]R 1002.6(b)(4) a lender cannot provide 
            two different systems of credit application, loan pricing 
            or loan servicing. See Regulation B, 12 CFR 1002.6(b)(4).

  (f)  Third Party Influence--Whether minority farmer loan application 
            packages and lending decisions are unduly influenced by 
            third party entities such as equipment dealers, 
            agricultural input suppliers and or processors and millers 
            of raw agricultural products. See Regulation B, 12 CFR 
            1002.2(c); 12 CFR 1002.4(a)(b); and Unfair Deceptive 
            Abusive Practices Act_12 U.S.C. Section 5531(d).

  (g)  Lender Control Over Farmer Operations--Whether farm lender's 
            more frequently exert control over the daily management of 
            minority farmer operations in terms of acreage planted and 
            equipment purchased. Unfair Deceptive Abusive Practices 
            Act_12 U.S.C. Section 5531(d).

  (h)  Intentional Lender Mistakes--Whether certain lender decisions 
            are implemented with intent to cause irreparable damage to 
            the economic viability of minority farm operations. Unfair 
            Deceptive Abusive Practices Act--12 U.S.C. Section 5531(d) 
            (UDAP). We do not infer that every farm loan, whether USDA 
            Direct or USDA guaranteed, is made and designed with the 
            intent to defraud or damage the farming operations of 
            minority operators. But, history and experience, 
            nevertheless, inform us that such problems like this do 
            appear occasionally and have the intended effect of causing 
            harm and failure to minority farmer operations. Again, we 
            stress that these practices do not happen every day, but 
            our farmers tell when they exist, and the farmers tell us 
            when lenders make lending mistakes--intentionally or not. 
            Having made a compelling argument to the U.S. Congress 
            during the 2018 Farm Bill debate, the House and Senate 
            Agriculture Conference Committee, responded proactively to 
            provide a provision of ``equitable relief'' for farm loan 
            borrowers in those circumstances where a FSA farm loan 
            employee makes a mistake--knowingly or unknowingly--and 
            that mistake causes a borrower to be in noncompliance on a 
            USDA direct loan. Section 5304 of the 2018 Farm Bill 
            conference report gives the Secretary of Agriculture the 
            authority to offer a farm loan borrower a provision of 
            ``equitable relief'' when a decision of a farm loan officer 
            causes the borrower to be out of compliance with the loan 
            program. Noncompliance with a loan term or provision can 
            lead to default, acceleration, and foreclosure. The 
            ``equitable relief'' provisions of Section 5304 are far 
            afield from the fraud prevention provision of the UDAP. 12 
            U.S.C. Section 5531(d). Lender mistakes whether intentional 
            or not will cause economic damage to farm business 
            operations. We mention the presence of ``equitable relief'' 
            in Section 5304 to highlight the existence of a problem and 
            the necessity that the GAO study look into irregular 
            lending practices having a flavor of mistake or fraud. Sec. 
            5304 of Public Law 115-334.
V. Industry Specific Credit Transactions: Sugar Cane and Contract 
        Poultry
    Although not often implemented by the U.S. Department of 
Agriculture, 7 U.S.C. 1983c permits the Secretary of Agriculture to 
conduct pilot loan programs in areas of lending irregularities, such as 
those endemic to industries such as contract poultry and sugar cane 
production. The existence of pilot loan programs under 7 U.S.C. 1983c 
provides additional credibility to the research questions and 
methodologies that we suggest be made a part of this study. Our 
suggested approach makes a valid attempt to explain farm lending 
irregularities whether they be historical and race based or neutral 
loan making business decisions that have a disparate impact on minority 
farm loan borrowers. Upon the general applicability of 7 U.S.C. 1983c, 
we urge a methodology that informs the Secretary of Agriculture of the 
benefits of frequent, effective utilization of 7 U.S.C. 1983c when 
presented with a petition by a farm group showing that an area, or 
group of farmers are defaulting on loans on a consistent and increasing 
rate with a similar pattern or practice of lending or loan servicing. 
Under 7 U.S.C. 1983c, a petition from a farm group requires the 
Secretary to create a farmer Loan Pilot Project designed to prevent and 
restructure loans in the area of concern. FSA direct and private 
guaranteed lending in the contract poultry industry presents a good 
example of consistent farm lending irregularities. For example, in the 
years 2004-2007, approximately, we worked with Hmong organizations and 
producers, holding focus groups and other reviews of the difficulties 
faced by Hmong farmers who had relocated to northwest Arkansas near 
Fayetteville, to purchase poultry operations. We reviewed practices and 
called these to the attention of the Secretary of Agriculture. Many of 
the families included parents who entered the US as refugees, and 
children who had worked in fields such as engineering. A group 
primarily from Wisconsin began to move to northwest Arkansas at the 
recommendation of respected people, who had served in public positions 
within USDA and elsewhere. They had some resources, and it appears the 
local real estate industry worked in cooperation with the banks to 
secure guaranteed loans to buy out poultry operations that were not 
economically viable for their former owners. The producers showed us 
that in many cases identical or nearly identical farm and home plans 
were submitted to the banks for approval, and farmers were told they 
could secure certain conservation benefits used by previous owners. The 
prices of the farms rose as more producers moved in, and in most cases 
the families were not aware of the additional costs they must incur 
before the integrators would allow them to enter production. The loans 
provided were proving highly risky, and many of the new producers lost 
their operations. The ``solution'' recommended at the national level 
after Rural Coalition and many other groups called for action, was to 
pressure the Natural Resources and Conservation Service to engage 
trainers from groups who worked as farm advocates to teach producers 
how to better meet the requirements of the poultry integrators. The GAO 
should review the loan por[t]folios in that region over the past 15 
years to examine lending practices. Producers told us that the bankers, 
the real estate agents, and many others benefited. The producers are 
left with debts most likely still held by the Farm Service Agency.
    Minority and socially disadvantaged farmers and ranchers are often 
subjected to lending irregularities deemed ``non business credit risk'' 
loan terms and conditions. The following terms and conditions are 
deemed ``non business credit risk'' terms and conditions: (i) lender 
loan servicing mandate to sell borrowers existing income producing 
collateral and use the sales proceeds to buy new replacement collateral 
from a single tractor equipment source identified by the lender; (ii) 
farmer requirement to purchase a piece of farm harvesting equipment and 
immediately lease the equipment to a third party business; and (iii) 
consideration of the past bad debt of a parent or other family member. 
The outgrowth of these and related lending irregularities fosters 
barriers to meaningful access to farm credit for minority farmers.
VI. Effective Complaints Processing and Settlement
    We further note that the Farm Credit System lacks a specific system 
or methodology to act on civil rights complaints consistent with ECOA 
and related requirements and that one needs to be developed and 
implemented in order to assure fair implementation of guaranteed 
programs. We have attached correspondence that we conducted with the 
Farm Credit Administration on behalf of a young African American 
producer in South Carolina, and correspondence between he and FCA in 
2014.
    We also have correspondence and many documents on the case of a 
Hmong woman who had an operation in Missouri with her husband, and how 
she lost her operation after he passed away. In these cases and many 
others, producers come to us at a point when it is very difficult to 
save their operations. What is similar in all the cases we have 
mentioned is that there is substantial confusion not only for the 
guaranteed loan borrowers we have encountered, but also on the part of 
advocates, on how to secure the rights provided these borrowers under 
the Equal Credit Opportunity Act. The Farm Credit Administration has 
not included equal credit opportunity under the protected rights it 
lists on its website, and to file a discrimination complaint, producers 
are told to write to the FCA Office of Congressional Relations and 
Public Affairs. The questions asked and responses provided indicate 
there is no formal process to investigate claims under ECOA. There do 
not appear to be any statements or other information to tell farmers 
how to secure their rights. We urge you to review these attachments. 
The GAO study should examine what system FCA and the banks that make 
guaranteed farm loans should have and how producers should be informed 
of and assured their rights. Thus, producers who encounter unfair 
treatment lose valuable time trying to figure out the avenues of 
protection they do have. The GAO should consider what measures are 
necessary to correct these deficiencies and assure guaranteed lenders 
abide by ECOA in loan making and loan servicing.
    The study methodology should also take a look at the specific 
minority farmer lending practices within certain crops or industries 
such as poultry in Arkansas, North Carolina and elsewhere, vegetable 
crops in South Carolina and sugar cane crops in Louisiana. The study 
will be much more valuable if it examines the lending practices in 
these industries as related to African American, Hispanic, Hmong and 
other Asian Pacific American, and Native Americans borrowers. A 
specific portion of the inquiry should address how the details of loan 
transactions may have caused or contributed to the exodus of minority 
and socially disadvantaged farmers from specific farm industries in 
specific areas, and who benefited and who lost in these areas.
VII. The Need for a System of Compliance Monitoring
    Our Coalition has worked on the issue of compliance monitoring in 
direct lending and on the issue of equitable access to all Federal 
programs for farmers and ranchers for many years. In particular, we 
have worked to assure the data is available to understand patterns and 
barriers that interfere with the assurance of equitable access and 
opportunities. Since 1987, we have worked to secure authority for the 
collection and analysis of program participation data by race, gender 
and ethnicity at the national, state and county levels. The Agriculture 
Credit Act in 1987 required the calculation of target participation 
rates for lending to the county level for direct and guaranteed loans. 
Farm Service Agency and its predecessor, the Farmers Home 
Administration, has done so for years. These data are available to 
guaranteed lenders and the Farm Credit System. Over the years, in each 
Farm Bill we have added other authorities for data and documentation. 
Following the 2012 Census of Agriculture, we urged the National 
Agriculture Statistics Service to provide data to the county level on 
the demographics, economics and crop produced by race, gender and 
ethnicity. They complied, and this data is now available at https://
www.nass.usda.gov/Publications/AgCensus/2012/Online_Resources/Race,_Eth
nicity_and_Gender_Profiles/index.php.
    We have seen no evidence that the Farm Credit System and other 
guaranteed lenders have any system to evaluate their lending to 
minority producers as compared to other producers, or that they collect 
the data they would need to proactively monitor their compliance with 
ECOA.
    In 2011, Farm Credit Administration released for public comment a 
``Proposed Operating and Strategic Planning Rule,'' 76 Fed. Reg. 101 
(May 25, 2011). Its recommendations were based on marketing practices 
related to addressing ``diversity'' in the marketing practices of the 
Farm Credit System Institutions, while avoiding the more central issue 
of compliance with ECOA. The following is an excerpt from our comments:

          ``The Rural Coalition, and other undersigned partners and 
        allies, submitted detailed recommendations with respect to the 
        proposed rule, which we share with you now as they are 
        pertinent to the current report and merit re-examination for 
        the outcomes achieved following the issuance of this rule:
  ``The Final Rule Should Require the Federal Credit System 
        Institutions to Engage Historically Underserved Farmers and 
        Community-Based Organizations that Serve Socially Disadvantaged 
        and Limited Resource Farmers in the Development of Their 
        Marketing Plans

          ``According to Section 618.8440(b)(8), the marketing plans of 
        Farm Credit System institutions would have to include, at a 
        minimum, a description of the institution's chartered territory 
        by geographic region, types of agriculture practiced and market 
        segment and the strategies and the actions to ensure the 
        institution's products and services are equally accessible by 
        all farmers, with an emphasis on outreach to historically 
        underserved farming communities. Furthermore, the proposed rule 
        advises institutions to use an array of demographic 
        information, down to the county level, to identify the 
        characteristics and market segmentation of its territory (i.e., 
        Websites of the Census of Agriculture, the U.S. Census Bureau, 
        and the United States Department of Agriculture's Economic 
        Research Service).
          ``In addition to these sources, the Farm Credit System 
        institutions should also engage their state National 
        Agricultural Statistics Service (NASS) Directors to generate 
        data specific queries in order to obtain a deeper understanding 
        of the farmers that the institutions are mandated to serve.
          ``Additionally, institutions should also specifically work 
        with the USDA to obtain the annual application and 
        participation rate data mandated in Section 14006 of the 2008 
        Farm Bill, including numbers and percentages, for each county 
        or parish and state in the United States, organized by race, 
        gender and ethnicity, from USDA's Farm Service Agency and Rural 
        Development programs. The Farm Credit should also look at this 
        authority and other more recent authorities to generate their 
        own data on participation in their programs.
          ``Section 618.8440(b)(8), also advises that the `marketing 
        plans of institutions include grassroots outreach activities 
        and education efforts that market to underserved populations 
        regarding business and financial planning and leadership and 
        loan programs for persons who are creditworthy and eligible to 
        borrow.'
          ``Although outreach to underserved farming communities is an 
        essential component of an institution's marketing plan, the 
        unique perspective and reality of the underserved farmer should 
        be incorporated in the developmental process of the 
        institution's marketing plan. Accordingly, the final rule 
        should require institutions to include historically underserved 
        farmers and community-based farming organizations that serve 
        socially disadvantaged and limited resource farmers in the 
        developmental process of the institutions' marketing plans.
          ``In preparing our Coalition's comments to this proposed 
        rule, we spoke to several members about the Farm Credit System 
        and there exists a universal perception that the Farm Credit 
        System institutions are not accessible to the underserved 
        farmer and have failed to conduct outreach to these communities 
        to educate them regarding the institutions' programs and 
        services. In the words of a long-time Latino farmer and 
        advocate, `the Federal Credit System is further beyond the 
        reach of the farmer than a commercial bank, we never felt this 
        was a source of assistance.'
          ``Moreover, institutions should work to develop meaningful 
        relationships with the USDA Minority Farms Advisory Committee 
        authorized in the 2008 Farm Bill and now established, 
        community-based organizations that serve socially disadvantaged 
        and limited resource farmers, 1890 and 1994 Land-Grant Colleges 
        and Universities, and grantees under the 2501 Outreach and 
        Technical Assistance Program, as well as identify persons from 
        these committees, institutions and organizations to assist in 
        the development of marketing plans. Furthermore, the Farm 
        Credit System Diversity Workgroup should also identify members 
        from the aforementioned committees, institutions and 
        organizations to assist in the development of its programmatic 
        efforts to reach historically underserved farming communities. 
        The development of such relationships is essential if progress 
        is to be made in expanding credit to this growing market.
          ``As required by Section 4.19 of the Farm Credit Act, Farm 
        Credit System associations and institutions should continue to 
        tailor credit programs and services to address the needs of 
        Young, Beginning, and Small farmers and ranchers. Although 
        these programs do not have the explicit objective of advancing 
        customer diversity and inclusion, these programs should be used 
        as essential outreach portals to socially disadvantaged farmers 
        and ranchers. As mentioned in a previous section of these 
        comments, the current participation rate data of the USDA 
        Beginning Farmers and Ranchers Program serves as a cautionary 
        illustration of how well-intentioned programs can neglect the 
        needs of historically underserved farming communities, 
        especially if these communities are not included throughout the 
        program development process.
          ``Moreover, the final rule should emphasize the importance of 
        allowing institutions to use discretion in determining whether 
        farmers are creditworthy and eligible to borrow. If the Farm 
        Credit System institutions want to make significant strides in 
        serving historically underserved farming communities, these 
        institutions must recognize that their credit requirements 
        should not be rigidly enforced and should allow for case-by-
        case exceptions (i.e., waiver or lowering of collateral 
        requirements). The language `creditworthy and eligible to 
        borrow' should not be interpreted or implemented in such a 
        manner to undermine the spirit of the proposed rule, which is 
        to make the institutions more responsive to the needs to 
        historically underserved farming communities.
  ``The Final Rule Should Include Revisions to the Proposed Rule's 
        Working Definition of Diversity
          ``Throughout the proposed rule, diversity is purported to be 
        achieved through the inclusion of all individuals of varying 
        race, ethnicity, sexual orientation, age, disability, social 
        class, religious and ideological beliefs and not through a list 
        of demographic criteria.
          ``This working definition of diversity is problematic and 
        provides a loophole for institutions to avoid implementing a 
        marketing plan that actually promotes diversity and 
        inclusiveness within the institutions' borrower base. 
        Demographic criteria should be given equal weight in 
        determining whether institutions are in fact providing equal 
        access to credit to all farmers.
          ``Consequently, an institution's commitment to diversity and 
        inclusion cannot be ascertained by an institution's lofty 
        mission statement (as suggested by the Farm Credit 
        Administration's Request for Comments) rather by the 
        institution's actions and achievement of assessment benchmarks. 
        The final rule should include a revised definition of diversity 
        to address these concerns and should also assure that the 
        diversity includes actual borrowers or potential borrowers from 
        the socially disadvantaged community who actually understand 
        the issues, the history and the complexity of small rural 
        communities and their racial, ethnic and gender dynamics and 
        history.
  ``The Final Rule Should Require the Farm Credit System Institutions 
        and Diversity Workgroup to Make Their Final Marketing Plans and 
        Participation Rate Data Public
          ``The Farm Credit System Diversity Workgroup was established 
        in 2006 to increase diversity awareness, promote understanding 
        of inclusiveness, and serve as a diversity resource within the 
        Farm Credit System. Since its inception, the Diversity 
        Workgroup is purported to have sponsored a diversity 
        conference, several trainings workshops, speakers, outreach and 
        communications. Despite the laudable efforts of the Diversity 
        Workgroup, the effectiveness of the Workgroup's efforts to 
        achieve a more inclusive workforce and borrower base must be 
        evaluated through various assessment and accountability 
        benchmarks. For example, some pertinent questions that must be 
        addressed by the Diversity Workgroup [and at the current time 
        by the Farm Credit System and lenders in General]:

      ``(1)  How many farmers from historically underserved farming 
            communities 
                have applied for and received loans from Farm Credit 
            System institutions;

      ``(2)  Are the institutions' borrower base reflective of the 
            market segmentation 
                of their chartered territories? If not, what specific 
            steps has the Workgroup 
                recommended to the institutions to ensure they adhere 
            to their mandate 
                of providing equal access to credit to all farmers.

          ``The final rule should require the Farm Credit System 
        institutions and Diversity Workgroup to make their marketing 
        plans as well as their assessment and accountability findings 
        public. Moreover, if there are egregious shortcomings in the 
        marketing plans efforts to respond effectively to the needs of 
        historically underserved farming communities, these plans must 
        be revised to address these gaps in services. In essence, the 
        institutions should view their marketing plans as fluid plans 
        that can be amended as necessary to be more responsive to the 
        institutions' diverse borrower base.
          ``. . . Farm Credit System institutions should take 
        affirmative steps to ensure that data systems are in place to 
        record the important demographic and participation rate data of 
        all borrowers to allow comparisons and track progress.
  ``The Final Rule Should Require Farm Credit System Banks and 
        Associations Board of Directors to Appoint Directors From 
        Historically Underserved Farming Communities or Community Based 
        Organizations that Serve Socially Disadvantaged and Limited 
        Resource Farmers
          ``Reiterating Farm Credit Administration Bookletter BL-009, 
        the proposed rule encourages all Farm Credit System 
        Institutions' Board of Directors to appoint directors to serve 
        on the Board that would further the aim of facilitating 
        diversity, when feasible. Again, the discretionary language of 
        the proposed rule (i.e., `encourages') will not bring about 
        transformative change in the corporate culture of the Farm 
        Credit System institutions. In order to bring about substantive 
        change in the corporate culture of these institutions, the 
        final rule should mandate that at least one appointment to the 
        institution's Board of Directors be a member from a 
        historically underserved farming community or a community-based 
        organization that serves socially disadvantaged or limited 
        resource farmers.''

    Now in 2019, we further recommend a review of racial, ethnic and 
gender diversity among the directors and staff of the lending 
institutions of the Farm Credit System.
    While some statutes have been updated since our recommendations in 
2011, we see no evidence FCA has changed their systems to comply with 
ECOA and to assure fair service to all borrowers and potential 
borrowers. The GAO report should address these fundamental issues of 
the ability of the Farm Credit System and guaranteed lenders to assure 
fair service to all producers, as ECOA requires them to do.
VIII. Conclusion
    The results and findings of a comprehensive study could assist 
lender and government agencies with the legal mandate to offer the same 
loan products and loan servicing options offered to each and every 
farmer regardless of social status. The success of highlighting 
irregular farm lending patterns, and lack of systems to address these 
patterns, will be instructive to all farmers, lenders and reduce the 
overall costs of farm lending transactions while preventing 
questionable or unlawful family farm foreclosures.
[Attachments]
[Letter 1]

December 18, 2014

  [Redacted]
  Email address: [Redacted]

  Re: Document No. [Redacted]

    Dear [Redacted],

    We are writing to acknowledge your November 21, 2014, email sent to 
[email protected] and your November 25, 2014, conference call with 
members of the Farm Credit Administration (FCA) staff advising us of 
your concerns with the operations of AgSouth Farm Credit, ACA (AgSouth 
or Association). In your email, you inquired about filing a 
discrimination complaint against AgSouth. In your conference call with 
FCA staff also explained that you were facing foreclosure. We have 
initiated a review of the servicing of your loan and will respond to 
you as soon as our review is completed.
    This process generally requires several weeks to complete. If we 
have not completed our review within 30 days of the date of this 
letter, we will notify you by email of the status of our review. Please 
understand that in the process of conducting our review, we may contact 
AgSouth to obtain information regarding the issues you raised. While we 
do not share with the Association details of our telephone conversation 
with you, we may need to reveal your name and certain details to 
resolve your complaint.
    Before concluding, I would like to briefly explain who we are and 
the authorities that we have. The FCA is an independent Federal agency 
that regulates and examines Farm Credit System (System) institutions. 
We also ensure that System institutions operate in a safe and sound 
manner and in compliance with applicable laws and regulations. Although 
part of our mission is to evaluate borrowers' concerns of wrongdoing by 
institutions like AgSouth, we can intervene in those institutions' 
business decisions only if their decisions violate applicable laws or 
regulations. We also cannot mediate disputes between those institutions 
and their borrowers. Please note that there are limitations on what we 
can do:

   We cannot act as a court of law.

   We cannot give you legal advice.

   We cannot become involved in complaints that are in 
        litigation or have been litigated.

   We cannot intervene in business decisions of a Farm Credit 
        System institution that do not violate laws or regulations, nor 
        can we intervene in any way that would adversely affect the 
        safety and soundness of the institution.

   We cannot mediate or adjudicate disputes between Farm Credit 
        System institutions and borrowers.

    Please include your document number (provided above) on any future 
correspondence you send us. If you have questions, please call us at 
[Redacted].
            Sincerely,
            
            
Michael A. Stokke, Director,
Office of Congressional and Public Affairs.
[Letter 2]
December 19, 2014

  Hon. Jill Long-Thompson,
  Farm Credit Administration,
  McLean, VA

  RE: Document No. 13184

    Dear Ms. Long-Thompson:

    We write to you on behalf of Mr. [Redacted] a [Redacted] year old 
African-America farmer in South Carolina who without immediate action 
faces the loss of his redemption rights to redeem the farm his 
grandparents owned and operated as a cattle operation in [Redacted], 
South Carolina for over 65 years, and [Redacted] acres of which they 
deeded to Mr. [Redacted] in 2006.
    In 2008, Mr. [Redacted] began a long, tedious process to seek 
financing through AgSouth Farm Credit to purchase additional farm 
equipment, obtain a line of credit, and obtain financing to apply as a 
down payment on a [Redacted] acre operating farm he purchased in 
[Redacted], South Carolina.
    He has since struggled to secure access to credit and NAP to 
operate both farms, and on December 1 of this year, his farms were 
foreclosed on. It is our understanding that he has until December 31, 
2014 to exercise his right of redemption on the [Redacted] farm his 
grandparents owned, a farm that is now in the possession of AgSouth 
Farm Credit.
    Mr. [Redacted] has communicated the details of his situation to the 
Rural Coalition, and has also filed a discrimination complaint with 
Farm Credit Administration. Your Office of Congressional and Public 
Relations has responded with a letter of December 18 that you are 
reviewing his complaint, referred to in Document No. 13184, noting that 
it may take up to 30 days to review his complaint and you will let him 
know if more time is needed.

    We therefore urge Farm Credit Administration to advise AgSouth Farm 
Credit to postpone the scheduled sale of this land on December 31, 2014 
until a full review is completed of all matters related to the 
servicing of this loan under the terms of the Equal Credit Opportunity 
Act and all other applicable statutes. We further urge FCA and AgSouth 
Farm Credit to advise Mr. [Redacted] in detail exactly what redemption 
rights he has to reclaim this property before, during and/or after a 
final sale.

    Mr. [Redacted] has shared the details of his situation with the 
Rural Coalition and requested our assistance, which as of December 5, 
2014 we have formally agreed to provide on his behalf. We have acted in 
support of and on behalf of Mr. [Redacted] because we strongly believe 
that it is young producers such as himself that are critical to the 
future of all farmers and ranchers, and particularly African American 
farmers, in U.S. agriculture. As such, Mr. [Redacted]'s case is of 
utmost importance to our Coalition, its members and farmers. The elder 
farmers of the Rural Coalition, including the leaders of our Farm and 
Ranch Team, have made the commitment to mentor and work with Mr. 
[Redacted] to assure his future viability. If Mr. [Redacted] fails in 
his desire to maintain land that has been in his family for generations 
and to secure a future in farming, then all of us have failed. Moving 
forward, we believe it would be most beneficial to all of us to figure 
out ways to work together to assure this future.
    We are also writing to seek the assurance that Farm Credit 
Institutions such as AgSouth Farm Credit, that are accorded Preferred 
Lender Status and the guarantee of loans on the faith and credit of the 
United States through the USDA Farm Service Agency, value young 
farmers, and especially African American and other diverse farmers and 
ranchers, as important an asset as the value of their land. We 
understand there are fiduciary duties, and emphasize that one of them 
is to assure the terms of the Equal Credit Opportunity Act are met in 
letter and spirit in your lending policies, procedures and practices.
    We believe that providing equal credit opportunity should also be 
viewed as an investment and market issue for FCA and Farm Credit System 
lenders. In the attachment to this letter, we have included our recent 
brief on how the sector of diverse producers that we serve is 
expanding. We believe that as our Coalition and others keep working for 
the transformation of systems and relationships, the sector has the 
potential to grow further, and each diverse producer that has a 
successful relationship with a Farm Credit System institution is a 
critical link to Farm Credit System's potential future market within 
this sector.
    That being said, we turn to the question of the standard of service 
provided to Mr. [Redacted] and the processes and procedures by which 
FCA and its members have observed this standard. We strongly feel the 
details of his case merit an immediate and complete onsite review that 
also affords Mr. [Redacted] the ability to more fully present his view 
of the matter.
    We have observed that the processes by which the rights of 
producers are assured by both Farm Credit System lenders and the 
multiple agencies of the U.S. Department of Agriculture, while 
intricately linked, remain confusing and profoundly unclear, and not 
only to those of us who have worked as advocates for many years. Mr. 
[Redacted] has been left on his own to navigate a series of conflicting 
messages and unclear assurances of his rights and how they intersect 
between the many institutions, agencies and processes. Some of the 
advice he has received is not correct.
    We believe that a review of Mr. [Redacted]'s history with the 
AgSouth Farm Credit should begin with the question of whether he 
received the same service and standard of service as other producers at 
every step of the way from the time he first sought a loan. Mr. 
[Redacted] has come to believe that on the basis of his race, he did 
not receive the same standard of service and assistance, and that is 
the basis of his complaint, which we support.
    Mr. [Redacted] has also told us that as he sought to bring a buyer 
before his land was foreclosed on December 1 of this year, he was told 
that AgSouth Farm Credit would not release the lien. Mr. [Redacted] 
says that one reason communicated to him through his attorney was the 
fact that as guarantor, that USDA Farm Service would need to sign off 
and was likely not to wish to do so. Mr. Pressley was told at the same 
time that USDA did not have the authority to impose a moratorium on 
accelerated action on a guaranteed loan as it can when a civil rights 
claim is active on a direct loan. We seek clarification on how the 
rights of a farmer are protected and exercised in cases where both FSA 
and Farm Credit lenders have an interest. Thus, in Mr. [Redacted]'s 
case, in what way was Farm Service Agency consulted, and did FSA in 
this or any other case have or exercise the authority or interest in 
rejecting this release of the lien?
    As FCA moves forward with its review of this matter, we seek 
additional information on what process will be used to conduct this 
review, and under which statutes. We have observed that FCA has a 
comprehensive nondiscrimination policy on Equal Employment Opportunity, 
and a person responsible to implement this policy. Similarly, there is 
a policy and structure related to ethics. With respect to Equal Credit 
Opportunity, borrowers are referred to the Office of Congressional and 
Public Relations. Similarly, those with complaints related to their 
borrowers rights are directed to the same office. However, among 
borrowers rights detailed on the website, nondiscrimination is not 
listed. In a cursory review we were also not able to find an 
affirmative non-discrimination statement on Equal Credit Opportunity 
similar to the policies on Equal Employment Opportunity.
    We request information on what process and capacity reside in the 
Office of Congressional and Public Relations to conduct either a 
borrowers rights or equal credit opportunity review, why this office is 
assigned the responsibility for this review, and whether this review 
will include all relevant statutes including those related to equal 
credit opportunity. What ability does Mr. [Redacted] or any borrower 
have to provide information to this process? On the website and in your 
communication to Mr. [Redacted] there are numerous disclaimers about 
the authority of Farm Credit Administration to enforce these rights or 
to intervene if equal credit opportunity is not duly observed.
    The information on the website seems to suggest that the borrower 
will have to resolve these issues directly with the lender. But on the 
AgSouth website, borrowers are told that if they have a concern related 
to Equal Credit Opportunity they should take those concerns to Farm 
Credit Administration. What authority and process does Farm Credit 
Administration or AgSouth Farm Credit have to resolve Equal Credit 
Opportunity Claims, and can it do so in a manner that is designed to 
protect the rights of the borrowers as well as those of the 
institution? Where and how can such claims be reviewed and with what 
protections to the borrower? If the above is not a resolution process, 
what process is open to Mr. [Redacted] and other borrowers and by what 
method can their rights be secured?
    We ask the above questions with reference to what has already 
happened. In Mr. [Redacted] first contact to your office, the Assistant 
Director of the Office of Congressional and Public Relations and Mr. 
Eric Ovsiew, whom we understand is an attorney, were the first to whom 
Mr. [Redacted] was directed, and following their conversation, rather 
than providing some neutral format or procedure to file a complaint, 
they wrote back on November 26, 2014 with very specific questions that 
we would wish to assure would be in a borrower's interest to answer. 
How will such information be used, and how would it contribute to the 
ability of FCA to assure that Equal Credit Opportunity is afforded to 
Mr. [Redacted] and any other borrower by AgSouth Farm Credit or any 
other Farm Credit System lender?
    We believe protections are especially important because in our 
experience working with thousands of diverse producers, we have found 
disparities in treatment at many levels, but especially in the use of 
appraisals to value land. We are especially concerned that the 
appraised value of the property in question has sharply declined, and 
Mr. [Redacted] stands to be held liable for many thousands of dollars 
of repayments of the guaranteed farm loan loss claims while others 
might obtain his land at a fraction of the assessed value for which he 
was first provided financing, while any risk to the lender is absorbed 
by the government and the borrower through the guaranteed process.
    We have already raised with USDA the need to assure that much 
clearer information is provided to Mr. [Redacted] and all other 
producers of their borrowers rights and their right to equal credit 
opportunity under both direct and guaranteed loans both separately and 
as they intersect. We have urged USDA, and raise also to you the need, 
to clarify the process to secure these protections and to secure them 
in the timely manner necessary to avoid the foreclosure and losses that 
Mr. [Redacted] and others have incurred.
    We cannot afford to lose another generation of African American 
producers to the same systemic inequities we have worked so hard to 
root out and eradicate. The leadership of Farm Credit Administration 
has stated its commitment to diversity and inclusion. We seek to 
understand how this commitment operates in practice. Immediate action 
is essential to assure Mr. Pressley's future in agriculture, and his 
future and that of his generation of farmers and ranchers matters to 
all of us.
    We urge you to see the sale on December 31 is halted until such 
time as a fair review is completed and Mr. [Redacted]'s equal 
opportunity, borrower and redemption rights are assured. We may be 
reached at the address above, or by contacting Lorette Picciano by 
email at [Redacted]. An alternate phone number when our office is 
closed is [Redacted].
            Sincerely,
            
            

 
 
 
John Zippert,                        Georgia Good,
Chair Person,                        Vice Chairperson;
 

                                     
                                     

 
 
 
Lorette Picciano,                    Willard Tillman,
Executive Director,                  Board Member.
 

          The Rural Coalition, born of the civil rights, indigenous 
        rights, and anti-poverty rural movements, has worked since 1978 
        to assure that diverse organizations from all regions, ethnic 
        and racial groups, women and men, and youth and elders, have 
        the opportunity to work together on the issues that affect them 
        all. The foundation of this work is strong local, regional and 
        national organizations that work to assure the representation 
        and involvement of every sector of this diverse fabric of rural 
        peoples.

CC:

    [Redacted], Farmer;
    Kenneth A. Spearman, Board Member, Farm Credit Administration;
    Leland A. Strom, Board Member, Farm Credit Administration;
    Charles R. Rawls, General Counsel, Farm Credit Administration;
    Michael A. Stok[k]e, Director, Office of Congressional and Public 
    Affairs, Farm Credit Administration;
    Charles C. Rucks, Chairman, AgSouth Farm Credit, ACA;
    William T. Robinson, Vice Chairman, AgSouth Farm Credit, ACA;
    Walter W. Douglas, Outside Director and Member, Governance and 
    Ethics Committee, AgSouth Farm Credit, ACA;
    Ken Auer, President and CEO, Farm Credit Council;
    Tom Vilsack, Secretary, United States Department of Agriculture 
    (USDA);
    Val Dolcini, Administrator, USDA Farm Service Agency;
    Chris Beyerhelm, Deputy Administrator for Farm Loan Programs, USDA 
    Farm Service Agency;
    Joe Leonard, Ph.D., Assistant Secretary for Civil Rights;
    Benny Bunting, Advocate;
    Savonala Horne, Esq., North Carolina Association of Black Lawyers 
    Land Loss Prevention Project;
    Alfonzo Abeyta, Farmer and Co-Chair, Rural Coalition Farm and Ranch 
    Team;
    Ben Burkett, Farmer and Co-Chair, Rural Coalition Farm and Ranch 
    Team.
Attachment
    ``The Census of Agriculture Shows Progress in Maintaining Diverse 
Producers in Agriculture,'' prepared by Rural Coalition, October 2014.*
---------------------------------------------------------------------------
    * Editor's note: The document entitled, The Census of Agriculture 
Shows Progress in Maintaining Diverse Producers in Agriculture listed 
as an attachment was not included in the submission by the Rural 
Coalition/Coalicion Rural for the March 25, 2021. A news release of the 
same title exists on the Rural Coalition/Coalicion Rural website; 
however, it is dated May 2015, and appears to have been updated July 
24, 2018 (https://www.ruralco.org/press-releases/2018/8/31/the-census-
of-agriculture-shows-progress-in-maintaining-diverse-producers-in-
agriculture-june-7-2018). Due to the conflicting date information it 
has not been included in this publication, nor has it been retained in 
Committee file.
---------------------------------------------------------------------------
                                 ______
                                 
Submitted Article by Hon. Jim Costa, a Representative in Congress from 
                               California


[https://www.chicagotribune.com/news/ct-xpm-2006-05-15-0605150155-
story.html]

Chicago Tribune
Hmong poultry farmers cry foul, sue
Howard Witt, Tribune Senior Correspondent

May 15, 2006, Ozark, Ark.

    When Eric Xiong quit his factory job and bought a modest turkey 
farm nestled here in the Ozark Mountains three years ago, the 32 year 
old Hmong immigrant from Laos thought he had finally snagged his piece 
of the American dream. At last he could leave behind a string of dreary 
manufacturing jobs, be his own boss and provide for his wife and two 
young children.
    But the harder Xiong worked, it seemed, the more money he lost. The 
first year he fell $20,000 short of what he needed to pay his bills. 
The next year he lost $50,000 more. By the end of last year, he had 
depleted his savings, stopped paying the mortgage on his farm and 
started borrowing from relatives to put food on the table. He declared 
bankruptcy a few months ago.
    ``When we bought this farm, the bank promised us it would provide 
us a decent living,'' he said. ``But we've been losing money from the 
very first day.''
    If Xiong's story were isolated, it might be written off as another 
sadly familiar tale of an inexperienced small farmer gone bust in the 
notoriously difficult poultry business. Except that Xiong is far from 
alone.
    Across Arkansas, Oklahoma and southern Missouri, more than a dozen 
Hmong poultry farmers--most of them uneducated Vietnam-era refugees 
with little command of English--have filed for bankruptcy protection 
this year. Hmong community leaders and advocacy groups estimate that 
scores of others are in financial trouble.
    All of the farmers in bankruptcy appear to have paid far more for 
their farms than they were worth and are saddled with large mortgages 
they cannot repay. Most say they were told to sign loan documents they 
didn't understand that seemed to greatly overstate the income potential 
of their farms and understate their expenses.
    Now small-farmer support groups, attorneys and Agriculture 
Department officials are asking whether some of the Hmong, who began 
moving here five years ago from Minnesota, Wisconsin and California, 
were defrauded.
    All the loans have one feature in common: They are guaranteed by 
the U.S. Department of Agriculture's \1\ Farm Service Agency program to 
assist minority farmers, which pays off up to 95 percent of each loan 
if the farmer defaults, thus relieving the banks of nearly all risk.
---------------------------------------------------------------------------
    \1\ https://www.chicagotribune.com/topic/politics-government/
government/u.s.-department-of-agriculture-ORGOV0000241-topic.html.
---------------------------------------------------------------------------
    Advocates for the Hmong wonder whether an informal ``good old boy'' 
business network spread the word that the Asian immigrants, who 
typically had cash for down payments, were easy marks--and a chance to 
unload troubled farms.
    ``The banks don't give these loans much scrutiny because they know 
the Federal Government will repay them if the farmer defaults,'' said 
Sean Brister, an attorney in Fayetteville, Ark., whose firm has filed 
six lawsuits in recent weeks on behalf of Hmong farmers.
Moving Into Region
    Others perceive racial motives in a place where Asians and other 
minorities are not frequently encountered. The Hmong stand out because 
few have learned English or assimilated decades after they began 
arriving in the U.S. from refugee camps in Thailand, where they were 
driven in 1974 after backing U.S. troops battling Laotian communists.
    The first few Hmong farmers arrived here in 2001 to buy poultry 
farms. Now Hmong community leaders estimate that 500 Hmong families 
operate poultry farms in the three-state region.
    ``I'm finding ethnic prejudice in all of this,'' said Jim Pate, an 
attorney in Russellville, Ark., and Vietnam veteran representing 
several Hmong farmers in bankruptcy court. ``In almost every case, when 
the banks set them up with these loans, they were preparing them to 
fail.''
    The attorneys and advocates involved stop short of alleging any 
conspiracy to defraud the Hmong farmers, or even direct collusion 
between the various banks and appraisers involved in all of the cases. 
And they acknowledge that some of the bankruptcies might be the result 
of market forces: The rush of Hmong to the region seeking to buy 
poultry farms bid up prices beyond what the inexperienced farmers could 
sustain.
    Yet there are hard-to-explain similarities in the paperwork for a 
number of the loans.
    In some cases, bank loan officers added 30 percent or more to the 
income estimates provided by the poultry companies that issued the 
production contracts to the farms. In others, the banks added projected 
income from the sale of poultry litter--a waste product farmers 
typically must pay haulers to remove.
    ``I don't have a good answer to the question of whether this is all 
organized in some way,'' said Scott Marlow, director of farm 
preservation for the Rural Advancement Foundation International in 
Pittsboro, N.C., who has reviewed the Hmong situation. ``What I can say 
is that across a series of applications that we read, chunks of the 
applications would be identical or very similar.''
    In four cases Brister is pursing, loan officers from different 
banks filled in similar estimates of $18,000 to $20,000 for the Hmong 
family's living expenses--regardless of family size.
    In Xiong's case, that expense estimate allowed for just $9 per day 
to feed his family of four.
    Unlike many of the Hmong families in the region, Xiong speaks 
English well and holds an advanced university degree. But he says his 
education did not help him understand the financial paperwork 
associated with the purchase of his 143 acre turkey farm in early 2003.
    Among those papers is a letter from Cargill Turkey Products, which 
issued the production contract to the farm Xiong bought. In the letter, 
addressed to a loan officer at Regions Bank in Ft. Smith, Ark., Cargill 
predicted Xiong could earn $107,000 to $156,000 by raising turkeys and 
selling them to Cargill.
    But when the loan officer filled out a Federal loan guarantee form 
forecasting Xiong's income, he wrote down $186,320, plus $4,670 for the 
sale of litter waste--nearly $35,000 more than the highest estimate 
provided by Cargill.
    Other documents included in Xiong's lawsuit allege that the real 
estate appraiser inflated the number of turkeys the farm could sustain 
and misrepresented the age of the buildings on the property, both of 
which helped to justify the $865,000 that Xiong paid for the farm.
Denying Misrepresentations
    The real estate appraiser named in the lawsuit did not return calls 
seeking comment. But for their part, Regions Bank officials strongly 
deny that they misled Xiong or any other Hmong farmers or purposefully 
wrote unsustainable loans.
    ``We don't make loans that we think people are not going to be able 
to repay,'' said Mike Cialone, president of the Regions Bank branch 
that issued Xiong's mortgage.
    But advocates for the Hmong contend that the banks stood to benefit 
in several ways. Many of the sales involved farms that already were 
troubled and in danger of default, so selling to the Hmong meant 
converting shaky mortgages into mortgages with government guarantees. 
And the higher sale prices paid by the Hmong meant bigger loans and 
more interest revenue.
    Federal agriculture officials overseeing the guaranteed loan 
program say they have heard anecdotal evidence of a handful of Hmong 
bankruptcies but have yet to find clear trends that might point to 
malfeasance.
    But they acknowledge that they do not normally scrutinize loan 
guarantee applications received from ``preferred'' bank lenders in the 
Farm Service Agency program, such as Regions Bank, according Bob 
Bonnett, chief of the guaranteed loan division. The officials say they 
are reviewing the lawsuits and bankruptcy petitions.
    ``It is a crime if people are being taken advantage of down 
there,'' Bonnett said. ``If we find out that has been happening, we 
will take action.''
    Any such enforcement action will come too late to help Xiong, 
however, who expects he will lose his farm when the bankruptcy 
proceeding is complete.
    ``After the first year, when it was clear that I could not support 
this farm, I called the real estate agent and told her I wanted to 
sell,'' Xiong said. ``She said it was worth $200,000 less than what I 
paid for it--what she let me pay for it. I put my trust into other 
people and they took advantage of me.''
                                 ______
                                 
Submitted Hearing by Hon. Jim Costa, a Representative in Congress from 
                              California *
---------------------------------------------------------------------------
    * Editor's note: The current extant link for an electronic copy is 
a Digitized by Google pdf: https://books.google.com/
books?id=hN8iL0W1XbAC.








          * * * * *

   STATEMENT OF PHENG VUE, PRESIDENT, CALIFORNIA HIGHLANDER 
                       COOPERATIVE, INC.

    Mr. Vue. Thank you, Mr. Chairman, and members of the 
subcommittee for giving me this opportunity to testify on the 
treatment of minority and limited resource producers by the 
U.S. Department of Agriculture.
    My name is Pheng Vue. I'm a farmer. Before I became a 
farmer, I was working for Hmong Organization. We receive 
funding from the Federal Government, local government to 
provide education, social adjustment, job development to our 
people. Nowhere do programs protect the Southeast Asian 
farmers.
    Day to day, year by year many farmers are approaching me 
asking for assistance. I made a decision that I should quit my 
job and join them as a farmer, see what kinds of problems they 
have. So I become a farmer.
    I have been a farmer almost 6 years. Mr. Chairman, about 15 
years ago, I mean, back in 1980, there were less than 30 
Southeast Asian farmers in the San Joaquin Valley of 
California. In 1988, the number increased to about 800 farmers, 
today more than 1,000 Southeast Asian farmers in the San 
Joaquin Valley of California.
    We produce strawberries, cherry tomatoes, greenbeans, 
sugarpeas, squash, and many other Oriental vegetables. The 
total production values are over $30 million each year. The 
annual contribution to the agribusiness in the San Joaquin 
Valley are over $10 million from purchasing farm supplies, 
fertilizers, equipment, seeds, plants, and give the employment 
opportunity to the community.
    Along with what I stated, Southeast Asian farmers face a 
major disadvantage from not able to share the same profits as 
other groups. Each year Southeast Asians were able to produce 
lots of products. However, we could not find enough brokers to 
purchase our produce. More and more brokers say that American 
markets are too expensive. They prefer to import from other 
countries.
    This resulted in losing tons and tons of our crops each 
year. In addition, many times we were forced to sell our 
produce in a lower price, which could not even cover our labor 
costs. For this reason, how can we survive as we continue to 
produce our products to support our families?
    Today there are only two companies in the local area which 
is willing to buy our strawberries from the Southeast Asian 
farmer. However, both of these companies did not want to 
purchase the large volume of strawberries. Therefore, at this 
present time, any farmer who wishes to grow different kinds of 
strawberries worries that the market may not be suitable for 
them to grow at the meantime.
    We are also facing other major problems. There is no local 
lender willing to loan money to our people. Even though several 
of us have been banking at the same bank over 10 years, when we 
applied for a line of credit, we were denied. These practices 
did not and have not been very helpful to our community as we 
share the burden of paying income taxes to support this great 
country, just like any other American people.
    For all the years of farming that I recall since I joined 
them as farmer, we have never received any source of support 
from neither the local, State, or Federal Government such as 
farm loan, loan guarantee, or Farm Disaster Program.
    For example, in 1994, we have 16 Southeast Asian strawberry 
farmers suffer damage from the storm that destroyed their 
strawberry fields, about 90 percent of their crop. Our farmers 
contacted a Government agency in the area, but none of them 
would respond.
    The farmers also contacted the Farmers Home Administration 
in Fresno County for assistance, hopefully to qualify for 
receiving the Farm Disaster Program and the Loan Guarantee 
Program, but at the end, the answer was no. The USDA people 
said that they have never heard of any Southeast Asian farmers 
in the Central Valley of California and they don't have staff 
available to help. The same problems continue until today.
    Well, Mr. Chairman, since I have to share time with Dr. 
Chang, in my conclusion here, I would like to request you to 
look at my testimony. And I would like to request you to 
support us because we are Southeast Asians coming to this 
country without preparing. When we come here, we have only one 
skill: go back to farming. So please read my testimony and give 
us help.
    Thank you.
    [The prepared statement of Mr. Vue appears at the 
conclusion of the hearing.]
    Mr. Goodlatte. Thank you, Mr. Vue. We appreciate your 
testimony, as we do all of the witnesses.
    Mr. Powell, what steps were taken by the Department with 
regard to the particular instance of discrimination that you 
experienced and you recounted in your testimony? Has the 
Department looked into that matter? And have they conducted any 
kind of investigation or taken any action as a result?
    Mr. Powell. Yes. They conducted an investigation and found 
affirmative findings that was discriminated again, but that is 
as far as it has gone. Nobody has done anything to try and 
compensate myself nor several other farmers with the same 
affirmative findings.
    Mr. Goodlatte. How long ago was that finding made?
    Mr. Powell. I think it was in 1992 or 1993.
    Mr. Goodlatte. And have they left this record open? Did 
they say they would be back in touch regarding some action to 
be taken on it or----
    Mr. Powell. Well, we have been trying to work with them. 
And nobody has done anything to compensate me or no one else on 
these issues. All they would do is they would talk about it.
    Mr. Goodlatte. Is the file still open?
    Mr. Powell. Yes, sir, the file is still open.
    Mr. Goodlatte. When is the last time you had any 
communication with them about that?
    Mr. Powell. My attorney has been keeping the communication 
with them. I think he talked with Mr. Reeves sometime this 
week. But we have been getting talk all the time. These 
sessions like today and other days, they are very good. We 
appreciate them.
    This is time when all farmers need to be preparing their 
land, getting it ready to make a crop for the 1997 crop year. 
And if they're having trouble getting the loan, then it's going 
to be a lot of farmers that will not be able to plant a crop 
this year. This is March. Corn should be planted this month to 
be profitable.
    Mr. Goodlatte. But we will hear the Department's comments 
on that and other matters when we take that up with them 
hopefully within the next month or so. We are expecting the 
opportunity either at the subcommittee or the full committee 
level to hold some further hearings, hear the Department's 
report and their recommendations.
    Mr. Boyd, you had indicated in your testimony that there 
were 1,500 complaints pending at the Department of Agriculture, 
but only 271 of them have been acknowledged. Is that your 
position?
    Mr. Boyd. That's correct.
    Mr. Goodlatte. What do you base the 1,500 figure on?
    Mr. Boyd. Based on complaints that I have seen come through 
my organization. There are 168 active complaints in Virginia. 
They've got on that list that I gave you somewhere in the 
neighborhood of 15.
    I mean, why? I don't understand what's going on. Why have 
this Office of Civil Rights if nothing is going to be 
implemented there? This is the whole problem at the Department 
of Agriculture. There is no implementation at the Department. 
There is no accountability at the Department. And the 
Department of Agriculture needs major overhauling.
    Mr. Goodlatte. Ms. Felzien, what rules prevent officers of 
your organization from running for FSA County Committee 
positions?
    Ms. Felzien. It's section 401(b) of the ASCS handbook, 22-
PM.
    Mr. Goodlatte. And what do you think is the rationale 
behind that on the part of the Department?
    Ms. Felzien. I really do not know.
    Mr. Goodlatte. If these prohibitions were removed, what do 
you think is the best process to select the most qualified 
women to serve on county committees?
    Ms. Felzien. Going through the county committee. If we're 
addressing our county committees, you have to be a landowner. 
You fill in the application and have the ballot throughout the 
county. But she should at least be allowed to have the ability 
to run or he.
    Mr. Goodlatte. Have you personally experienced difficulties 
obtaining a loan or other services through the FSA?
    Ms. Felzien. No because I am just married to a farmer. I 
can only have the power of attorney. I am not considered a 
person that's able to do that.
    Mr. Goodlatte. Mr. Windy Boy, does the Bureau of Indian 
Affairs have any kind of outreach or educational programs to 
help Native American producers?
    Mr. Windy Boy. In the light of the way the Bureau of Indian 
Affairs is downsizing and reducing their funding through both 
Congress and the Senate, nothing that would really address 
agriculture per se.
    Mr. Goodlatte. And, Mr. Vue, have you gone to a county FSA 
office to apply for a loan? And if so, what kind of experience 
did you have?
    Mr. Vue. When we go to apply for this kind of loan, the 
first question they're going to ask, they ask ``What kind of 
crop do you plant and how many acres you have?'' That's what 
the question they would ask.
    Mr. Goodlatte. All right. Thank you. Those are all the 
questions that I have.
    The Chair recognizes the gentlewoman from North Carolina.
    Mrs. Clayton. Thank you, Mr. Chairman.
    I want to just observe that, as I might have observed when 
I thought the GAO was limited in scope, certainly the total 
effect of all of your testimony shows how pervasive and how 
widespread the discrimination is and how it's not any one group 
or one gender. It's there, and it comes in subtle ways. And it 
affects real people and timing.
    Sometimes the rules are not only things that cause persons 
to be denied of their resources, but it's attitudes. It's 
processing. A violation of the rules obviously is something you 
can get at, but you cannot get at how people respond to other 
human beings or you can't get at how slowly or how swiftly 
people process or what assistance is given and what indeed 
information is withheld and not told.
    Mr. Harris, you have been doing this for a long time. And I 
gather sometimes we can get cynical, not because you're a 
lawyer. Lawyers are cynics anyhow. But sometimes you can get 
cynical.
    You've gone through some of these. Do you perceive any 
change in attitude that gives you any sense of hope that maybe 
we won't just go through this again, that you're not all over 
again, deja vu all over again, that we really are serious there 
is a sense of hope for you in this process?
    Mr. Harris. There is a sense of hope. I have a sense of 
hope with respect to the members of the Agriculture Committees 
for both the House and Senate. Over the past 4 to 6 years, 
there have been new faces, who are very much concerned about 
these issues and have come from districts where their 
constituents are directly impacted.
    The fact that we have been able to discuss these issues 
with the current and the past Secretary of Agriculture; 
whereas, before we couldn't even meet with the person, is 
encouraging. The fact that we are having these types of 
meetings and hearings is encouraging.
    The caution that I do have is in the reality that, 
regardless of what happens in Congress and at the top levels of 
USDA, you still have the second or third largest bureaucracy in 
this country, which is entrenched.
    Mrs. Clayton. The second.
    Mr. Boyd. The second? Thank you.
    And it has a very institutional plantation mentality. And 
if we're not careful, all of our work will be for naught.
    Mrs. Clayton. There are also recommendations in the civil 
rights report that the Department of Agriculture recognizes 
that entrenchment or that system. And the accountability I 
guess is--we need to find a way where we are accountable.
    They have made some recommendations. Any comments on any of 
those recommendations that you have? That goes for any one of 
you on that to think that they would--do you see the 
recommendations that were in the civil rights report getting at 
the accountability issue, where the rules of the Federal 
Government now can be monitored and someone can be held 
accountable for their action if they are found discriminating, 
that someone above them can take----

           *         *         *         *         *

    Mr. Goodlatte. It is out of date, in other words?
    Mrs. Clayton. It is out of date. And this is the handbook 
that's precluding them from either serving on committees or for 
being treated as a separate entity if they happen to be farmers 
in that area.
    Ms. Felzien. That's correct.
    Mrs. Clayton. Would you bear with me to ask some other 
questions?
    Mr. Goodlatte. Yes. Without objection.
    Mrs. Clayton. All right. Thank you.
    I wanted to ask Mr. Windy Boy, as you noted in your 
observation that you were willing to not foreclose on that. I 
liked that little pun that you had. That was a little subtlety. 
We didn't quite all understand it, but I appreciate that you 
owned the land before we owned the land.
    Given that, you raise in your testimony that because you 
don't pay taxes, that you have found it difficult to get some 
of the services that normally other citizens get, particularly 
through the Extension Service. Am I misinterpreting that?
    Mr. Windy Boy. Yes. In fact, we do pay taxes. All Tribes do 
pay Federal taxes.
    Sitting in the back there, in reference to the GAO report, 
there was a county in Montana that has the Blackfeet Indian 
Reservation as a part of it. I just want for the record that 
that is not reflective of Indian country.
    Mrs. Clayton. That particular----
    Mr. Windy Boy. Right.
    Mrs. Clayton. But are you having difficulty receiving 
services from the--did I misread your testimony that I read 
last evening? Are you having difficulty receiving services from 
the Extension Service?
    Mr. Windy Boy. Yes, we are.
    Mrs. Clayton. What's the difficulty? And what's that based 
on?
    Mr. Windy Boy. Based on individual reports back to the 
Intertribal Agriculture Council, headquarters office in 
Billings.
    Mrs. Clayton. Has there been any effort to resolve that 
with Agriculture?
    Mr. Windy Boy. Not as such yet.
    Mrs. Clayton. Mr. Vue, I think you made the observation 
that you are not subsidized, receive no guarantees. And 
basically I share with you the product. And California is 
always reminding us that their crops are unsubsidized. But 
there is no reason why you shouldn't receive the right to make 
an application for a loan or the right to make application for 
disaster assistance or crop insurance as anyone else.
    True, row crops and vegetables and fruits are not 
subsidized as perhaps peanuts or--well, peanuts are not either; 
that's what we say, I think that's what we say--or as wheat and 
corn and others?
    But what's the basis of it? They don't know you as a 
farming group or is there something written that you want to 
refer to us to look at as to why they are denying you the right 
to make an application or----
    Mr. Vue. Yes. The second question right after the same 
question the chairman asked me, that people, USDA people at the 
Farmers Home Administration, they ask you about what kind of 
crop you plant, how many acres.
    And when you tell them you're a strawberry farmer and you 
tell the number of strawberries and they say, ``I don't think 
you are qualified for the loan, but I don't think you have the 
ability to fill out the Government paper. It's too much. And we 
don't have staff here available to help you.''
    Mrs. Clayton. That's what I'm responding to.
    Mr. Vue. That's what they told us. And we have no choice. 
Then just go home.
    Mrs. Clayton. I'm responding to your answers that say there 
is nothing, no basis in law that says that because you grow 
strawberries that you're not eligible to make an application 
unless they gave you something that you could help us. Because 
you grow strawberries is not a basis for denying you the right 
to have an application.
    Mr. Vue. I don't quite understand what you're coming----
    Mrs. Clayton. Doctor?
    Mr. Chang. I think this is an example about discrimination 
against Southeast Asians or Asians as a whole. I have my name 
here, but even appalled. At the outside, it has taken us 20 
years to come to this far today.
    The amount throughout the country, we have many people. We 
served before with the American armed forces, and we picked up 
the American pilots. And now we even not get a chance to talk.
    And back to your question, back in the old country, we are 
farmers. I brought Mr. Pheng and a couple of former soldiers 
here. They are farmers. They are farming in California and 
Wisconsin, Minnesota, Florida.
    And they do not get any support from the USDA, including 
anything, like Mr. Pheng Vue mentioned, when you ask. And they 
look at your face, look at your black hair. They don't want to 
talk to us. That's why we come in here, Mr. Chairman.
    And I hope that you take some time to listen to us. There 
is no one out there listen to us. I served only last February 
28 when they removed the national development on the 
Government. We represent hundreds of organizations throughout 
the country. We have 350,000.
    And I just walked to the USDA office and testified with Mr. 
Dan Glickman. And then Mr. Glickman assigned Mr. Schumacher to 
visit Hmong in Fresno. So this is an example. This is the first 
time in history for Hmong in Southeast Asia.
    And I think you need to spend some time and listen to us. I 
know that this is strong language, but we need your support.
    Mrs. Clayton. Thank you.
    Well, I think the reason you're here is that we want to 
learn from you as well.
    Mr. Boyd, did you submit the names or the lists of the 
foreclosures that you said occurred since the moratorium?
    Mr. Boyd. Yes, I did.
    Mrs. Clayton. So it's part of your record. That's what I 
just wanted to make sure.
    Mr. Boyd. Right.

           *         *         *         *         *

    Finally, the amount of time FSA takes to process applications from 
minority and nonminority farmers is about the same. Nationwide, from 
October 1994 through March 1996, FSA took an average of 86 days to 
process the applications of nonminority farmers and an average of 88 
days to process those of minority farmers. More specifically, for 
African Americans, FSA took 82 days; for Hispanic Americans and Native 
Americans, 94 days; and for Asian Americans, 97 days.
TESTIMONY OF CHARLIE JONCHUE CHANG
    Thank you Mr. Chairman and members of the committee for giving me 
the opportunity to speak to you on behalf of the Hmong-American on the 
subject of the Agricultural. My name is Charlie Jonchue Chang. I am the 
interim executive director of Hmong National Development, Inc. base in 
Washington, DC.
    The word Hmong may sound very new to some of you. Let me make a 
brief explain to you about who are the Hmong?. Hmong is an ethnic group 
from Laos. In the earlier 1960's, Hmong was recruited by the U.S. 
Central Intelligence Agency to pickup U.S. downed pilots and collected 
intelligence information. After the United States pulled out from 
Indochina in 1975, hundreds of thousands of Hmong had no place to go 
but to escape Laos for Thailand and eventually moved on to settle into 
third countries such as France, Canada, Australia, and mostly in the 
United States.
    Today, approximately 350,000 Hmong reside in the United States, 
over 85,000 settled in the Central Valley California, over 75,000 
settled in between the states of Minnesota and Wisconsin, and the rest 
are scattered all over the United States.
    Mr. Chairman, after arrival in this country in the mid 1970's, we 
discovered that America is the land of opportunity and has lots of land 
available for farming. Many of our people before fighting against the 
communist along side by side with the U.S. special guerrilla force used 
to be farmers. But after resettlement in this great country, we would 
like to begin our new lives here as farmer again. Since the 1970's, 
more American families left agricultural environment and move on to 
joint the high tech business in the suburban areas. For this reason, 
the United States depends more and more on foreign agricultural to 
support our nation. We, the Hmong and Laotian, saw that there were 
golden opportunities available to continue our farming skills that we 
have left over in Laos to produce crops and agricultural goods to 
support our great country, the United States.
    Beginning in 1983, the Hmong in the Central Valley, California 
first leased about 100 acres of land for farming. We produced only 
Asian vegetables, Thai chili, and cherry tomatoes to support the local 
Asian markets. Today, we own over 1000 acres of these lands and leased 
more than 10,000 acres for farming. We produce just about everything 
you see on the U.S. markets such as strawberries, cherry tomatoes, 
greenbeans, longbeans, sugarpeas, bitter melon, eggplant, lemongrass, 
Thai chili, ginseng, Asian rice, and other varieties of Asian 
vegetables.
    With all these efforts, we received no funding or support from the 
U.S. Department of Agriculture. We simply operate our agricultural 
businesses based on our natural experiences. For this reason, we face 
many obstacles along our lives such as not knowing how to use 
pesticide, improper use of chemical fertilizer and so on. There were 
many incidents occurred to the community such as Mr. Gnia Vue Thao of 
Fresno, CA died with chemical fertilizer poisoning and Mr. Kue Vue of 
North Carolina was exposed to the pesticide. He too almost died.
    According to a 1995 survey of the Fresno County, the Hmong 
community views agriculture as its vehicle to becoming economically 
self-sufficient. Based on the Hmong's agrarian background in Laos, 
coupled with Fresno County's strong agricultural potential, agriculture 
could be a good long-term and expanding source of income for the 
community. I strongly agree with this survey. Today, over 6,500 acres 
in Fresno County alone own by Southeast Asian farmers. Our farmers 
produce a variety of labor intensive, specialty crops including 
strawberries, cherry tomatoes, greenbeans, longbeans, sugar peas, 
bittermelon, eggplant, lemongrass, Thai chili, and other varieties of 
Asian vegetables. I am sure that our products have reached the markets 
throughout the United States.
    Mr. Chairman, throughout these years, our farmers have faced major 
problems such as production, marketing, finance, program and budget, 
and employment representation issues.
    Production. Our farmers face major challenges associated with the 
leasing of land, soil, quality and testing, production costs, generally 
lower than average yield, fertilizer and pesticide usage, and labor 
regulations. For the lack of English proficiency, our farmers are not 
quite able to follow the production practices as recommended by the 
Agriculture Department and local Government. Therefore, we face many 
problems in this issue.
    Marketing. Due to the lack of knowledge on the marketing issue, we 
are attempting to capitalize on our comparative advantage--labor by 
growing labor intensive crops. We could not utilize all of the 
marketing opportunities available to us to increase the average value 
of our crops. In order to reach higher-valued markets, we need the U.S. 
Government to help us improving our post-harvest handling practices and 
new varieties and crops that may provide better returns and produce a 
year round supply of income.
    Finance. Our farmers have not been able to obtain agricultural 
credit in the short or long-term in order to expand our operations, 
purchase land, equipment, and pursue marketing opportunities. There is 
no financial institution willing to loan for long-term investment to 
our community. We also generally do not qualify for Small Business 
Association loan or meet the credit requirement for any type of loans. 
For these reasons, we cannot expand our operations to the best of our 
capability.
    Program and Budget. I propose overall an agricultural economic 
development cooperative program which would offer innovative solutions 
to the problems identified as stated. I request a total of $15 million 
budgeted to assist the Hmong and Laotian farmers. I would propose that 
a Hmong national community-based organization such as the Hmong 
National Development, Inc. (HND) through the collaboration of the U.S. 
Department of Agriculture should be the non-governmental organization 
to administer and implement the program over a 5 year period. I believe 
that after the 5th year, this program can and should become financially 
self-sustaining for 1,500 Hmong/Laotian farmers in California, 400 in 
Minnesota, 600 in Wisconsin, 200 in North Carolina, and 50 in Florida.
    Employment Representation. For all the reasons above and with the 
lack of representation at the Government level, I propose that the U.S. 
Department of Agriculture should hire at least two Hmong-American 
individuals who are fluent in Hmong, Laotian, and of course English 
languages to work for the Federal Government. These individuals will 
certainly able to help Hmong and Laotian American farmers in various 
functions regarding farming and regulations.
    In conclusion, I believe that with your financial support and any 
other type of assistance, we will definitely be able to help these new 
American farmers in five major parts as described:

  (1)  Production

  (2)  Marketing

  (3)  Finance

  (4)  Program and budget

  (5)  Employment Representation

    I believe that it is possible for us to improve our economic 
situation if the U.S. Government would allocate the necessary funding 
and resources to help us in the development of programs designed to 
accelerate the farming and management of business related skills to our 
people. These methods will guaranty many of our people get out of 
public assistance and any other government dependency programs.
    In return, I believe that by the year 2002, Hmong and Laotian 
communities throughout the United States will be able to generate over 
thousand jobs, reduce welfare dependency rate by 75 percent, increase 
the sale of our products in the U.S. markets, export our products to 
foreign countries as much as possible, and produce tax revenue millions 
of dollars for our country.
    May God bless you and the American people.
STATEMENT OF PHENG VUE
    Thank you Mr. Chairman and members of the subcommittee for giving 
me this opportunity to testify about agriculture. My name is Pheng Vue. 
I am the president of the California Highlander Cooperative, Inc. I am 
here to speak and represent this organization and the Southeast Asian 
American community at the Central Valley California. I will speak on 
the issue on behalf of our success, problems, struggle, and the needs 
of the Southeast Asian farmers in the San Joaquin Valley, CA.
    The word ``Southeast Asian'' composes three different ethnic 
groups. They are: Hmong, Laotian, and Mien. So I will use the term of 
``Southeast Asian'' or ``SEA'' in my speech to represent a more broader 
perspective.
    Mr. Chairman, about 15 years ago, many of us have sought of farming 
project as our ways to make a living in this country. In 1980, there 
were less then 30 Southeast Asian farmers in the San Joaquin Valley. In 
1988, the numbers were increased up to about 800 farmers. Today, more 
than 1,200 farmers are from the Southeast Asian community in the San 
Joaquin Valley, CA. We produce strawberries, cherry tomatoes, 
greenbeans, sugarpears, squash, and many varieties of Oriental 
vegetables. The total production values are over $30 million each year. 
The annual contribution to agribusiness in the San Joaquin Valley is 
over $10 million from purchasing farm supplies, fertilizers, equipment, 
seeds, plants, to the employment opportunity for the community.
    Over the years, the SEA farmers in the San Joaquin Valley have 
managed to overcome so many obstacles. In spite of our success, there 
are many obstacles still to come if we are to grow and succeed to our 
fullest potential.
    We have many decade of experiences in the agribusiness from Laos to 
the San Joaquin Valley. We are convinced that there are still 
underdeveloped markets for our products. And with the help of the U.S. 
Government, we will be able to produce more for the markets, both 
domestic and international.
    As I mentioned earlier, as farmers, SEA have faced major obstacles 
along these years by not having the same opportunity of sharing profits 
as other groups. SEA had no choice, but to sell our products to the 
same brokers every year. That reason has left us at the mercy of the 
marketing expertise of others. Each year, we did not have buyers as we 
should, we resulted in losing tons of our products for not being able 
to sell. If not, we ended up forced to sell tons of products at a 
constant lower price than the prices originally quoted by the broker.
    Every year, many of our SEA farmers face problems of over 
production of cherry tomatoes, greenbeans, squash and many other 
varieties of Oriental vegetables. Each year, farmers ended the year 
with excessive products due to the brokers unwilling to find enough 
markets. Therefore, the problems as mentioned are often compounded when 
our farmers follow brokers and agencies recommendations to try new 
varieties of crops. The brokers often sold large amount of seeds to our 
farmers or sold us seeds for a new type of plant and promise to buy the 
products. But year after year, the brokers failed to buy all these 
products cost Hmong hundreds of thousands of dollars. Such practices 
were not acceptable to anyone, but Hmong could not complain to any 
officials or Hmong had no way of knowing who to complaint to.
    There are only two companies in the San Joaquin Valley willing to 
buy strawberries from SEA farmers. However, both of these companies ore 
limited to purchasing large volume of products Hmong produced. 
Therefore, at the present time, any farmer who wishes to grow different 
varieties of strawberries, worries that the markets may not be suitable 
for them to grow at the meantime. Thus, we need your help in finding 
market place to purchase these products so that our people can begin 
planting as they wished.
                    Financial and Government Support
    SEA farmers have been farming in the San Joaquin Valley for over 15 
years and we have never received any support from neither the local, 
State, and Federal Government agencies; such as farm loan, loan 
guarantees, nor farm disaster program.
    In 1994, 16 SEA farmers suffered damage from the storm that 
destroyed about 90 percent of their crops. Our farmers contacted many 
Government agencies in the area, but none of them were responded. The 
farmers also contacted the Farmers Home Administration in Fresno County 
for assistance hopefully to qualify for receiving the Farm Disaster 
Program and the Loan Guarantee Program, but at the end the answer was 
no. The officials said that they had never heard of the SEA farmers and 
they don't have staff available to help. The same problems continue 
today.
    SEA farmers have raised crops in the San Joaquin Valley for over 15 
years. Despite the fact that we contribute over $10 million to the 
local economy annually, the USDA reacts to us as though we don't exist. 
They feeling of not necessary for us to do business with them. This is 
sad considering that the most of our farmers are also U.S. citizens 
just like any other Americans.
    In the past, the Department of Health and Human Services, Office of 
Refugee Resettlement, and the County of Fresno Department of Social 
Service have funded some local nonprofit organizations to train welfare 
recipients to become farmers. The trainees are recruited by way of 
forcing and the trainers did not even have experience on farming 
skills. All these programs are just wasted American tax dollars. This 
funding would go to help improving the farmers' skills, at the end the 
farmers should in return able to help the welfare recipients to become 
self-sufficient[.]
    Private lenders.
    Despite SEA farmers producing a total value as indicated above each 
year, many of us who have been banking at the same local banks over the 
years, are still unable to apply for a line of credit, business loan, 
or loan guarantee without something for collateral. For these reasons, 
we ask for your help in giving us equal opportunity as any other 
American citizens.
                         Technical Assistance.
    Current technical assistance is being provided to SEA farmers by 
nonprofit organizations and some investment corporations are strictly 
funded by outsider marketing people, new varieties of crops and 
management skills training, not from the U.S. Government. These 
programs, while providing data for the trainers and specialist to 
perpetuate themselves, do very little to help our farmers.
    Often those individuals who run these programs, reported to the 
USDA, as if they represent the SEA farmers when actually they don't 
even speak the language and knowing what the community needs.
    A good example of misinformation that caused major distress as 
follows:
    On January 12, 1997, the Department of Agriculture's Civil Rights 
Listening Forum announced a public listening forum. Our California 
Highlander Coop was not notified until January 15, 1997. When we called 
to reserve a seat to speak at the Forum, we were told that someone 
already reserved the rights to speak for the SEA farmers. The 
individual claimed that he spoke on behalf of the Valley's Southeast 
Asian farmers, but in fact he was from an organization based in San 
Francisco. He also was not even a Southeast Asian origin. Therefore, we 
request that from now on, there should be a direct contact between the 
SEA farmers coop and government agencies. This is essential to limit 
the mis-information and interpretation.
    Based on the above concerns, we the SEA request our immediate needs 
as follows:
    The U.S. Department of Agriculture must hire at least two bilingual 
Hmong individuals who are fluent in Hmong, Laotian, and of course, 
English. These individuals should work closely with the SEA farmer 
communities throughout the United States.
    Funding for technical support to develop a marketing plan and 
capabilities for new markets, domestic and abroad should be provide 
equally for SEA.
      Available funding for Southeast Asia farmers for loans with low 
interest rates and without collateral.
      Access to agricultural and SBA loans just like any other 
qualified citizen.
      Able access to Government farm disaster loan programs.
      Fair share of government contracts to purchase agricultural 
commodities.
      Three to 5 year operating budget for the Co-op project for SEA.
    In conclusion, the Board of Directors and all of the members of the 
California Highlander Cooperative, are certain that with your help, we 
want to produce goods for our people. We cannot depend on foreign goods 
forever. Someone has to start to produce our own goods, and the SEA 
farmers would like to share this profits and this success in developing 
America a best place to live, to eat and to see. Not only for our own 
generation, but for our children, grandchildren, and great-
grandchildren. So that they have a place to call ``America''.
    We look forward to working with you and the U.S. Department of 
Agriculture.
STATEMENT OF LARRY W. MITCHELL
    Farmers Union's (NFU) leadership on civil rights, in an industry 
which has not been known for its progressiveness in this area, began 
many decades ago. Representing some 300,000 agriculture families, NFU 
is very concerned when anyone's civil rights is threatened. Aubrey 
Williams of the Alabama Farmers Union was one of our early leaders 
concerned with civil rights.
    When Franklin D. Roosevelt gave his first inaugural address, 
Williams decided that he belonged to the New Deal team. He went to work 
for the Reconstruction Finance Corporation in the South, where his 
skills came to the attention of FDR advisor and confidante Harry 
Hopkins.
    Hopkins brought Williams onto the staff of the Federal Emergency 
Relief Administration. There, Williams created the overall plan for the 
Civil Works Administration and agitated for a program for jobs for 
youth. This resulted in creation of the National Youth Administration 
(NYA), which Williams was appointed to head.
    At the same time, Hopkins kept Williams involved in the Works 
Progress Administration (WPA). Williams appointed Blacks to his staff 
and provoked some animosity, but he refused to observe a color line.
    Arriving at a Birmingham luncheon for NYA workers, he found an all-
white assemblage, although he had ordered that no discrimination be 
shown. The white workers were seated at the luncheon tables, and the 
Black workers were standing along the walls. Williams refused to let 
the luncheon proceed until tables were brought in for the Black NYA 
workers.
    ``I want to say as a Southerner that I covenant that the Black man 
shall have his share in a better life,'' Williams declared.
    That covenant, made so many decades ago, remains a part of the 
policy of National Farmers Union. As recently as last March at our 94th 
Anniversary Convention in Cincinnati, Ohio, Farmers Union declared:
    Although much has been accomplished to ensure freedom and equal 
opportunity for all citizens, regardless of color, sex, or national 
origin, much remains to be done.
          * * * * *
                                 ______
                                 
 Submitted Report by Hon. Jim Costa, a Representative in Congress from 
                               California
The State of Socially Disadvantaged Farmers and Ranchers in 
        California's 16th Congressional District
Prepared for Representative Jim Costa (CA-16)

By Henry L. Munoz, District Office Fellow

February 2021
Overview
    In this report, we draw information from conversations with 
community leaders, cooperative advocates, and farm service providers. 
The state of socially disadvantaged farmers in California's 16th 
Congressional District is an important concern. The overall objective 
is to illustrate the nuances disadvantage farmers and ranchers face 
every day, and to offer a path forward through policy change.
Key Areas to Focus
  1.  Build awareness of, and support for farm bill/USDA policy 
            objectives--Disseminate information regarding opportunities 
            provided by, including, but not limited to, the United 
            States Department of Agriculture (USDA) and other Federal 
            agencies for socially disadvantaged farmers and ranchers.

  2.  Ensure socially disadvantaged farmers and ranchers are included 
            in policy discussions and implementation--Create a path to 
            include socially disadvantaged farmers and ranchers in the 
            development, adoption, implementation, and enforcement of 
            food and agriculture laws, regulations and policies and 
            programs.

  3.  Empower community outreach and technical assistance from 
            cooperatives to build more resilient communities--Provide a 
            voice to key non-government outreach centers and empower 
            them to play a more active role in strengthening public 
            awareness of socially disadvantaged farmers and ranchers; 
            emphasizing a bigger role--participation at local, state, 
            and government entities where decisions on disbursements of 
            resources are made.
Context
  1.  Support for socially disadvantaged farmers and ranchers continues 
            to evolve through many political and economic environments 
            but more than ever requires a holistic approach to increase 
            their awareness of USDA's programs and services.

  2.  Inadequate funding for outreach and technical assistance to 
            support small farms; specialty crops entering a broader 
            market must be addressed.

      (a)  Lenders have several incentives to lend to larger farms.

          (1)  Operators of smaller farms typically need smaller loans, 
            and making 
                    many small loans is more time- and resource-
            intensive than making 
                    fewer, larger loans.

          (2)  Large farms often produce major commodities such as 
            corn, soy-
                    beans, and beef cattle, while small farms often 
            produce specialty 
                    crops. Underwriting loans to large farms that 
            produce major com-
                    modities is easier and less risky because more data 
            are available on 
                    the market for those products.

          (3)  Programs such as crop insurance are geared toward large, 
            major-
                    commodity farmers. These programs mitigate 
            repayment risk and 
                    make lenders more likely to approve a loan or 
            provide more favorable 
                    terms, such as lower interest rates, so it leaves 
            SDFRs without the 
                    competitive edge to move into a broader market for 
            their produce.

      (b)  A United States Farm Bill that increases funding for the 
            USDA Farming 
                Opportunities, Training, and Outreach (FOTO) Program, 
            which includes 
                the Beginning Farmer and Rancher Development Program 
            (BFRDP) and 
                the Outreach and Assistance for Socially Disadvantaged 
            and Veteran 
                Farmers and Ranchers Program (known as the 2501 
            Program), would 
                provide funding support to organizations addressing 
            inequity in land ac-
                cess and transition for SDFRs.

  3.  Socially disadvantaged farmers and ranchers require less 
            bureaucracy at local, state, and Federal Government to 
            address their challenges and provide much-needed support in 
            today's rapid economic change.

      (a)  The United States Government must take a bigger role in 
            promoting eco-
                nomic growth and prosperity for SDFRs.

      (b)  GAO-19-539 (Jul. 2019) Information on Credit and Outreach to 
            SDFRs 
                is Limited. According to SDFR advocacy groups, lending 
            industry rep-
                resentatives, and Federal officials, SDFRs are more 
            likely to operate 
                smaller, lower-revenue farms, have weaker credit 
            histories, or lack clear 
                title to their agricultural land, which can make it 
            difficult for them to 
                qualify for loans.

      (c)  SDFRs are more likely than other farmers and ranchers to 
            operate small 
                farms, which can make it difficult for them to qualify 
            for private credit. 
                According to data from the 2017 Census of Agriculture, 
            SDFRs rep-
                resented 30 percent of primary producers but operated 
            39 percent of 
                farms smaller than 50 acres and 16 percent of farms 500 
            acres or larger.

      (d)  Difficulty meeting loan underwriting standards, SDFRs face 
            challenges 
                related to historical discrimination, ongoing unfair 
            treatment by lenders, 
                and a lack of familiarity with some programs and 
            technologies when try-
                ing to obtain private agricultural credit

      (e)  There are circumstances that can limit use of the land as 
            collateral be-
                cause of lending requirements or conventions that 
            require formal proof of 
                ownership or that disallow the use of a partial 
            ownership interest as se-
                curity for a loan. SDFRs do not have a clear title to 
            their agricultural 
                land because the land was passed down informally from 
            generation to 
                generation without a will.

  4.  California farmers are some of the most diverse in the country; 
            they represent 35.1% of the country's Asian farmers, 14.6% 
            of Latino farmers, 21.9% of Native American farmers, and 
            4.9% of women farmers.

  5.  In California, less than 25% of farmers are female, and less than 
            2% of female farmers are women of color.

  6.  Uphill battle for socially disadvantaged farmers to comply with 
            many of the local, state, and Federal regulations (Example: 
            Irrigated Lands Regulatory Program (ILRP)).

      (a)  SDFRs with small-scale farms with a high diversity of crops 
            face par-
                ticular challenges in complying with the Irrigated 
            Lands Regulatory Pro-
                gram (ILRP). These challenges are especially difficult 
            for socially dis-
                advantaged, immigrant, and refugee farmers, who may 
            speak only their 
                native language or have limited English.

      (b)  Currently, there is no funding for the level of outreach and 
            technical as-
                sistance required to assist small farms with ILRP 
            reporting require-
                ments, and appropriate reporting requirements have not 
            yet been devel-
                oped.

  7.  Median total household income among all farm households ($83,111) 
            exceeded the median for all U.S. households ($68,703) in 
            2019.\1\ However, on average, socially disadvantaged 
            farmers and ranchers in California receive less in Federal 
            financial payments than their other ranchers/farmers 
            counterparts and earn much less in profits.
---------------------------------------------------------------------------
    \1\ USDA Economic Research Service. (2020, December 18). Retrieved 
from https://www.ers.usda.gov/data-products/ag-and-food-statistics-
charting-the-essentials/farming-and-farm-income/.

  8.  Socially disadvantaged farmers and ranchers are being critical to 
            the lack of U.S. funding to assist them to solve many of 
            their challenges. SDFRs face challenges using their 
            agricultural land as collateral. Many long-term 
            agricultural loans require the borrower to pledge land as 
            collateral to secure the transaction. For example, long-
            term loans (up to 40 years) made by Farm Credit System 
            institution and FSA, must be secured by a first-position 
            lien on interests in real estate, generally enabling the 
            Farm Credit System and FSA to obtain ownership or control 
---------------------------------------------------------------------------
            of the land in the event of default.

  9.  USDA must continue to build public trust on agriculture policy 
            initiatives with SDFR.

  10. Development of culturally appropriate educational programs is a 
            must and it requires more involvement from our community 
            based organizations and state and Federal agencies. For 
            example UC Cooperative Extension provides technical 
            assistance to small farmers.

  11. Direct subsidy programs are geared toward larger commodities.
Audiences
  1.  Local, State and Federal Policymakers--Enormous commitments were 
            made in support of socially disadvantaged farmers and 
            ranchers through farm bills over the last 3 decades, but 
            these vastly increased resources have also come with too 
            many obstacles. Resources must be re-focused on the 
            attainment of these farm bills objectives.

  2.  Farm Services Agency (FSA)--USDA--To define success for our 
            socially disadvantaged farmers and ranchers; we must 
            graduate from traditional ways of assistance and become a 
            full partner with community outreach center for better 
            integration, planning, and programming of Federal 
            resources.

  3.  Local Outreach--Farm Cooperatives--There is currently no funding 
            for the level of outreach and technical assistance required 
            to assist socially disadvantaged farmers with many 
            reporting requirements; for example, East San Joaquin Water 
            Quality Coalition.
A Coordinated Approach to Improving Access to Government Resources
  1.  Support for socially disadvantaged farmers and ranchers must be a 
            coordinated approach that draws upon the expertise and 
            efforts of community leaders, cooperatives, local, state, 
            and Federal agencies.

  2.  Socially disadvantaged farmer and ranchers have a raw 
            infrastructure that simply need adequate government 
            resources through grants and loans that will eventually 
            harness new technology to raise their agricultural 
            productivity and provide a more stable, nutritious and 
            affordable food supply.

  3.  Local, state and Federal agencies must link programs and policies 
            for socially disadvantaged farmers and ranchers with 
            America's values; political will and assistance through 
            programs are values in actions.
Path Forward Through Policy Change
1. Strengthen U.S. Government Farm Bill: A Bill That Truly Supports 
        Socially Disadvantaged Farmers and Ranchers
   Develop the Infrastructure

    a.  Reduce regulatory burden when asking for Federal resources; 
            ultimate mis-
              sion is to empower socially disadvantaged farmer and 
            ranchers within their 
              rural communities that feed America.

    b.  Ensure socially disadvantaged farmer and rancher inclusion when 
            reporting 
              availability of resources (e.g., community outreach, FSA, 
            cooperatives, 
              CDFA).

    c.  Provide better e-connectivity to rural areas where socially 
            disadvantaged 
              farmer and ranchers operate from.

    d.  Establish an advisory board to exchange progress to help 
            develop the most 
              effective messaging and program offerings.

   Align Other Programs

    a.  Work with FSA/USDA/OPPE/CDFA/Outreach coordinators to link farm 
            bill 
              objectives more closely to socially disadvantaged farmers 
            and ranchers' pri-
              orities through professional, cultural exchanges, 
            subject-matter expertise, 
              and speaker programs on current financial assistance 
            program.

    b.  Coordinate with all level of government entities on outreach 
            campaigns; for 
              example, the Center of Community Prosperity, under the 
            USDA Office of 
              Partnerships and Public Engagements (OPPE) hosts outreach 
            and training 
              summits and capacity-building workshops to encourage a 
            sustainable devel-
              opment process focusing on locally-driven, bottom-up 
            solutions addressing 
              challenges in rural and underserved communities.

   Share Resources

    a.  Create socially disadvantaged farmer and rancher toolkit--these 
            include in-
              formation on 2018 Farm Bill, fact sheets, testimonials/
            success stories within 
              the CA-16 and/or other districts.

    b.  Provide information on additional state legislation; for 
            example, The Farmer 
              Equity Act (AB 1348), requires inclusion of socially 
            disadvantaged farmers 
              and ranchers to take part in the decision making of 
            implementation, en-
              forcement of food and agriculture laws, regulations, and 
            policies and pro-
              grams.\2\
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    \2\ CDFA Farmer Resource Portal--The Farm Equity Act. (2020 
December 9). Retrieved from https://www.cdfa.ca.gov/farmer.resources/.

    c.  The 2501 Program has awarded 533 grants totaling more than $138 
            million. 
              This funding has helped reach socially disadvantaged 
            agricultural pro-
              ducers--farmers and ranchers who have experienced 
            barriers to service due 
              to racial or ethnic prejudice.\3\
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    \3\ USDA Outreach and Assistance for Socially Disadvantaged Farmers 
and Ranchers and Veteran Farmers and Ranchers Program (The 2501 
Program). (2021 January 08). Retrieved from https://www.usda.gov/
partnerships/socially-disadvantaged-farmers-and-ranchers.

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   Capitalize on Key Events/Releases

    a.  Develop calendar of upcoming key events; media outlets (social 
            media, tele-
              vision, internet, radio and newspaper print) wield 
            enormous influence in 
              shaping opinion and perceptions. Partnering with media 
            outlet infrastruc-
              ture is key.

    b.  Incorporate socially disadvantaged farmer and rancher key 
            messages into 
              talking points during monthly/quarterly outreach 
            meetings.

    c.  Encourage more key local/state/Federal leadership to engage at 
            different so-
              cially disadvantaged farm and ranch business locations. 
            This will allow for 
              open dialogue, unfettered debated, and freedom of 
            expression with many of 
              their challenges and concerns.
2. Shape Governmental Access to Resources Message
   Hone the Message

    a.  Coordinate and work as a team at the community, local, state, 
            and Federal 
              level to nurture common interests and values between 
            socially disadvan-
              taged farmers and ranchers and communities they 
            represent.

    b.  Provide socially disadvantaged ranchers and farmers with access 
            through 
              information sharing on management of grants, cooperative 
            agreements, and 
              other availability of local, state, and Federal financial 
            assistance.

    c.  Although farm bills have tailored policies in support of social 
            disadvan-
              taged farmers and ranchers, in many cases these polices 
            remain absent in 
              the decision-making process for financial support. These 
            decisions have cre-
              ated and upheld the inequities in our food system and 
            must be a part of 
              the bold, systemic change required to tackle these 
            challenges.

   Tout Successes

    a.  Work with FSA, CDFA, USDA and other agencies to develop 
            testimonials 
              on successes across the state and our nation that focuses 
            on socially dis-
              advantaged rancher and farmer programs.

    b.  Ensure inclusion of success stories of socially disadvantaged 
            ranchers and 
              farmers; speeches, websites/social media, outreach events 
            and to some ex-
              tent Hill testimonies.
3. Empower Socially Disadvantaged Farmers and Ranchers
  a.  Increase funding for the 2501 Program; will allow for better USDA 
            Farming Opportunities, Training, and Outreach (FOTO) 
            Program. The 2501 Program also includes the Beginning 
            Farmer and Rancher Development Program (BFRDP) and the 
            Outreach and Assistance for Socially Disadvantaged and 
            Veteran Farmers and Ranchers Program.

  b.  There must be an improved and revised access to credit for 
            socially disadvantaged farmers and ranchers through the 
            Farm Service Agencies (FSA) within our CA-16 District.

  c.  Promote virtual exchanges between socially disadvantaged farmers 
            and ranchers with community leaders, outreach centers, 
            local, state, and Federal entities that focuses on 
            providing additional resources to supplement the 2018 Farm 
            Bill; either from local or state support.
                                 ______
                                 
 Submitted Statements by Hon. Jim Costa, a Representative in Congress 
                            from California
                              Statement 1
  on behalf of will scott, j r., owner, scott family farms, founder, 
                 african american farmers of california
    My name is Will Scott, Jr. I am the owner of Scott Family Farms and 
founder of the African-American Farmers of California. My brother and 
son farm with me. We are a third generation family run farm. We farm 45 
acres of vegetables including black-eyed peas, okra, spinach and other 
vegetable crops.
    Our family moved from Oklahoma, where my grandfather, father and 
uncle were sharecroppers of 60 acres of land. My father moved to 
California when I was a teenager in 1952. He and my brothers, Charles 
and Melvin bought 5 acres and started Scott Family Farms. While I was 
attending Reedley Junior College, I was drafted into the U.S. Navy 
during my second year of college. I was in the Navy for 4 years and 7 
months from 1961-66 as a Submarine Electronic Engineer. I am a Veteran 
of the Vietnam War. Upon returning from the war, I came back to Fresno, 
got married, had children and started working for the phone company as 
an engineer designer for 30 years. Upon being offered early retirement, 
I began farming in 1994. I was determined to keep the legacy of African 
American Farmers alive and growing in California by introducing 
Southern specialty crops back into Black communities to help stop 
obesity and diabetes epidemics. I wanted to build healthy immune 
systems to pass on to the next generation.
    There was a Black Farmers organization prior to 1997, but farmers 
had lost lots of land due to high interest rates and the economy was 
seeing over 15% interest rates. Black farmers were being taken 
advantage of and a group of about 30 farmers knew we must form an 
organization to unite the existing Black farmers and participate in 
food production in California and understand the rules and regulations 
facing the farming community. We formed a nonprofit organization, the 
African-American Farmers of California in 1997. The first President was 
Al Smith. His family had been here since 1912. However, in 1998, the 
organization elected me to be the President.
    We have increased the size of the organization and have opened a 16 
acre demonstration farm, (owned by the County of Fresno) which serves 
as a testing area where new farmers can get hands-on experience growing 
a variety of produce. Farmers can lease 1 or 2 acres and then take the 
technology back to their own farm. Many of these small farmers are now 
selling their own produce at Farmer[s'] Markets in Fresno and from the 
Bay Area to Los Angeles.
    Some of the issues at the present time include problems I have 
encountered as a minority farmer. I have been denied getting into 
markets and denied entry into many farmers['] markets. I was turned 
down for a loan to put in a new water well. I had a farmer that offered 
me a personal loan.
    I went to the USDA-FSA to seek a loan for 40 acres of land. They 
told me I would have to apply for a loan with five commercial banks and 
be turned down by three of them. I was told by many of the banks that 
the area the property was located was in a ``high-risk'' area, that 
Western Fresno was ``red-lined'' as a poor area, that the area was in a 
``hodge-podge'' area. I applied at Production Credit. They told me my 
application looked good, but I never heard back from them. When I 
returned to their office and my file was opened, it contained only two 
pieces of paper. I could see they had not worked on my loan request. I 
was told I would need 30% down to obtain the loan.
    I returned to the USDA-FSA office and finally got the loan. 
However, I had to put up 150% collateral of my assets. This included my 
home and my 5 acres.
    The members of the African-American Farmers of California are 
fearful to apply for any loans, and do not want to deal with the 
Government, as they feel they will lose everything they have. I have 
encouraged them to apply for sensible programs that help to clean our 
environment. The San Joaquin Valley Air Pollution Control District has 
a program called a ``tractor trade up program,'' that allows the 
replacement of an older tractor to be traded up for a cleaner burning 
tractor with funding from the California Air Resources Board. Our 
organization will continue to encourage programs to assist farmers.
    I continue to advocate along side with the Nisei Farmers League on 
issues of concern to the family communities. I will work with all 
minority groups including Hispanic, Asian, Japanese-Americans, and 
others. We must advocate together and interact with the United States 
Department of Agriculture and our Congressmen.
                              Statement 2
        on behalf of asian business institute & resource center
    The Asian Business Institute & Resource Center (ABIRC)'s mission is 
to build a strong network of Asian American business owners to promote 
and advocate for the sustained success of Asian businesses in the 
Central California region. ABIRC assists Southeast Asian (SEA) business 
owners and farmers to access business and financial resources, develop 
business plans, marketing, access non-traditional loans, and workshops 
conducted in various languages. ABIRC advocates for small businesses 
and farmers, provides technical assistance toward certifications for 
various contractual opportunities, and many means of building capacity 
within the SEA business community.
Issue, Problem or Need
    It is estimated that there are over 1,000 independent SEA farmers 
in California's Central Valley. This SEA community is, by and large, 
considered a socially disadvantaged group with many barriers to access 
the minimum resources that industrial-sized operations have at their 
disposal. Access to culturally competent services and technical 
assistance has always been a challenge to this group of small, minority 
farmers who operate farms that are 10 acres or less; hence the name 
``micro farmer.'' Even with barriers in place, they are a rapidly 
growing segment of California's agricultural food chain and 
contributors to the local, state and national agricultural economies. 
SEA specialty crop farmers rely on the success of their small farms as 
a means of income to sustain their families.
    The COVID-19 pandemic decimated SEA micro farmers' operations. With 
the closure of farmers' markets and grocery stores, they suddenly had 
no income. ABIRC's SEA farmer census data, the largest dataset on SEA 
farmers, revealed that micro farmers had not received any crisis relief 
funding and were not aware of they existed. We attributed that to the 
lack of dissemination of these efforts to ethnic communities and the 
very definition of small business by the Small Business Administration 
(500 employees or less). The USDA's definition of specialty crops 
excluded many of the crops grown by SEA micro farmers. Public safety 
policies to close offices restricted access to service providers 
through phones manned by monolingual, not culturally competent staff 
and webpages. These actions created yet another barrier to equity. 
Traditional support through the SBA, USDA, NRCS, SBDC was limited, at 
best. Similar scenarios were observed in county and state agricultural 
agencies.
    The first round of crisis relief dollars barely reached the SEA 
micro farmers. The first dollars that reached ABIRC's constituents were 
through philanthropy. It was not until later that actual government 
relief dollars reached the SEA micro farmers through CARES dollars via 
the City of Fresno. SEA micro farmers from Fresno, Merced, Stockton, 
Sacramento and beyond would not have received any support without the 
work of ABIRC stretching its already limited resources and partners. 
Painful as it is to acknowledge, the majority of the resources to micro 
farmers were from philanthropic dollars, not CARES dollars or direct 
government relief dollars.
    Because of the existing barriers and closure of traditional sales 
markets, micro farmers are suffering. There have been numerous closures 
of farms and farmer families' economies have been decimated. Long and 
committed advocacy efforts from ABIRC and small farm organizations are 
starting to create pathways, but there is much more that needs to be 
done to mitigate the long-term negative impact of this pandemic on SEA 
micro farmers. Direct mechanisms, intentional technical assistance, and 
relief dollars need to reach this community who is subject to so many 
barriers and, since the pandemic, more prejudice. Without direct 
injection of assistance and intervention, a great piece of our local 
economy and community will be disproportionately impacted. We want to 
thank Congressman Costa's office for their continued advocacy and 
efforts to try and serve, protect, and save the SEA micro farmers.
                                 ______
                                 
    Submitted Memorandum by Hon. Alma S. Adams, a Representative in 
                      Congress from North Carolina
Opinions of the Office of Legal Counsel of the United States Department 
        of Justice Consisting of Selected Memorandum Opinions Advising 
        the President of the United States, the Attorney General and 
        Other Executive Officers of the Federal Government in Relation 
        to Their Official Duties
Legal Guidance on the Implications of the Supreme Court's Decision in 
        Adarand Constructors, Inc. v. Pena *
---------------------------------------------------------------------------
    * Editor's note: this is an excerpt from the U.S. Department of 
Justice report entitled, Opinions of the Office of Legal Counsel of the 
United States Department of Justice Consisting of Selected Memorandum 
Opinions Advising the President of the United States, the Attorney 
General and Other Executive Officers of the Federal Government in 
Relation to Their Official Duties, Volume 19, 1995. The report in its 
entirety is retained in Committee file and is available at: https://
www.justice.gov/olc/file/626891/download.
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          This memorandum sets forth preliminary legal guidance on the 
        implications of the Supreme Court's decision in Adarand 
        Constructors, Inc. v. Pena, which held that ``strict scrutiny'' 
        is the standard that governs judicial review of the 
        constitutionality of Federal affirmative action programs that 
        use racial and ethnic criteria as a basis for decisionmaking. 
        The memorandum is not intended to serve as a definitive 
        statement of what Adarand means for any particular affirmative 
        action program; rather, it is intended to provide a general 
        overview of the Court's decision and the application of the 
        strict scrutiny standard in the context of affirmative action.
                                                          June 28, 1995
Memorandum Opinion to General Counsels
    This memorandum sets forth preliminary legal guidance on the 
implications of the Supreme Court's recent decision in Adarand 
Constructors, Inc. v. Pena, 515 U.S. 200 (1995), which held that 
Federal affirmative action programs that use racial and ethnic criteria 
as a basis for decisionmaking are subject to strict judicial scrutiny. 
The memorandum is not intended to serve as a definitive statement of 
what Adarand means for any particular affirmative action program. Nor 
does it consider the prudential and policy questions relevant to 
responding to Adarand. Rather, it is intended to provide a general 
overview of the Court's decision and the new standard for assessing the 
constitutionality of Federal affirmative action programs.
    Our conclusions can be briefly summarized. Adarand made applicable 
to Federal affirmative action programs the same standard of review, 
strict scrutiny, that City of Richmond v. J.A. Croson Co., 488 U.S. 469 
(1989), applied to state and local affirmative action measures--with 
the important caveat that, in this area, Congress may be entitled to 
greater deference than state and local governments. Although Adarand 
itself involved contracting, its holding is not confined to that 
context; rather, it is clear that strict scrutiny will now be applied 
by the courts in reviewing the Federal Government's use of race-based 
criteria in health, education, hiring, and other programs as well.
    The Supreme Court in Adarand was careful to dispel any suggestion 
that it was implicitly holding unconstitutional all Federal affirmative 
action measures employing racial or ethnic classifications. A majority 
of the Justices rejected the proposition that ``strict scrutiny'' of 
affirmative action measures means ``strict in theory, fatal in fact,'' 
and agreed that ``[t]he unhappy persistence of both the practice and 
the lingering effects of racial discrimination against minority groups 
in this country'' may justify the use of race-based remedial measures 
in certain circumstances. 515 U.S. at 237. See id. at 268 (Souter, J., 
dissenting); id. at 273 (Ginsburg, J., dissenting). Only two Justices 
advocated positions that approach a complete ban on affirmative action.
    The Court's decision leaves many questions open--including the 
constitutionality of the very program at issue in the case. The Court 
did not discuss in detail the two requirements of strict scrutiny: the 
governmental interest underlying an affirmative action measure must be 
``compelling'' and the measure must be ``narrowly tailored'' to serve 
that interest. As a consequence, our analysis of Adarand's effects on 
Federal action must be based on Croson and the lower court decisions 
applying strict scrutiny to state and local programs. It is unclear, 
however, what differences will emerge in the application of strict 
scrutiny to affirmative action by the national government; in 
particular, the Court expressly left open the question of what 
deference the judiciary should give to determinations by Congress that 
affirmative action is necessary to remedy discrimination against racial 
and ethnic minority groups. Unlike state and local governments, 
Congress may be able to rely on national findings of discrimination to 
justify remedial racial and ethnic classifications; it may not have to 
base such measures on evidence of discrimination in every geographic 
locale or sector of the economy that is affected. On the other hand, as 
with state and local governments under Croson, Congress may not 
predicate race-based remedial measures on generalized, historical 
societal discrimination.
    Two additional questions merit mention at the outset. First, the 
Court has not resolved whether a governmental institution must have 
sufficient evidence of discrimination to establish a compelling 
interest in engaging in race-based remedial action before it takes such 
action. A number of courts of appeals have considered this question in 
reviewing state and local affirmative action plans after Croson, and 
all have concluded that governments may rely on ``post-enactment'' 
evidence--that is, evidence that the government did not consider when 
adopting the measure, but that reflects evidence of discrimination 
providing support for the government's determination that remedial 
action was warranted at the time of adoption. Those courts have said 
that the government must have had some evidence of discrimination when 
instituting an affirmative action measure, but that it need not marshal 
all the supporting evidence at that time. Second, while Adarand makes 
clear that remedying past discrimination will in some circumstances 
constitute a compelling interest sufficient to justify race-based 
measures, the Court did not address the constitutionality of programs 
aimed at advancing nonremedial objectives--such as promoting diversity 
and inclusion. For example, under Justice Powell's controlling opinion 
in Regents of the Univ. of Calif, v. Bakke, 438 U.S. 265 (1978), 
increasing the racial and ethnic diversity of the student body at a 
university constitutes a compelling interest, because it enriches the 
academic experience on campus. Under strict scrutiny, it is uncertain 
whether and in what settings diversity is a permissible goal of 
affirmative action beyond the higher education context. To the extent 
that affirmative action is used to foster racial and ethnic diversity, 
the government must seek some further objective beyond the achievement 
of diversity itself.
    Our discussion in this memorandum proceeds in four steps. In 
Section I, we analyze the facts and holding of Adarand itself, the 
scope of what the Court did decide, and the questions it left 
unanswered. Section II addresses the strict scrutiny standards as 
applied to state and local programs in Croson and subsequent lower 
court decisions; we consider the details of both the compelling 
interest and the narrow tailoring requirements Croson mandated. In 
Section III, we turn to the difficult question of how precisely the 
Croson standards should apply to Federal programs, with a focus on the 
degree of deference courts may give to congressional determinations 
that affirmative action is warranted. Finally, in an appendix, we 
sketch out a series of questions that should be considered in analyzing 
the validity under Adarand of Federal affirmative action programs that 
employ race or ethnicity as a criterion. The appendix is intended to 
guide agencies as they begin that process.
I. The Adarand Case
    A. Facts

    Adarand involved a constitutional challenge to a Department of 
Transportation (``DOT'') program that compensates persons who receive 
prime government contracts if they hire subcontractors certified as 
small businesses controlled by ``socially and economically 
disadvantaged'' individuals. The legislation on which the DOT program 
is based, the Small Business Act, establishes a government-wide goal 
for participation of such concerns at ``not less than 5 percent of the 
total value of all prime contract and subcontract awards for each 
fiscal year.'' 15 U.S.C.  644(g)(1). The Act further provides that 
members of designated racial and ethnic minority groups are presumed to 
be socially disadvantaged. Id.  637(a)(5),  637(d)(2), (3); 13 CFR  
124.105(b)(1).\1\ The presumption is rebuttable. 13 CFR  124.111(c)-
(d), 124.601-124.609.\2\
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    \1\ The following groups are entitled to the presumption: African 
American; Hispanic; Asian Pacific; Subcontinent Asian; and Native 
American. See Adarand, 515 U.S. at 205. This list of eligible groups 
parallels that of many Federal affirmative action programs.
    \2\ DOT also uses the subcontractor compensation mechanism in 
implementing the Surface Transportation and Uniform Relocation 
Assistance Act of 1987 (``STURAA''), Pub. L. No. 100-17,  106(c)(1), 
101 Stat. 145, and its successor, the Intermodal Surface Transportation 
Efficiency Act of 1991 (``ISTEA''), Pub. L. No. 102-240,  1003(b), 105 
Stat. 1919-22. Both laws provide that ``not less than 10 percent'' of 
funds appropriated thereunder ``shall be expended with small business 
concerns owned and controlled by socially and economically 
disadvantaged individuals.'' STURAA and ISTEA adopt the Small Business 
Act's definition of ``socially and economically disadvantaged 
individual,'' including the applicable race-based presumptions. 
Adarand, 515 U.S. at 208.
---------------------------------------------------------------------------
    In Adarand, a nonminority firm submitted the low bid on a DOT 
subcontract. However, the prime contractor awarded the subcontract to a 
minority-owned firm that was presumed to be socially disadvantaged; 
thus, the prime contractor received additional compensation from DOT. 
515 U.S. at 205. The nonminority firm sued DOT, arguing that it was 
denied the subcontract because of a racial classification, in violation 
of the equal protection component of the Fifth Amendment's Due Process 
Clause. The district court granted summary judgment for DOT. The Court 
of Appeals for the Tenth Circuit affirmed, holding that DOT's race-
based action satisfied the requirements of ``intermediate scrutiny,'' 
which it determined was the applicable standard of review under the 
Supreme Court's rulings in Metro Broad., Inc. v. FCC, 497 U.S. 547 
(1990), and Fullilove v. Klutznick, 448 U.S. 448 (1980). See Adarand, 
515 U.S. at 210.

    B. The Holding

    By a five-four vote, in an opinion written by Justice O'Connor, the 
Supreme Court held in Adarand that strict scrutiny is now the standard 
of constitutional review for Federal affirmative action programs that 
use racial or ethnic classifications as the basis for decisionmaking. 
The Court made clear that this standard applies to programs that are 
mandated by Congress, as well as those undertaken by government 
agencies on their own accord. 515 U.S. at 227. The Court overruled 
Metro Broadcasting to the extent that it had prescribed a more lenient 
standard of review for Federal affirmative action measures. Id.\3\
---------------------------------------------------------------------------
    \3\ Justice O'Connor (along with three other Justices) had 
dissented in Metro Broadcasting and urged the adoption of strict 
scrutiny as the standard of review for Federal affirmative action 
measures.
---------------------------------------------------------------------------
    Under strict scrutiny, a racial or ethnic classification must serve 
a ``compelling interest'' and must be ``narrowly tailored'' to serve 
that interest. Id.\4\ This is the same standard of review that, under 
the Supreme Court's decision in City of Richmond v. J.A. Croson Co., 
488 U.S. 469 (1989), applies to affirmative action measures adopted by 
state and local governments. It is also the same standard of review 
that applies to government classifications that facially discriminate 
against minorities. Adarand, 515 U.S. at 221-24.
---------------------------------------------------------------------------
    \4\ A classification reviewed under intermediate scrutiny need only 
(i) serve an ``important'' governmental interest and (ii) be 
``substantially related'' to the achievement of that objective. Metro 
Broad., 497 U.S. at 564-65.
---------------------------------------------------------------------------
    In a portion of her opinion joined by Chief Justice Rehnquist, 
Justice Kennedy, and Justice Thomas, Justice O'Connor sought to 
``dispel the notion that strict scrutiny is `strict in theory, but 
fatal in fact' '' when it comes to affirmative action. Id. at 237 
(quoting Fullilove, 448 U.S. at 519 (Marshall, J., concurring in the 
judgment)). While that familiar maxim doubtless remains true with 
respect to classifications that, on their face, single out racial and 
ethnic minorities for invidious treatment,\5\ Justice O'Connor's 
opinion declared that the Federal Government may have a compelling 
interest to act on the basis of race to overcome the ``persistence of 
both the practice and lingering effects of racial discrimination 
against minority groups in this country.'' Id. In this respect, Justice 
O'Connor's opinion in Adarand tracks her majority opinion in Croson. 
There, too, the Court declined to interpret the Constitution as 
imposing a flat ban on affirmative action by state and local 
governments. 488 U.S. at 509-11.
---------------------------------------------------------------------------
    \5\ See, e.g., McLaughlin v. Florida, 379 U.S. 184, 192 (1964) 
(racial and ethnic classifications that single out minorities for 
disfavored treatment are in almost all circumstances ``irrelevant to 
any constitutionally acceptable legislative purpose'') (internal 
quotations omitted); Loving v. Virginia, 388 U.S. 1, 11 (1967) (``There 
is patently no legitimate overriding purpose independent of invidious 
racial discrimination which justifies'' state law that prohibited 
interracial marriages).
---------------------------------------------------------------------------
    Two members of the Adarand majority, Justices Scalia and Thomas, 
wrote separate concurring opinions in which they took a more stringent 
position. Consistent with his concurring opinion in Croson, Justice 
Scalia would have adopted a near-absolute constitutional bar to 
affirmative action. Taking issue with Justice O'Connor's proposition 
that racial classifications may be employed in certain circumstances to 
remedy discrimination against minorities, Justice Scalia stated that 
the ``government can never have a `compelling interest' in 
discriminating on the basis of race in order to `make-up' for past 
racial discrimination in the opposite direction.'' Adarand, 515 U.S. at 
239 (Scalia, J., concurring in part and concurring in the judgment).\6\ 
According to Justice Scalia, ``[individuals who have been wronged by 
unlawful racial discrimination should be made whole; but under our 
Constitution there can be no such thing as either a creditor or a 
debtor race. That concept is alien to the Constitution's focus on the 
individual . . . .'' Id. The compensation of victims of specific 
instances of discrimination through ``make-whole'' relief, which 
Justice Scalia accepts as legitimate, is not affirmative action, as 
that term is generally understood. Affirmative action is a group-based 
remedy: where a group has been subject to discrimination, individual 
members of the group can benefit from the remedy, even if they have not 
proved that they have been discriminated against personally.\7\ Justice 
O'Connor's treatment of affirmative action in Adarand is consistent 
with this understanding.
---------------------------------------------------------------------------
    \6\ In his Croson concurrence. Justice Scalia said that he believes 
that ``there is only one circumstance in which the States may act by 
race to `undo the effects of past discrimination': where that is 
necessary to eliminate their own maintenance of a system of unlawful 
racial classification.'' 488 U.S. at 524 (Scalia, J., concurring in the 
judgment). For Justice Scalia, ``[t]his distinction explains [the 
Supreme Court's] school desegregation cases, in which [it has] made 
plain that States and localities sometimes have an obligation to adopt 
race-conscious remedies.'' Id. The school desegregation cases are 
generally not thought of as affirmative action cases, however. Outside 
of that context, Justice Scalia indicated that he believes that ``[a]t 
least where state or local action is at issue, only a social emergency 
rising to the level of imminent danger to life and limb . . . can 
justify an exception to the principle embodied in the Fourteenth 
Amendment that our Constitution is color-blind.'' Id. at 521.
    \7\ See Local 28, Sheet Metal Workers' Int'l Ass'n v. EEOC, 478 
U.S. 421, 482 (1986); Wygant v. Jackson Bd. of Educ., 476 U.S. 267, 
277-78 (1986) (plurality opinion), id. at 287 (O'Connor, J., 
concurring).
---------------------------------------------------------------------------
    Although Justice Thomas joined the portion of Justice O'Connor's 
opinion holding that the government's interest in redressing the 
effects of discrimination can be sufficiently compelling to warrant the 
use of remedial racial and ethnic classifications, he apparently agrees 
with Justice Scalia's rejection of the group-based approach to 
remedying discrimination. Justice Thomas stated that the ``government 
may not make distinctions on the basis of race,'' and that it is 
``irrelevant whether a government's racial classifications are drawn by 
those who wish to oppress a race or by those who have a sincere desire 
to help those thought to be disadvantaged.'' Id. at 240 (Thomas, J., 
concurring in part and concurring in the judgment).
    The four dissenting Justices in Adarand (Justices Stevens, Souter, 
Ginsburg, and Breyer) \8\ would have reaffirmed the intermediate 
scrutiny standard of review for congressionally authorized affirmative 
action measures established in Metro Broadcasting, and would have 
sustained the DOT program on the basis of Fullilove, where the Court 
upheld Federal legislation requiring grantees to use at least ten 
percent of certain grants for public works projects to procure goods 
and services from minority businesses. Justices Stevens and Souter 
argued that the DOT program was more narrowly tailored than the 
legislation upheld in Fullilove. Adarand, 515 U.S. at 259-64 (Stevens, 
J., dissenting); id. at 266-67 (Souter. J., dissenting). All four 
dissenters stressed that there is a constitutional distinction between 
racial and ethnic classifications that are designed to aid minorities 
and classifications that discriminate against them. As Justice Stevens 
put it, there is a difference between a ``No Trespassing'' sign and a 
``welcome mat.'' Id. at 245 (Stevens, J., dissenting). See id. (``[a]n 
attempt by the majority to exclude members of a minority race from a 
regulated market is fundamentally different from a [race-based] subsidy 
that enables a relatively small group of [minorities] to enter that 
market''); see also id. at 270 (Souter, J., dissenting); id. at 275-76 
(Ginsburg, J., dissenting). For the dissenters, Justice O'Connor's 
declaration that strict scrutiny of affirmative action programs is not 
``fatal in fact'' signified a ``common understanding'' among a majority 
of the Court that those differences do exist, and that affirmative 
action may be entirely proper in some cases. Id. at 271, 275 (Ginsburg, 
J., dissenting). In Justice Ginsburg's words, the ``divisions'' among 
the Justices in Adarand ``should not obscure the Court's recognition of 
the persistence of racial inequality and a majority's acknowledgment of 
Congress' authority to act affirmatively, not only to end 
discrimination, but also to counteract discrimination's lingering 
effects.'' Id. at 273. The dissenters also emphasized that there is a 
``significant difference between a decision by the Congress of the 
United States to adopt an affirmative-action program and such a 
decision by a State or a municipality.'' Id. at 249 (Stevens, J., 
dissenting); id. at 264 (Souter, J., dissenting). They stressed that 
unlike state and local governments, Congress enjoys express 
constitutional power to remedy discrimination against minorities; 
therefore, it has more latitude to engage in affirmative action than do 
state and local governments. Id. at 255 (Stevens, J., dissenting). 
Justice Souter noted that the majority opinion did not necessarily 
imply a contrary view. Id. at 268-69 (Souter, J., dissenting).
---------------------------------------------------------------------------
    \8\ Justice Stevens wrote a dissenting opinion that was joined by 
Justice Ginsburg. Justice Souter wrote a dissenting opinion that was 
joined by Justices Ginsburg and Breyer. And Justice Ginsburg wrote a 
dissenting opinion that was joined by Justice Breyer.
---------------------------------------------------------------------------
    Thus, there were at most two votes in Adarand (Justices Scalia and 
Thomas) for anything that approaches a blanket prohibition on race-
conscious affirmative action. Seven justices confirmed that Federal 
affirmative action programs that use race or ethnicity as a decisional 
factor can be legally sustained under certain circumstances.

    C. Scope of Adarand

    Although Adarand involved government contracting, it is clear from 
the Supreme Court's decision that the strict scrutiny standard of 
review applies whenever the Federal Government voluntarily adopts a 
racial or ethnic classification as a basis for decisionmaking.\9\ Thus, 
the impact of the decision is not confined to contracting, but will 
reach race-based affirmative action in health and education programs, 
and in Federal employment.\10\ Furthermore, Adarand was not a ``quota'' 
case: its standards will apply to any classification that makes race or 
ethnicity a basis for decisionmaking.\11\ Mere outreach and recruitment 
efforts, however, typically should not be subject to the Adarand 
standards. Indeed, post-Croson cases indicate that such efforts are 
considered race-neutral means of increasing minority opportunity.\12\ 
In some sense, of course, the targeting of minorities through outreach 
and recruitment campaigns involves race-conscious action. But the 
objective there is to expand the pool of applicants or bidders to 
include minorities, not to use race or ethnicity in the actual 
decision. If the government does not use racial or ethnic 
classifications in selecting persons from the expanded pool, Adarand 
ordinarily would be inapplicable.\13\
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    \9\ By voluntary affirmative action, we mean racial or ethnic 
classifications that the Federal Government adopts on its own 
initiative, through legislation, regulations, or internal agency 
procedures. This should be contrasted with affirmative action that is 
undertaken pursuant to a court-ordered remedial directive in a race 
discrimination lawsuit against the government, or pursuant to a court-
approved consent decree settling such a suit. Prior to Croson, the 
Supreme Court had not definitely resolved the standard of review for 
court-ordered or court-approved affirmative action. See United States 
v. Paradise, 480 U.S. 149 (1987) (court order); Local 93. Int'l Ass'n 
of Firefighters v. City of Cleveland, 478 U.S. 501 (1986) (consent 
decree) The Court has not revisited the issue since Croson was decided. 
Lower courts have applied strict scrutiny to affirmative action 
measures in consent decrees. See, e.g., Stuart v. Roache, 951 F.2d 446, 
449 (1st Cir. 1991) (Breyer, J.) cert. denied, 504 U.S. 913 (1992).
    \10\ Title VII of the 1964 Civil Rights Act is the principal 
Federal employment discrimination statute. The Federal Government is 
subject to its strictures. See 42 U.S.C.  2000e-17. The Supreme Court 
has held that the Title VII restrictions on affirmative action in the 
workplace are somewhat more lenient than the constitutional 
limitations. See Johnson v. Transportation Agency, 480 U.S. 616, 627-28 
n.6 (1987). But see id. at 649 (O'Connor, J., concurring in the 
judgment) (expressing view that Title VII standards for affirmative 
action should be ``no different'' from constitutional standards).
    \11\ We do not believe that Adarand calls into question Federal 
assistance to historically-Black colleges and universities.
    \12\ See, e.g., Peightal v. Metropolitan Dade County, 26 F.3d 1545, 
1557-58 (11th Cir. 1994); Billish v. City of Chicago, 962 F.2d 1269, 
1290 (7th Cir. 1992), vacated on other grounds, 989 F.2d 890 (7th Cir.) 
(en banc), cert. denied, 510 U.S. 908 (1993); Coral Constr. Co. v. King 
County, 941 F.2d 910, 923 (9th Cir. 1991), cert. denied, 502 U.S. 1033 
(1992).
    \13\ Outreach and recruitment efforts conceivably could be viewed 
as race-based decisionmaking of the type subject to Adarand if such 
efforts work to create a ``minorities-only'' pool of applicants or 
bidders, or if they are so focused on minorities that nonminorities are 
placed at a significant competitive disadvantage with respect to access 
to contracts, grants, or jobs.
---------------------------------------------------------------------------
    Adarand does not require strict scrutiny review for programs 
benefitting Native Americans as members of federally recognized Indian 
Tribes. In Morton v. Mancari, 417 U.S. 535 (1974), the Supreme Court 
applied rational basis review to a hiring preference in the Bureau of 
Indian Affairs for members of federally recognized Indian Tribes. The 
Court reasoned that a Tribal classification is ``political rather than 
racial in nature,'' because it is ``granted to Indians not as a 
discrete racial group, but, rather, as members of quasi-sovereign 
Tribal entities.'' Id. at 554. See id. at 553 n. 24.
    Adarand did not address the appropriate constitutional standard of 
review for affirmative action programs that use gender classifications 
as a basis for decisionmaking. Indeed, the Supreme Court has never 
resolved the matter.\14\ However, both before and after Croson, nearly 
all circuit court decisions have applied intermediate scrutiny to 
affirmative action measures that benefit women.\15\ The Sixth Circuit 
is the only court that has equated racial and gender classifications: 
purporting to rely on Croson, it held that gender-based affirmative 
action measures are subject to strict scrutiny.\16\ That holding has 
been criticized by other courts of appeals, which have correctly 
pointed out that Croson does not speak to the appropriate standard of 
review for such measures.\17\
---------------------------------------------------------------------------
    \14\ The lone gender-based affirmative action case that the Supreme 
Court has decided is Johnson v. Transportation Agency, 480 U.S. 616 
(1987). But Johnson only involved a Title VII challenge to the use of 
gender classifications--no constitutional claim was brought. Id. at 620 
n. 2. And as indicated above (see supra note 10), the Court in Johnson 
held that the Title VII parameters of affirmative action are not 
coextensive with those of the Constitution.
    \15\ See, e.g., Ensley Branch, NAACP v. Seibels, 31 F.3d 1548, 
1579-80 (11th Cir. 1994); Contractors Ass'n v. City of Philadelphia, 6 
F.3d 990, 1009-10 (3d Cir. 1993); Lamprecht v. FCC, 958 F.2d 382, 391 
(D.C. Cir. 1992) (Thomas, J.); Coral Constr. Co, v. King County, 941 
F.2d at 930-31; Associated Gen. Contractors v. City and County of San 
Francisco, 813 F.2d 922, 939 (9th Cir. 1987).
    \16\ See Conlin v. Blanchard, 890 F.2d 811, 816 (6th Cir. 1989); 
see also Brunet v. City of Columbus, 1 F.3d 390, 404 (6th Cir. 1993), 
cert. denied, 510 U.S. 1164 (1994).
    \17\ See, e.g., Seibels, 31 F.3d at 1580.

---------------------------------------------------------------------------
    D. Open Questions on Remand

    Adarand did not determine the constitutionality of any particular 
Federal affirmative action program. In fact, the Supreme Court did not 
determine the validity of the Federal legislation, regulations, or 
program at issue in Adarand itself. Instead, the Court remanded the 
case to the Tenth Circuit for a determination of whether the measures 
satisfy strict scrutiny.
    Adarand left open the possibility that, even under strict scrutiny, 
programs statutorily prescribed by Congress may be entitled to greater 
deference than programs adopted by state and local governments. This is 
a theme that some of the Justices had explored in prior cases. For 
example, in a portion of her Croson opinion joined by Chief Justice 
Rehnquist and Justice White, Justice O'Connor wrote that Congress may 
have more latitude than state and local governments in utilizing 
affirmative action. And in his concurrence in Fullilove, Justice 
Powell, applying strict scrutiny, upheld a congressionally mandated 
program, and in so doing, said that he was mindful that Congress 
possesses broad powers to remedy discrimination nationwide. In any 
event, in Adarand, the Court said that it did not have to resolve 
whether and to what extent courts should pay special deference to 
Congress in evaluating Federal affirmative action programs under strict 
scrutiny.
    Aside from articulating the components of the strict scrutiny 
standard, the Court's decision in Adarand provides little explanation 
of how the standard should be applied. For more guidance, one needs to 
look to Croson and lower court decisions applying it. That exercise is 
important because Adarand basically extends the Croson rules of 
affirmative action to the Federal level--with the caveat that 
application of those rules might be somewhat less stringent where 
affirmative action is undertaken pursuant to congressional mandate.
II. The Croson Standards
    In Croson, the Supreme Court considered a constitutional challenge 
to a Richmond, Virginia ordinance that required prime contractors who 
received city contracts to subcontract at least thirty percent of the 
dollar amount of those contracts to businesses owned and controlled by 
members of specified racial and ethnic minority groups--commonly known 
as minority business enterprises (``MBEs''). The asserted purpose of 
Richmond's ordinance was to remedy discrimination against minorities in 
the local construction industry.
    Croson marked the first time that a majority of the Supreme Court 
held that race-based affirmative action measures are subject to strict 
scrutiny.\18\ Justice O'Connor's opinion in Croson \19\ said that ``the 
purpose of strict scrutiny is to `smoke out' illegitimate uses of race 
by assuring that the legislative body is pursuing a goal important 
enough to warrant use of a highly suspect tool. The test also ensures 
that the means chosen `fit' this compelling goal so closely that there 
is little or no possibility that the motive for the classification was 
illegitimate racial prejudice or stereotype.'' 488 U.S. at 493 
(plurality opinion). See also id. at 520 (Scalia, J., concurring in the 
judgment) (``[S]trict scrutiny must be applied to all governmental 
classifications by race, whether or not its asserted purpose is 
`remedial' or `benign.' ''). In short, the compelling interest inquiry 
centers on ``ends'' and asks why the government is classifying 
individuals on the basis of race or ethnicity; the narrow tailoring 
inquiry focuses on ``means'' and asks how the government is seeking to 
meet the objective of the racial or ethnic classification.
---------------------------------------------------------------------------
    \18\ Croson was decided by a 6-3 vote. Five of the Justices in the 
majority (Chief Justice Rehnquist, and Justices White, O'Connor, 
Scalia, and Kennedy) concluded that strict scrutiny was the applicable 
standard of review. Justice Stevens concurred in part and concurred in 
the judgment, but consistent with his long-standing views, declined to 
``engag[e] in a debate over the proper standard of review to apply in 
affirmative-action litigation.'' 488 U.S. at 514 (Stevens, concurring 
in part and concurring in the judgment).
    \19\ Justice O'Connor's opinion was for a majority of the Court in 
some parts, and for a plurality in others.
---------------------------------------------------------------------------
    Applying strict scrutiny, the Court held that (a) the Richmond MBE 
program did not serve a ``compelling interest'' because it was 
predicated on insufficient evidence of discrimination in the local 
construction industry, and (b) it was not ``narrowly tailored'' to the 
achievement of the city's remedial objective.

    A. Compelling Governmental Interest

    1. Remedial Objectives

    Justice O'Connor's opinion in Croson stated that remedying the 
identified effects of past discrimination may constitute a compelling 
interest that can support the use by a governmental institution of a 
racial or ethnic classification. This discrimination could fall into 
two categories. First, the government can seek to remedy the effects of 
its own discrimination. Second, the government can seek to remedy the 
effects of discrimination committed by private actors within its 
jurisdiction, where the government becomes a ``passive participant'' in 
that conduct, and thus helps to perpetuate a system of exclusion. 488 
U.S. at 492 (plurality opinion); id. at 519 (Kennedy, J., concurring in 
part and concurring in the judgment). In either category, the remedy 
may be aimed at ongoing patterns and practices of exclusion, or at the 
lingering effects of prior discriminatory conduct that has ceased. See 
Adarand, 515 U.S. at 269 (Souter, J., dissenting) (``The Court has long 
accepted the view that constitutional authority to remedy past 
discrimination is not limited to the power to forbid its continuation, 
but extends to eliminating those effects that would otherwise persist 
and skew the operation of public systems even in the absence of current 
intent to practice any discrimination.'').
    Croson requires the government to identify with precision the 
discrimination to be remedied. The fact and legacy of general, 
historical societal discrimination is an insufficient predicate for 
affirmative action: ``While there is no doubt that the sorry history of 
both private and public discrimination in this country has contributed 
to a lack of opportunities for Black entrepreneurs, this observation, 
standing alone, cannot justify a rigid racial quota in the awarding of 
public contracts in Richmond, Virginia.'' 488 U.S. at 499. See id. at 
505 (``To accept Richmond's claim that past societal discrimination 
alone can serve as the basis for rigid racial preferences would be to 
open the door to competing claims for `remedial relief' for every 
disadvantaged group.''). Similarly, ``amorphous'' claims of 
discrimination in certain sectors and industries are inadequate. Id. at 
499 (``[A]n amorphous claim that there has been past discrimination in 
a particular industry cannot justify the use of an unyielding racial 
quota.''). Such claims ``provide[] no guidance for [the government] to 
determine the precise scope of the injury it seeks to remedy,'' and 
would have ``no logical stopping point.'' Id. at 498 (internal 
quotations omitted). The Court indicated that its requirement that the 
government identify with specificity the effects of past discrimination 
anchors remedial affirmative action measures in the present. It 
declared that ``[i]n the absence of particularized findings'' of 
discrimination, racial and ethnic classifications could be ``ageless in 
their reach into the past, and timeless in their ability to affect the 
future.'' Id. (internal quotations omitted).
    The Court in Croson did not require a judicial determination of 
discrimination in order for a state or local government to adopt 
remedial racial or ethnic classifications. Rather, relying on Justice 
Powell's plurality opinion in Wygant v. Jackson Bd. of Educ., 476 U.S. 
267 (1986), the Court said that the government must have a `` `strong 
basis in evidence for its conclusion that remedial action was 
necessary.' '' Croson, 488 U.S. at 500 (quoting Wygant, 476 U.S. at 
277). The Court then suggested that this evidence should approach ``a 
prima facie case of a constitutional or statutory violation'' of the 
rights of minorities. 488 U.S. at 500.\20\ Notably, the Court said that 
significant statistical disparities between the level of minority 
participation in a particular field and the percentage of qualified 
minorities in the applicable pool could permit an inference of 
discrimination that would support the use of racial and ethnic 
classifications intended to correct those disparities. Id. at 507. See 
id. at 501 (``There is no doubt that where gross statistical 
disparities can be shown, they alone in a proper case may constitute 
prima facie proof of a pattern or practice of discrimination.'') 
(internal quotations omitted). But the Court said that a mere 
underrepresentation of minorities in a particular sector or industry 
when compared to general population statistics is an insufficient 
predicate for affirmative action. Id. (``When special qualifications 
are required to fill particular jobs, comparisons to the general 
population (rather than to the smaller group of individuals who may 
possess the necessary qualifications) may have little probative 
value.'') (internal quotations omitted).
---------------------------------------------------------------------------
    \20\ Lower courts have consistently said that Croson requires 
remedial affirmative action measures to be supported by a ``strong 
basis in evidence'' that such action is warranted. See, e.g., Peightal, 
26 F.3d at 1553; Concrete Works v. City and County of Denver, 36 F.3d 
1513, 1521 (10th Cir. 1994), cert. denied, 514 U.S. 1004 (1995); 
Donaghy v. City of Omaha, 933 F.2d 1448, 1458 (8th Cir.), cert. denied, 
502 U.S. 1059 (1991). Some courts have said that this evidence should 
rise to the level of prima facie case of discrimination against 
minorities. See, e.g., O'Donnell Constr. Co. v. District of Columbia, 
963 F.2d 420, 424 (D.C. Cir. 1992); Stuart, 951 F.2d at 450; Cone Corp. 
v. Hillsborough County, 908 F.2d 908, 915 (11th Cir.), cert. denied, 
498 U.S. 983 (1990).
---------------------------------------------------------------------------
    Applying its ``strong basis in evidence'' test, the Court held that 
the statistics on which Richmond based its MBE program were not 
probative of discrimination in contracting by the city or local 
contractors, but at best reflected evidence of general societal 
discrimination. Richmond had relied on limited testimonial evidence of 
discrimination, supplemented by statistical evidence regarding: (i) the 
disparity between the number of prime contracts awarded by the city to 
minorities during the years 1978-1983 (less than one percent) and the 
city's minority population (fifty percent), and (ii) the extremely low 
number of MBEs that were members of local contractors' trade 
associations. The Court found that this evidence was insufficient. It 
said that more probative evidence would have compared, on the one hand, 
the number of qualified MBEs in the local labor market with, on the 
other hand, the number of city contracts awarded to MBEs and the number 
of MBEs in the local contractors' associations.
    In Adarand, Justice O'Connor's opinion noted that ``racial 
discrimination against minority groups in this country is an 
unfortunate reality,'' and as an example, it pointed to the 
``pervasive, systematic, and obstinate discriminatory conduct'' that 
underpinned the court-ordered affirmative action measures that were 
upheld in United States v. Paradise, 480 U.S. 149 (1987). Adarand, 515 
U.S. at 237 (internal quotations omitted).\21\ Her opinion did not say, 
however, that only overwhelming evidence of the sort at issue in 
Paradise can justify affirmative action. Again, Croson indicates that 
what is required is a ``strong basis in evidence'' to support the 
government's conclusion that race-based remedial action is warranted, 
and that such evidence need only approach a prima facie showing of 
discrimination against minorities. 488 U.S. at 500. The factual 
predicate in Paradise plainly exceeded a prima facie showing. Post-
Croson lower court decisions support the conclusion that the requisite 
factual predicate for race-based remedial action does not have to rise 
to the level of discrimination in Paradise.
---------------------------------------------------------------------------
    \21\ The measures at issue in Paradise were intended to remedy 
discrimination by the Alabama Department of Public Safety, which had 
not hired a Black trooper at any rank for four decades, 480 U.S. at 168 
(plurality opinion), and then when Blacks finally entered the 
department, had consistently refused to promote Blacks to the upper 
ranks. Id. at 169-71.
---------------------------------------------------------------------------
    The Court in Croson left open the question whether a government may 
introduce statistical evidence showing that the pool of qualified 
minorities would have been larger ``but for'' the discrimination that 
is to be remedied. Post-Croson lower court decisions have indicated 
that such evidence can be probative of discrimination.\22\
---------------------------------------------------------------------------
    \22\ See, e.g.. Contractors Ass'n, 6 F.3d at 1008; O'Donnell 
Constr. Co. v. District of Columbia, 963 F.2d 420, 427 (D.C. Cir. 
1992); cf. Associated Gen. Contractors v. Coalition for Econ. Equity, 
950 F.2d 1401, 1415 (9th Cir. 1991) (government had evidence that an 
``old boy network'' in the local construction industry had precluded 
minority businesses from breaking into the mainstream of ``qualified'' 
public contractors), cert. denied, 503 U.S. 985 (1992).
---------------------------------------------------------------------------
    Croson also did not discuss the weight to be given to anecdotal 
evidence of discrimination that a government gathers through complaints 
filed with it by minorities or through testimony in public hearings. 
Richmond had relied on such evidence as additional support for its MBE 
plan, but the Court discounted it. Post-Croson lower court cases, 
however, have said that anecdotal evidence can buttress statistical 
proof of discrimination.\23\
---------------------------------------------------------------------------
    \23\ See, e.g., Contractors Ass'n, 6 F.3d at 1002-03 (while 
anecdotal evidence of discrimination alone rarely will satisfy the 
Croson requirements, it can place important gloss on statistical 
evidence of discrimination); Coral Constr. Co., 941 F.2d at 919 
(``[t]he combination of convincing anecdotal and statistical evidence 
is potent;'' anecdotal evidence can bring ``cold numbers to life''); 
Cone Corp. 908 F.2d at 916 (testimonial evidence adduced by county in 
developing MBE program, combined with gross statistical disparities in 
minority participation in public contracting, provided ``more than 
enough evidence on the question of prior discrimination and need for 
racial classification'').
---------------------------------------------------------------------------
    In addition, Croson did not discuss which party has the ultimate 
burden of persuasion as to the constitutionality of an affirmative 
action program when it is challenged in court. Prior to Croson, the 
Supreme Court had spelled out the following evidentiary rule: while the 
entity defending a remedial affirmative action measure bears the 
initial burden of production to show that the measures are supported by 
``a strong basis in evidence,'' the ``ultimate burden'' of proof rests 
upon those challenging the measure to demonstrate that it is 
unconstitutional. Wygant, 476 U.S. at 277-78 (plurality opinion).\24\ 
Lower courts consistently have said that nothing in Croson disturbs 
this evidentiary rule.\25\
---------------------------------------------------------------------------
    \24\ See also Wygant, 476 U.S. at 293 (O'Connor, J., concurring in 
part and concurring in the judgment) (when the government ``introduces 
its statistical proof as evidence of its remedial purpose, thereby 
supplying the court with the means for determining that the 
[government] had a firm basis for concluding that remedial action was 
appropriate, it is incumbent upon the [challengers] to prove their 
case; they continue to bear the ultimate burden of persuading the court 
that the [government's] evidence did not support an inference of prior 
discrimination and thus a remedial purpose, or that the plan instituted 
on the basis of this evidence was not sufficiently `narrowly tailored' 
'').
    \25\ See, e.g., Concrete Works, 36 F.3d at 1521-22; Contractors 
Ass'n, 6 F.3d at 1005; Cone Corp., 908 F.2d at 916.
---------------------------------------------------------------------------
    Finally, and perhaps most significantly, Croson did not resolve 
whether a government must have sufficient evidence of discrimination at 
hand before it adopts a racial classification, or whether ``post-hoc'' 
evidence of discrimination may be used to justify the classification at 
a later date--for example, when it is challenged in litigation. The 
Court did say that governments must ``identify [past] discrimination 
with some specificity before they may use race-conscious relief.'' 488 
U.S. at 504. However, every court of appeals to consider the question 
has allowed governments to use ``post-enactment'' evidence to justify 
affirmative action--that is, evidence that the government did not 
consider when adopting a race-based remedial measure, but that 
nevertheless reflects evidence of discrimination providing support for 
the determination that remedial action was warranted at the time of 
adoption.\26\ Those courts have interpreted Croson as requiring that a 
government have some evidence of discrimination prior to embarking on 
remedial race-conscious action, but not that it marshal all such 
evidence at that time.\27\
---------------------------------------------------------------------------
    \26\ See Concrete Works, 36 F.3d at 1521; Contractors Ass'n, 6 F.3d 
at 1004), Coral Constr. Co., 941 F.2d at 920. As the Second Circuit put 
it when permitting a state government to rely on post-enactment 
evidence to defend a race-based contracting measure, ``[t]he law is 
plain that the constitutional sufficiency of . . . proffered reasons 
necessitating an affirmative action plan should be assessed on whatever 
evidence is presented, whether prior to or subsequent to the program's 
enactment.'' Harrison & Burrowes Bridge Constr. Inc. v. Cuomo, 981 F.2d 
50, 60 (2d Cir. 1992).
    \27\ See Concrete Works, 36 F.3d at 1521 (``Absent any preenactment 
evidence of discrimination, a municipality would be unable to satisfy 
Croson. However, we do not read Croson's evidentiary requirement as 
foreclosing the consideration of post-enactment evidence.''); Coral 
Constr. Co., 941 F.2d al 920 (requirement that municipality have ``some 
evidence'' of discrimination before engaging in race-conscious action 
``does not mean that a program will be automatically struck down if the 
evidence before the municipality at the time of enactment does not 
completely fulfill both prongs of the strict scrutiny test. Rather, the 
factual predicate for the program should be evaluated based upon all 
evidence presented to the district court, whether such evidence was 
adduced before or after enactment of the [program].''). One court has 
observed that the ``risk of insincerity associated with post-enactment 
evidence . . . is minimized'' where the evidence ``consists essentially 
of an evaluation and re-ordering of [the] pre-enactment evidence'' on 
which a government expressly relied in formulating its program. 
Contractors Ass'n, 6 F.3d at 1004. Application of the post-enactment 
evidence rule in that case essentially gave the government a period of 
transition in which to build an evidentiary foundation for an 
affirmative action program that was adopted before Croson, and thus 
without reference to the Croson requirements. In Coral Construction, 
the Ninth Circuit permitted the government to introduce post-enactment 
evidence to provide further factual support for a program that had been 
adopted after Croson, with the Croson standards in mind. See Coral 
Constr. Co., 941 F.2d at 914-15, 919-20.

---------------------------------------------------------------------------
    2. Nonremedial Objectives

    Because Richmond defended its MBE program on remedial grounds, the 
Court in Croson did not explicitly address if and when affirmative 
action may be adopted for ``nonremedial'' objectives, such as promoting 
racial diversity and inclusion. The same is true of the majority 
opinion in Adarand, since the program at issue in that case also is 
said to be remedial. In his Adarand dissent, Justice Stevens said that 
the majority's silence on the question does not foreclose the use of 
affirmative action to serve nonremedial ends. 515 U.S. at 258 (Stevens, 
J., dissenting). Thus, in the wake of Croson and Adarand, there are 
substantial questions as to whether and in what settings nonremedial 
objectives can constitute a compelling interest.\28\
---------------------------------------------------------------------------
    \28\ Given the nation's history of discrimination, virtually all 
affirmative action can be considered remedial in a broad sense. But as 
Croson makes plain, that history, on its own, cannot properly form the 
basis of a remedial affirmative action measure under strict scrutiny.
---------------------------------------------------------------------------
    To date, there has never been a majority opinion for the Supreme 
Court that addresses the question. The closest the Court has come in 
that regard is Justice Powell's separate opinion in Regents of the 
Univ. of Calif, v. Bakke, 438 U.S. 265 (1978), which said that a 
university has a compelling interest in taking the race of applicants 
into account in its admissions process in order to foster greater 
diversity among the student body.\29\ According to Justice Powell, this 
would bring a wider range of perspectives to the campus, and in turn, 
would contribute to a more robust exchange of ideas--which Justice 
Powell said was the central mission of higher education and in keeping 
with the time-honored First Amendment value in academic freedom. See 
id. at 311-14.\30\ Since Bakke, Justice Stevens has been the most 
forceful advocate on the Court for nonremedial affirmative action 
measures. He has consistently argued that affirmative action makes just 
as much sense when it promotes an interest in creating a more inclusive 
and diverse society for today and the future, as when it serves an 
interest in remedying past wrongs. See Adarand, 515 U.S. at 257 
(Stevens, J., dissenting); Croson, 488 U.S. at 511-12 & n. 1 (Stevens, 
J., concurring); Johnson, 480 U.S. at 646-47 (Stevens, J., concurring); 
Wygant, 476 U.S. at 313-15 (Stevens, J., dissenting). As a circuit 
judge in a case involving an ostensibly remedial affirmative action 
measure, Justice Ginsburg announced her agreement with Justice Stevens' 
position ``that remedy for past wrong is not the exclusive basis upon 
which racial classifications may be justified.'' O'Donnell Constr. Co., 
963 F.2d at 429 (Ginsburg, J., concurring) (citing Justice Stevens' 
concurrence in Croson, 488 U.S. at 511).
---------------------------------------------------------------------------
    \29\ Although Justice Powell wrote for himself in Bakke, his 
opinion was the controlling one in the case.
    \30\ Although it apparently has not been tested to any significant 
degree in the courts. Justice Powell's thesis may carry over to the 
selection of university faculty: the greater the racial and ethnic 
diversity of the professors, the greater the array of perspectives to 
which the students would be exposed.
---------------------------------------------------------------------------
    In Metro Broadcasting, the majority relied on Bakke and Justice 
Stevens' vision of affirmative action to uphold FCC affirmative action 
programs in the licensing of broadcasters on nonremedial grounds; the 
Court said that diversification of ownership of broadcast licenses was 
a permissible objective of affirmative action because it serves the 
larger goal of exposing the nation to a greater diversity of 
perspectives over the nation's radio and television airwaves. 497 U.S. 
at 567-68. The Court reached that conclusion under intermediate 
scrutiny, however, and thus did not hold that the governmental interest 
in seeking diversity in broadcasting is ``compelling.'' Adarand did not 
overrule the result in Metro Broadcasting--a point not lost on Justice 
Stevens. See Adarand, 515 U.S. at 258 (Stevens, J., dissenting) (``The 
majority today overrules Metro Broad., only insofar as it'' is 
inconsistent with the holding that Federal affirmative action measures 
are subject to strict scrutiny. ``The proposition that fostering 
diversity may provide a sufficient interest to justify [a racial or 
ethnic classification] is not inconsistent with the Court's holding 
today--indeed, the question is not remotely presented in this case . . 
. .'').
    On the other hand, portions of Justice O'Connor's opinion in Croson 
and her dissenting opinion in Metro Broadcasting appear to cast doubt 
on the validity of nonremedial affirmative action programs. In one 
passage in her opinion in Croson, Justice O'Connor stated that 
affirmative action must be ``strictly reserved for the remedial 
setting.'' 488 U.S. at 493 (plurality opinion). Echoing that theme in 
her dissenting opinion (joined by Chief Justice Rehnquist and Justices 
Kennedy and Scalia) in Metro Broadcasting, Justice O'Connor urged the 
adoption of strict scrutiny for Federal affirmative action measures, 
and asserted that under that standard, only one interest has been 
``recognized'' as compelling enough to justify racial classifications: 
``remedying the effects of racial discrimination.'' 497 U.S. at 612. 
Justice Kennedy's separate dissent in Metro Broadcasting was also quite 
dismissive of non-remedial justifications for affirmative action; he 
criticized the majority opinion for ``allow[ing] the use of racial 
classifications by Congress untied to any goal of addressing the 
effects of past race discrimination''). Id. at 632 (Kennedy, J., 
dissenting).
    Nowhere in her Croson and Metro Broadcasting opinions did Justice 
O'Connor expressly disavow Justice Powell's opinion in Bakke. 
Accordingly, lower courts have assumed that Justice O'Connor did not 
intend to discard Bakke.\31\ That proposition is supported by Justice 
O'Connor's own concurring opinion in Wygant, in which she expressed 
approval of Justice Powell's view that fostering racial and ethnic 
diversity in higher education is a compelling interest. 476 U.S. at 
286. Furthermore, in Wygant, Justice O'Connor said that there might be 
governmental interests other than remedying discrimination and 
promoting diversity in higher education that might be sufficiently 
compelling to support affirmative action. Id. For example, Justice 
O'Connor left open the possibility that promoting racial diversity 
among the faculty at primary and secondary schools could count as a 
compelling interest. Id. at 288 n*. In his Wygant dissent, Justice 
Stevens argued that this is a permissible basis for affirmative action. 
Id. at 313-15 (Stevens, J., dissenting).
---------------------------------------------------------------------------
    \31\ See Winter Park Communications, Inc. v. FCC, 873 F.2d 347, 
353-54 (D.C. Cir. 1989), aff'd sub. nom. Metro Broad., Inc. v. FCC, 497 
U.S. 547 (1990); Winter Park, 873 F.2d at 357 (Williams, J., concurring 
in part and dissenting in part); Shurberg Broad., Inc. v. FCC, 876 F.2d 
902, 942 (D.C. Cir. 1989) (Wald, C.J., dissenting), aff'd sub. nom. 
Metro Broad., Inc. v. FCC, 497 U.S. 547 (1990). In Davis v. Halpern, 
768 F. Supp. 968 (S.D.N.Y. 1991), the court reviewed the law of 
affirmative action in the wake of Croson and Metro Broadcasting, and, 
citing Justice Powell's opinion in Bakke, said that a university has a 
compelling interest in seeking to increase the diversity of its student 
body. Id. at 981. See also United States v. Board of Educ. Township of 
Piscataway, 832 F. Supp. 836, 847-48 (D.N.J. 1993) (under 
constitutional standards for affirmative action, diversity in higher 
education is a compelling governmental interest) (citing Bakke and 
Croson).
---------------------------------------------------------------------------
    On the assumption that Bakke remains the law, it is clear that to 
the extent affirmative action is used to foster racial and ethnic 
diversity, the government must seek some further objective, beyond the 
mere achievement of diversity itself.\32\ As Bakke teaches, in higher 
education, that asserted goal is the enrichment of the academic 
experience. And according to the majority in Metro Broadcasting, the 
asserted independent goal that justifies diversifying the owners of 
broadcast licenses is adding variety to the perspectives that are 
communicated in radio and television. That same kind of analysis must 
be applied to efforts to promote racial and ethnic diversity in other 
settings.
---------------------------------------------------------------------------
    \32\ The Court has consistently rejected ``racial balancing'' as a 
goal of affirmative action. See Croson, 488 U.S. at 507; Johnson, 480 
U.S. at 639; Local 28 Sheet Metal Workers' Int'l Ass'n v. EEOC, 478 
U.S. 421, 475 (1986) (plurality opinion); Bakke, 438 U.S. at 307 
(opinion of Powell, J.).
---------------------------------------------------------------------------
    For instance, diversification of the ranks in a law enforcement 
agency arguably serves vital public safety and operational needs, and 
thus enhances the agency's ability to carry out its functions 
effectively. See Wygant, 476 U.S. at 314 (Stevens, J., dissenting) 
(``[I]n law enforcement . . . in a city with a recent history of racial 
unrest, the superintendent of police might reasonably conclude that an 
integrated police force could develop a better relationship with the 
community and thereby do a more effective job of maintaining law and 
order than a force composed only of whites.''); Paradise, 480 U.S. at 
167 n. 18 (plurality opinion) (noting argument that race-conscious 
hiring can ``restore[] community trust in the fairness of law 
enforcement and facilitate[] effective police service by encouraging 
citizen cooperation'').\33\ It is more difficult to identify any 
independent goal that may be attained by diversifying the racial mix of 
public contractors. Justice Stevens concurred in the judgment in Croson 
on precisely that ground. Citing his own Wygant dissent, Justice 
Stevens contrasted the ``educational benefits to the entire student 
body'' that he said could be achieved through faculty diversity with 
the minimal societal benefits (other than remedying past 
discrimination, a predicate that he said was not supported by the 
evidence in Croson) that would flow from a diversification of the 
contractors with whom a municipality does business. See Croson, 488 
U.S. at 512-13 (Stevens, J., concurring in part and concurring in the 
judgment). Furthermore, the Court has stated that the desire to develop 
a growing class of successful minority entrepreneurs to serve as ``role 
models'' in the minority community is not, on its own, a valid basis 
for a racial or ethnic classification. See Croson, 488 U.S. at 497 
(citing Wygant, 476 U.S. at 276 (plurality opinion)); see also Wygant, 
476 U.S. at 288 n* (O'Connor, J., concurring).
---------------------------------------------------------------------------
    \33\ See also Detroit Police Officers' Ass'n v. Young, 608 F.2d 
671, 696 (6th Cir. 1979), cert. denied, 452 U.S. 938 (1981) (``The 
argument that police need more minority officers is not simply that 
Blacks communicate better with Blacks or that a police department 
should cater to the public's desires. Rather, it is that effective 
crime prevention and solution depend heavily on the public support and 
cooperation which result only from public respect and confidence in the 
police.'').
---------------------------------------------------------------------------
    Diversification of the health services profession was one of the 
stated predicates of the racial and ethnic classifications in the 
medical school admissions program at issue in Bakke. The asserted 
independent goal was ``improving the delivery of health-care services 
to communities currently underserved.'' Bakke, 438 U.S. at 310. Justice 
Powell said that ``[i]t may be assumed that in some situations a 
State's interest in facilitating the health care of its citizens is 
sufficiently compelling to support the use of a suspect 
classification.'' Id. The problem in Bakke, however, was that there was 
``virtually no evidence'' that the preference for minority applicants 
was ``either needed or geared to promote that goal.'' Id.\34\
---------------------------------------------------------------------------
    \34\ Aside from (he proffered justification in Bakke, the 
government may have other reasons for seeking to increase the number of 
minority health professionals.
---------------------------------------------------------------------------
    Assuming that some nonremedial objectives remain a legitimate basis 
for affirmative action after Adarand, there is a question of the nature 
of the showing that may be necessary to support racial and ethnic 
classifications that are premised on such objectives. In higher 
education, the link between the diversity of the student body and the 
diversity of viewpoints on the campus does not readily lend itself to 
empirical proof. Justice Powell did not require any such evidence in 
Bakke. He said that the strong First Amendment protection of academic 
freedom that allows ``a university to make its own judgments as to 
education includes the selection of its student body.'' Bakke, 438 U.S. 
at 312. A university is thus due some discretion to conclude that a 
student ``with a particular background--whether it be ethnic, 
geographic, culturally advantaged or disadvantaged--may bring to a 
professional school of medicine experiences, outlooks, and ideas that 
enrich the training of its student body and better equip its graduates 
to render with understanding their vital service to humanity.'' Id. at 
314.
    It could be said that this thesis is rooted in a racial stereotype, 
one that presumes that members of racial and ethnic minority groups 
have a ``minority perspective'' to convey. As Justice O'Connor stated 
in Croson, a driving force behind strict scrutiny is to ensure that 
racial and ethnic classifications are not motivated by ``stereotype.'' 
Croson, 488 U.S. at 493 (plurality opinion). There are sound arguments 
to support the contention that seeking diversity in higher education 
rests on valid assumptions. The thesis does not presume that all 
individuals of a particular race or ethnic background think and act 
alike. Rather, it is premised on what seems to be a common sense 
proposition that in the aggregate, increasing the diversity of the 
student body is bound to make a difference in the array of perspectives 
communicated at a university. See Metro Broad., 497 U.S. at 579 (``The 
predictive judgment about the overall result of minority entry into 
broadcasting is not a rigid assumption about how minority owners will 
behave in every case but rather is akin to Justice Powell's conclusion 
in Bakke that greater admission of minorities would contribute, on 
average, to the robust exchange of ideas.'') (internal quotations 
omitted). Nonetheless, after Croson and Adarand, a court might demand 
some proof of a nexus between the diversification of the student body 
and the diversity of viewpoints expressed on the campus.\35\ Likewise, 
a court may demand a factual predicate to support the proposition that 
greater diversity in a law enforcement agency will serve the 
operational needs of the agency and improve its performance,\36\ or 
that minority health care professionals are more likely to work in 
medically underserved communities.\37\
---------------------------------------------------------------------------
    \35\ Justice Powell cited literature on this subject in support of 
his opinion in Bakke. See 438 U.S. at 312-13 n. 48, 315 n.50.
    \36\ See Hayes v. North State Law Enforcement Officers Ass'n, 10 
F.3d 207, 215 (4th Cir. 1993) (although the use of racial 
classifications to foster diversity of police department could be a 
constitutionally permissible objective, city failed to show a link 
between effective law enforcement and greater diversity in the 
department's ranks).
    \37\ See Bakke, 438 U.S. at 311 (opinion of Powell, J.) (noting 
lack of empirical data to support medical school's claim that minority 
doctors will be more likely to practice in a disadvantaged community).

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    B. Narrow Tailoring Test

    In addition to advancing a compelling goal, any governmental use of 
race must also be ``narrowly tailored.'' There appear to be two 
underlying purposes of the narrow tailoring test: first, to ensure that 
race-based affirmative action is the product of careful deliberation, 
not hasty decisionmaking; and, second, to ensure that such action is 
truly necessary, and that less intrusive, efficacious means to the end 
are unavailable. As it has been applied by the courts, the factors that 
typically make up the ``narrow tailoring'' test are as follows: (i) 
whether the government considered race-neutral alternatives before 
resorting to race-conscious action; (ii) the scope of the affirmative 
action program, and whether there is a waiver mechanism that 
facilitates the narrowing of the program's scope; (iii) the manner in 
which is used, that is, whether race is a factor in determining 
eligibility for a program or whether race is just one factor in the 
decisionmaking process; (iv) the comparison of any numerical target to 
the number of qualified minorities in the relevant sector or industry; 
(v) the duration of the program and whether it is subject to periodic 
review; and (vi) the degree and type of burden caused by the program. 
In Adarand, the Supreme Court referred to its previous affirmative 
action decisions for guidance on what the narrow tailoring test 
entails. It specifically mentioned that when the Tenth Circuit reviewed 
the DOT program at issue in Adarand under intermediate scrutiny, it had 
not addressed race-neutral alternatives or the duration of the program.
    Before describing each of the components, three general points 
about the narrow tailoring test deserve mention. First, it is probably 
not the case that an affirmative action measure has to satisfy every 
factor. A strong showing with respect to most of the factors may 
compensate for a weaker showing with respect to others.
    Second, all of the factors are not relevant in every case. For 
example, the objective of the program may determine the applicability 
or weight to be given a factor. The factors may play out differently 
where a program is nonremedial.
    Third, the narrow tailoring test should not necessarily be viewed 
in isolation from the compelling interest test. To be sure, the 
inquiries are distinct: as indicated above, the compelling interest 
inquiry focuses on the ends of an affirmative action measure, whereas 
the narrow tailoring inquiry focuses on the means. However, as a 
practical matter, there may be an interplay between the two. There is 
some hint of this in Croson. In several places, the Court said that the 
weak predicate of discrimination on which Richmond acted could not 
justify the adoption of a rigid racial quota--which suggests that if 
Richmond had opted for some more flexible measure the Court might have 
been less demanding when reviewing the evidence of discrimination. By 
the same token, the more compelling the interest, perhaps less narrow 
tailoring is required. For example, in Sheet Metal Workers, and 
Paradise, the Supreme Court upheld what on their face appear to be 
rather rigid classifications to remedy egregious and persistent 
discrimination.
    However, it bears emphasizing that the Supreme Court has never 
explicitly recognized any trade-off between the compelling interest and 
narrow tailoring tests. It is also far from clear that the Court in 
Croson would have found that a more flexible MBE program, supported by 
the generalized evidence of discrimination on which Richmond relied, 
could withstand strict scrutiny. In addition, the membership of the 
Court has changed dramatically in the years since Sheet Metal Workers 
and Paradise. Both cases were decided by 5-4 margins, and only one 
member of the majority (Justice Stevens) remains. And while Justice 
O'Connor agreed with the majority in Sheet Metal Workers and Paradise 
that ample evidence of deeply entrenched discrimination gave rise to a 
very weighty interest in race-based action, she dissented on the ground 
that the particular remedies selected were too rigid.

    1. Race-Neutral Alternatives

    In Croson, the Supreme Court said that the Richmond MBE program was 
not ``narrowly tailored,'' in part because the city apparently had not 
considered race-neutral means to increase minority participation in 
contracting before adopting its race-based measure. The Court reasoned 
that because minority businesses tend to be smaller and less-
established, providing race-neutral financial and technical assistance 
to small and/or new firms and relaxing bonding requirements might 
achieve the desired remedial results in public contracting--increasing 
opportunities for minority businesses. 488 U.S. at 507, 510. Justice 
Scalia suggested an even more aggressive idea: ``adopt a preference for 
small businesses, or even for new businesses--which would make it 
easier for those previously excluded by discrimination to enter the 
field. Such programs may well have a racially disproportionate impact, 
but they are not based on race.'' Id. at 526 (Scalia, J., concurring). 
As such, they would not be subjected to strict scrutiny.
    The Court in Croson did not specify the extent to which governments 
must consider race-neutral measures before resorting to race-conscious 
action. It would seem that the government need not first exhaust race-
neutral alternatives, but only give them serious attention.\38\ This 
principle would comport with the purposes of ensuring that race-based 
remedies are used only when, after careful consideration, a government 
has concluded that less intrusive means would not work. It also 
comports with Justice Powell's view that in the remedial setting, the 
government need not use the ``least restrictive means'' where they 
would not accomplish the desired ends as well. See Fullilove, 448 U.S. 
at 508 (Powell, J., concurring); see also Wygant, 476 U.S. at 280 n. 6 
(plurality opinion of Justice Powell) (narrow tailoring requirement 
ensures that ``less restrictive means'' are used when they would 
promote the objectives of a racial classification ``about as well'') 
(internal quotations omitted).\39\
---------------------------------------------------------------------------
    \38\ See Coral Constr. Co., 941 F.2d at 923 (``[W]hile strict 
scrutiny requires serious, good faith consideration of race-neutral 
alternatives, strict scrutiny does not require exhaustion of every such 
possible alternative.'').
    \39\ Cf. Billish, 989 F.2d at 894 (7th Cir.) (en banc) (Posner, J.) 
(in reviewing affirmative action measures, courts must be ``sensitiv[e] 
to the importance of avoiding racial criteria . . . whenever it is 
possible to do so, [as] Croson requires''), cert. denied, 510 U.S. 908 
(1993).
---------------------------------------------------------------------------
    This approach gives the government a measure of discretion in 
determining whether its objectives could be accomplished through some 
other avenue. In addition, under this approach, the government may not 
be obliged to consider race-neutral alternatives every time that it 
adopts a race-conscious measure in a particular field. In some 
situations, the government may be permitted to draw upon a previous 
consideration of race-neutral alternatives that it undertook prior to 
adopting some earlier race-based measure.\40\ In the absence of prior 
experience, however, a government should consider race-neutral 
alternatives at the time it adopts a racial or ethnic classification. 
More fundamentally, even where race-neutral alternatives were 
considered, a court might second-guess the government if the court 
believes that an effective race-neutral alternative is readily 
available and hence should have been tried. See Metro Broadcasting, 497 
U.S. at 625 (O'Connor, J., dissenting) (FCC affirmative action programs 
are not narrowly tailored, in part, because ``the FCC has never 
determined that it has any need to resort to racial classifications to 
achieve its asserted interest, and it has employed race-conscious means 
before adopting readily available race-neutral, alternative means''); 
Paradise, 480 U.S. at 199-200 (O'Connor, J., dissenting) (district 
court's race-based remedial order was not narrowly tailored because the 
court ``had available several alternatives'' that would have achieved 
the objectives in a less intrusive manner).\41\
---------------------------------------------------------------------------
    \40\ See Contractors Ass'n, 6 F.3d at 1009 n. 18.
    \41\ See also Seibels, 31 F.3d at 1571 (city should have 
implemented race-neutral alternative of establishing nondiscriminatory 
selection procedures in police and fire departments instead of adopting 
race-based procedures; ``continued use of discriminatory tests . . . 
compounded the very evil that [race-based measures] were designed to 
eliminate''); Aiken v. City of Memphis, 37 F.3d 1155, 1164 (6th Cir. 
1994) (remanding to lower court, in part, because evidence suggested 
that the city should have used obvious set of race-neutral alternatives 
before resorting to race-conscious measures).

---------------------------------------------------------------------------
    2. Scope of Program/Administrative Waivers

    Justice O'Connor's opinion for the Court in Croson criticized the 
scope of Richmond's thirty percent minority subcontracting requirement, 
calling it a ``rigid numerical quota'' that did not permit 
consideration, through some form of administrative waiver mechanism, of 
whether particular individuals benefiting from the ordinance had 
suffered from the effects of the discrimination that the city was 
seeking to remedy. 488 U.S. at 508. At first blush, this criticism of 
the Richmond plan may appear to conflict with previous Court decisions, 
joined by Justice O'Connor, that held that race-based remedial measures 
need not be limited to persons who were the victims of discrimination. 
(See supra pp. 174-75.) Upon closer reading, however, Croson should not 
be interpreted as introducing a ``victims-only'' requirement through 
the narrow tailoring test.\42\ The Court's rejection in Adarand of 
Justice Scalia's position that compensation is due only to individuals 
who have been discriminated against personally provides further 
confirmation that Croson did not impose any such requirement.
---------------------------------------------------------------------------
    \42\ Most lower courts have not construed Croson in that fashion. 
See, e.g., Billish, 962 F.2d at 1292-94, rev'd on other grounds, 989 
F.2d 890 (7th Cir.) (en banc), cert. denied, 510 U.S. 908 (1993); Coral 
Constr. Co., 941 F.2d at 925-26 n. 15; Cunico v. Pueblo Sch. Dist. No. 
60, 917 F.2d 431, 437 (10th Cir. 1990). But see Winter Park 
Communications. Inc., 873 F.2d at 367-68 (Williams, J., concurring in 
part and dissenting in part) (interpreting Croson as requiring that 
racial classifications be limited ``to victims of prior 
discrimination''); Main Line Paving Co. v. Board of Educ., 725 F. Supp. 
1349, 1362 (E.D. Pa. 1989) (MBE program not narrowly tailored, in part, 
because it ``containe[d] no provision to identify those who were 
victims of past discrimination and to limit the program's benefits to 
them'').
---------------------------------------------------------------------------
    The Court's focus in Croson on individualized consideration of 
persons seeking the benefit of a racial classification appears to have 
been animated by three separate concerns about the scope of the 
Richmond plan. First, the Court indicated that in order for a remedial 
affirmative action program to be narrowly tailored, its beneficiaries 
must be members of groups that were the victims of discrimination. The 
Court faulted the Richmond plan because it was intended to remedy 
discrimination against African-American contractors, but included among 
its beneficiaries Hispanics, Asian-Americans, Native-Americans, 
Eskimos, and Aleuts--groups for which Richmond had proffered 
``absolutely no evidence of past discrimination.'' Id. at 506. 
Therefore, the Court said, even if the Richmond MBE program was `` 
`narrowly tailored' to compensate African-American contractors for past 
discrimination, one may legitimately ask why they are forced to share 
this `remedial relief' with an Aleut citizen who moves to Richmond 
tomorrow?'' Id.\43\ Second, the Court said that the Richmond plan was 
not even narrowly tailored to remedy discrimination against Black 
contractors because ``a successful Black entrepreneur . . . from 
anywhere in the country'' could reap its benefits. Id. at 508. That is, 
the geographic scope of the plan was not sufficiently tailored.\44\ 
Third, the Court contrasted the ``rigidity'' of the Richmond plan with 
the flexible waiver mechanism in the ten percent minority participation 
requirement that was upheld in Fullilove. As the Court in Croson 
described it, the requirement in Fullilove could be waived where a 
minority business charged a ``higher price [that] was not attributable 
to the effects of past discrimination.'' Id. See Fullilove, 448 U.S. at 
488 (plurality opinion). The theory is that where a business is 
struggling to overcome discrimination, it may not have the capacity to 
submit a competitive bid. That an effective waiver provision allows for 
``individualized consideration'' of a particular minority contractor's 
bid does not mean that the contractor has to be a ``victim'' of a 
specific instance of discrimination. It does mean that if the 
contractor is wealthy and has entered the mainstream of contractors in 
the community, a high bid might not be traceable to the discrimination 
that a racial or ethnic classification is seeking to redress. Instead, 
such a bid might reflect an effort to exploit the classification.\45\
---------------------------------------------------------------------------
    \43\ See O'Donnell Constr. Co., 963 F.2d at 427 (MBE program was 
not narrowly tailored because of ``random inclusion of racial groups 
for which there was no evidence of past discrimination'').
    \44\ Compare Coalition for Econ. Equity, 950 F.2d at 1418 (MBE 
program intended to remedy discrimination against minorities in county 
construction industry was narrowly tailored, in part, because scope of 
beneficiaries was limited to minorities within the county) with 
Podberesky v. Kirwan, 38 F.3d 147, 159 (4th Cir.) (scholarship program 
intended to remedy discrimination against African-Americans in Maryland 
was not narrowly tailored, in part, because African-Americans from 
outside Maryland were eligible for the program), cert. denied, 514 U.S. 
1128 (1995).
    \45\ See Milwaukee County Pavers Ass'n v. Fiedler, 922 F.2d 419, 
425 (7th Cir.) (noting that administrative waiver mechanism enabled 
state to exclude from scope of beneficiaries of affirmative action plan 
in public contracting ``two wealthy Black football players'' who 
apparently could compete effectively outside the plan), cert. denied, 
500 U.S. 954 (1991); Concrete Gen. Inc. v. Washington Suburban Sanitary 
Comm'n, 779 F. Supp. 370, 381 (D. Md. 1991) (MBE program not narrowly 
tailored, in part, because it had ``no provision to `graduate' from the 
program those contracting firms which have demonstrated the ability to 
effectively compete with non-MBE's in a competitive bidding process''); 
see also Shurberg Broad., Inc. v. FCC, 876 F.2d at 916 (opinion of 
Silberman, J.) (``There must be some opportunity to exclude those 
individuals for whom affirmative action is just another business 
opportunity.'').

---------------------------------------------------------------------------
    3. Manner in Which Race is Used

    The Court's attack on the ``rigidity'' of the Richmond ordinance 
also implicates another common refrain in affirmative action 
jurisprudence: the manner in which race is used is an integral part of 
the narrow tailoring requirement. The clearest statement of the Court's 
somewhat mixed messages in this area is that programs that make race or 
ethnicity a requirement of eligibility for particular positions or 
benefits are less likely to survive constitutional challenge than 
programs that merely use race or ethnicity as one factor to be 
considered under a program open to all races and ethnic groups.\46\
---------------------------------------------------------------------------
    \46\ The factor that we labeled above as ``scope of beneficiaries/
administrative waivers'' is sometimes considered by courts under the 
heading of ``flexibility,'' along with a consideration of the manner in 
which race is used. For the sake of clarity we have divided them into 
two separate components of the narrow tailoring test.
---------------------------------------------------------------------------
    Two types of racial classifications are subject to criticism as 
being too rigid. First and most obvious is an affirmative action 
program in which a specific number of positions are set aside for 
minorities. The prime example is the medical school admissions program 
that the Court invalidated in Bakke. Justice Powell's pivotal opinion 
in the case turned squarely on the fact that the program reserved 
sixteen percent of the slots at the medical school for members of 
racial and ethnic minority groups. Another example of this type of 
classification is the program upheld in Fullilove. It provides that, 
except where the Secretary of Commerce determines otherwise, at least 
ten percent of the amount of Federal grants for certain public works 
projects must be expended by grantees to purchase goods or services 
from minority-owned businesses. 42 U.S.C.  6705(f)(2).
    The second type of classification that is vulnerable to attack on 
flexibility grounds is a program in which race or ethnicity is the sole 
or primary factor in determining eligibility. One example is the FCC's 
``distress sale'' program, which allows a broadcaster whose 
qualifications have been called into question to transfer his or her 
license prior to an FCC revocation hearing, provided the transferee is 
a minority-owned business.\47\ Another example of affirmative action 
programs in which race or ethnicity is a requirement of eligibility are 
college scholarships that are reserved for minorities.\48\
---------------------------------------------------------------------------
    \47\ The distress sale program was upheld under intermediate 
scrutiny in Metro Broadcasting.
    \48\ There is a plausible distinction between college scholarships 
that are reserved for minorities and admissions quotas that reserve 
places at a college for minorities. In Podberesky v. Kirwan, 38 F.3d 
147 (4th Cir 1994). cert. denied, 514 U.S. 1128 (1995), the Fourth 
Circuit held that a college scholarship program for African Americans 
was unconstitutional under Croson. The Fourth Circuit's decision, 
however, did not equate the scholarship program with the admissions 
quota struck down in Bakke, and it did not turn on the fact that race 
was a requirement of eligibility for the program.
---------------------------------------------------------------------------
    Under both types of classifications, persons not within the 
designated categories are rendered ineligible for certain benefits or 
positions.\49\ Justice Powell's opinion in Bakke rested on the fact 
that the admissions program at issue was a quota that saved places for 
minorities solely on the basis of their race.\50\ As Justice Powell put 
it, such a program
---------------------------------------------------------------------------
    \49\ The statutes and regulations under which DOT has established 
the contracting program at issue in Adarand are different. Racial and 
ethnic classifications are used in the form of a presumption that 
members of minority groups are ``socially disadvantaged.'' However, 
that presumption is rebuttable, and members of nonminority groups are 
eligible for the program ``on the basis of clear and convincing 
evidence'' that they are socially disadvantaged. Adarand, 515 U.S. at 
207. See id. at 259-61 (Stevens, J., dissenting) (arguing that the 
relevant statutes and regulations in Adarand are better tailored than 
the Fullilove legislation, because they ``do[] not make race the sole 
criterion of eligibility for participation in the program.'' Members of 
racial and ethnic are presumed to be disadvantaged, but the presumption 
is rebuttable, and even if it does not get the presumption, ``a small 
business may qualify [for the program] by showing that it is both 
socially and economically disadvantaged'').
    \50\ Bakke is the only Supreme Court affirmative action case that 
ultimately turned on the ``quota'' issue. In Croson, the Court referred 
disparagingly to the thirty percent minority subcontracting requirement 
at issue in the case as a ``quota,'' but that was not in itself the 
basis for the Court's decision.

          tells applicants who are not Negro, Asian, or Chicano that 
        they are totally excluded from a specific percentage of the 
        seats in an entering class. No matter how strong their 
        qualifications, quantitative and extracurricular, including 
        their own potential for contribution to educational diversity, 
        they are never afforded the chance to compete with applicants 
---------------------------------------------------------------------------
        from the preferred groups for the special admissions seats.

438 U.S. at 319. Justice Powell contrasted admissions programs that 
require decisions based ``solely'' on race and ethnicity, id. at 315, 
with programs in which race or ethnic background is simply one factor 
among many in the admissions decision. Justice Powell said that in the 
latter type of program, ``race or ethnic background may be deemed a 
`plus' in a particular applicant's file, yet it does not insulate the 
individual from comparison with all other candidates for the available 
seats.'' Id. at 317. In Justice Powell's view, such programs are 
sufficiently flexible to meet the narrow tailoring requirement.
    This line of reasoning also resonates in Johnson v. Transportation 
Agency, 480 U.S. 616 (1987). There, the Supreme Court upheld an 
affirmative action plan under which a state government agency 
considered the gender of applicants \51\ as one factor in making 
certain promotion decisions. The Court noted that the plan ``set[] 
aside no positions for women,'' but simply established goals for female 
representation that were not ``construed'' by the agency as ``quotas.'' 
Id. at 638. The Court further observed that the plan ``merely 
authorize[d] that consideration be given to affirmative action concerns 
when evaluating qualified applicants.'' Id. The Court stressed that in 
the promotion decision in question, ``sex . . . was but one of numerous 
factors [that were taken] into account.'' Id. The agency's plan ``thus 
resemble[d]'' the type of admissions program ``approvingly noted by 
Justice Powell'' in Bakke: it ``requires women to compete with all 
other qualified applicants. No persons are automatically excluded from 
consideration; all are able to have their qualifications weighed 
against those of other applicants.'' Id. See also id. at 656-57 
(O'Connor, J., concurring in judgment) (agency's promotion decision was 
not made ``solely on the basis of sex;'' rather, ``sex was simply used 
as a `plus factor' '').
---------------------------------------------------------------------------
    \51\ Although Johnson was a Title VII gender classification case, 
its reasoning as to the distinction between quotas and goals is 
instructive with respect to the constitutional analysis of racial and 
ethnic classifications.
---------------------------------------------------------------------------
    Finally, Croson itself touches on the point. The Court said that in 
the absence of a waiver mechanism that permitted individualized 
consideration of persons seeking a share of city contracts pursuant to 
the requirement that thirty percent of the dollar value of prime 
contracts go to minority subcontractors, the Richmond plan was 
``problematic from an equal protection standpoint because [it made] the 
color of an applicant's skin the sole relevant consideration.'' 488 
U.S. at 508.

    4. Comparison of Numerical Target to Relevant Market

    Where an affirmative action program is justified on remedial 
grounds, the Court has looked at the size of any numerical goal and its 
comparison to the relevant labor market or industry. This factor 
involves choosing the appropriate measure of comparison. In Croson, 
Richmond defended its thirty percent minority subcontracting 
requirement on the premise that it was halfway between .067 percent--
the percentage of city contracts awarded to African-Americans during 
the years 1978-1983--and fifty percent--the African-American population 
of Richmond. The Court in Croson demanded a more meaningful statistical 
comparison and much greater mathematical precision. It held that 
numerical figures used in a racial preference must bear a relationship 
to the pool of qualified minorities. Thus, in the Court's view, the 
thirty percent minority subcontracting requirement was not narrowly 
tailored, because it was tied to the African-American population of 
Richmond, and as such, rested on the assumption that minorities will 
choose a particular trade ``in lockstep proportion to their 
representation in the local population.'' 488 U.S. at 507.\52\
---------------------------------------------------------------------------
    \52\ Compare Aiken, 37 F.3d at 1165 (remanding to lower court, in 
part, because race-based promotion goals in consent decree were tied to 
``undifferentiated'' labor force statistics; instructing district court 
on remand to determine whether racial composition of city labor force 
``differs materially from that of the qualified labor pool for the 
positions'' in question) with Edwards v. City of Houston, 37 F.3d 1097, 
1114 (5th Cir. 1994) (race-based promotion goals in city police 
department were narrowly tailored, in part, because the goals were tied 
to the number of minorities with the skills for the positions in 
question), reh'g granted, 49 F.3d 1048 (5th Cir. 1995).

---------------------------------------------------------------------------
    5. Duration and Periodic Review

    Under Croson, affirmative action represents a ``temporary'' 
deviation from ``the norm of equal treatment of all racial and ethnic 
groups.'' Croson, 488 U.S. at 510. A particular measure therefore 
should last only as long as it is needed. See Fullilove, 448 U.S. at 
513 (Powell, J., concurring). Given this imperative, a racial or ethnic 
classification is more likely to pass the narrow tailoring test if it 
has a definite end-date,\53\ or is subject to meaningful periodic 
review that enables the government to ascertain the continued need for 
the measure. The Supreme Court has said that a set end-date is less 
important where a program does not establish specific numerical targets 
for minority participation. Johnson, 480 U.S. at 640. However, it 
remains important for such a program to undergo periodic review. See 
id. at 639-40.
---------------------------------------------------------------------------
    \53\ See Paradise, 480 U.S. at 178 (plurality opinion) (race-based 
promotion requirement was narrowly tailored, in part, because it was 
``ephemeral,'' and would ``endured only until'' non-discriminatory 
promotion procedures were implemented); Sheet Metal Workers, 478 U.S. 
at 487 (Powell, J., concurring) (race-based hiring goal was narrowly 
tailored, in part, because it ``was not imposed as a permanent 
requirement, but [was] of limited duration''); Fullilove, 448 U.S. at 
513 (Powell, J., concurring) (race-based classification in public works 
legislation was narrowly tailored, in part, because it was ``not a 
permanent part of Federal contracting requirements''); O'Donnell 
Constr. Co., 963 F.2d at 428 (ordinance setting aside a percentage of 
city contracts for minority businesses was not narrowly tailored, in 
part, because it contained no ``sunset provision'' and no ``end [was] 
in sight'').
---------------------------------------------------------------------------
    Simply put, a racial or ethnic classification that was justified at 
the point of its adoption may no longer be required at some future 
point. If the classification is subject to reexamination from time to 
time, the government can react to changed circumstances by fine-tuning 
the classification, or discontinuing it if warranted. See Fullilove, 
448 U.S. at 489 (plurality opinion); see also Metro Broadcasting, 497 
U.S. at 594; Sheet Metal Workers, 478 U.S. at 478 (plurality opinion); 
id. at 487-88 (Powell, J., concurring).

    6. Burden

    Affirmative action necessarily imposes a degree of burden on 
persons who do not belong to the groups that are favored by a racial or 
ethnic classification. The Supreme Court has said, however, that some 
burdens are acceptable, even when visited upon individuals who are not 
personally responsible for the particular problem that the 
classification seeks to address. See Wygant, 476 U.S. at 280-81 
(plurality opinion) (``As part of this Nation's dedication to 
eradicating racial discrimination, innocent persons may be called upon 
to bear some of the burden of the remedy.''). This was implicitly 
reaffirmed in Croson and Adarand: in both cases, the Court 
``recognize[d] that any individual suffers an injury when he or she is 
disadvantaged by the government because of his or her race, whatever 
that race may be,'' \54\ but declined to hold that the imposition of 
that burden pursuant to an affirmative action measure is automatically 
unconstitutional.
---------------------------------------------------------------------------
    \54\ Adarand, 515 U.S. at 230 (citing Croson).
---------------------------------------------------------------------------
    In some situations, however, the burden imposed by an affirmative 
action program may be too high. As a general principle, a racial or 
ethnic classification crosses that threshold when it ``unsettle[s] . . 
. legitimate, firmly rooted expectation[s],'' \55\ or imposes the 
``entire burden . . . on particular individuals.'' \56\ Applying that 
principle in an employment case where seniority differences between 
minority and nonminority employees were involved, a plurality of the 
Court in Wygant stated that race-based layoffs may impose a more 
substantial burden than race-based hiring and promotion goals, because 
``denial of a future employment opportunity is not as intrusive as loss 
of an existing job.'' Wygant, 476 U.S. at 282-83; see also id. at 294 
(White, J., concurring). In a subsequent case, however, Justice Powell 
warned that ``it is too simplistic to conclude that hiring [or other 
employment] goals withstand constitutional muster whereas layoffs do 
not . . . . The proper constitutional inquiry focuses on the effect, if 
any, and the diffuseness of the burden imposed on innocent 
nonminorities, not on the label applied to the particular employment 
plan at issue.'' Sheet Metal Workers, 478 U.S. at 488 n. 3 (Powell, J., 
concurring).
---------------------------------------------------------------------------
    \55\ Johnson, 480 U.S. at 638.
    \56\ Sheet Metal Workers, 478 U.S. at 488 (Powell, J., concurring).
---------------------------------------------------------------------------
    In the contracting area, a racial or ethnic classification would 
upset settled expectations if it impaired an existing contract that had 
been awarded to a person who is not included in the classification. 
This apparently occurs rarely, if at all, in the Federal Government. A 
more salient inquiry therefore focuses on the scale of the exclusionary 
effect of a contracting program. For example, in Fullilove, Justice 
Powell thought it salient that the contracting requirement at issue in 
the case reserved for minorities a very small amount of total funds for 
construction work in the nation (less than one percent), leaving 
nonminorities able to compete for the vast remainder. For Justice 
Powell, this rendered the effect of the program ``limited and so widely 
dispersed that its use is consistent with fundamental fairness.'' 
Fullilove, 448 U.S. at 515. In some instances, conversely, the 
exclusionary effect of racial classifications in contracting may be 
considered too large. For example, the lower court in Croson held that 
Richmond's thirty percent minority subcontracting requirement imposed 
an impermissible burden because it placed nonminorities at a great 
``competitive disadvantage.'' J.A. Croson Co. v. City of Richmond, 822 
F.2d 1355, 1361 (4th Cir. 1987). Similarly, an affirmative action 
program that effectively shut nonminority firms out of certain markets 
or particular industries might establish an impermissible burden. For 
example, the dissenters in Metro Broadcasting felt that the FCC's 
distress sale unduly burdened nonminorities because it ``created a 
specialized market reserved exclusively for minority controlled 
applicants. There is no more rigid quota than a 100% setaside . . . . 
For the would-be purchaser or person who seeks to compete for the 
station, that opportunity depends entirely upon race or ethnicity.'' 
497 U.S. at 630 (O'Connor, J., dissenting). The dissenters also 
dismissed the majority's contention that the impact of distress sales 
on nonminorities was minuscule, given the small number of stations 
transferred through those means. The dissenters said that ``[i]t is no 
response to a person denied admission at one school, or discharged from 
one job, solely on the basis of race, that other schools or employers 
do not discriminate.'' Id.

    C. The Post-Croson Landscape at the State and Local Level

    Croson has not resulted in the end of affirmative action at the 
state and local level. There is no doubt, however, that Croson, in 
tightening the constitutional parameters, has diminished the incidence 
of such programs, at least in contracting and procurement. The post-
Croson experience of governments that continue to operate affirmative 
action programs in that area is instructive.\57\ Many governments 
reevaluated their MBE programs in light of Croson, and modified them to 
comport with the applicable standards. Typically, the centerpiece of a 
government's efforts has been a ``disparity study,'' conducted by 
outside experts, to analyze patterns and practices in the local 
construction industry. The purpose of a disparity study is to determine 
whether there is evidence of discrimination against minorities in the 
local construction industry that would justify the use of remedial 
racial and ethnic classifications in contracting and procurement. Some 
studies also address the efficacy of race-neutral alternatives. In 
addition to obtaining a disparity study, some governments have held 
public hearings in which they have received evidence about the workings 
of the local construction industry.
---------------------------------------------------------------------------
    \57\ A comprehensive review of voluntary affirmative action in 
public employment at the state and local level after Croson is beyond 
the scope of this memorandum. We note that a number of the programs 
have involved remedial racial and ethnic classifications in connection 
with hiring and promotion decisions in police and fire departments. 
Some of the programs have been upheld, and others struck down. Compare 
Peightal, (upholding race-based hiring goal in county fire department 
under Croson) with Long v. City of Saginaw, 911 F.2d 1192 (6th Cir. 
1990) (striking down race-based hiring goal in city police department 
under Croson and Wygant).
---------------------------------------------------------------------------
    Post-Croson affirmative action programs in contracting and 
procurement tend to employ flexible numerical goals and/or bidding 
preferences in which race or ethnicity is a ``plus'' factor in the 
allocation decision, rather than a hard setaside of the sort at issue 
in Croson. It appears that many of the post-Croson contracting and 
procurement programs that rest on disparity studies have not been 
challenged in court.\58\ At least one of the programs was sustained in 
litigation.\59\ Another was struck down as inconsistent with the Croson 
standards.\60\ Challenges to other programs were not resolved on 
summary judgment, and were remanded for further fact finding.\61\ 
Contracting and procurement programs that were not changed after Croson 
have met with a mixed reception in the courts.\62\
---------------------------------------------------------------------------
    \58\ That has been true in Richmond. It is our understanding that 
the city conducted a post-Croson disparity study and enacted a new MBE 
program that establishes a bidding preference of ``20 points'' for 
prime contractors who pledge to meet a goal of subcontracting sixteen 
percent of the dollar value of a city contract to MBEs. The program 
works at the ``prequalification'' stage, when the city is determining 
its pool of eligible bidders on a project. Once the pool is selected, 
the low bidder is awarded the contract.
    \59\ See Associated Gen. Contractors v. Coalition for Econ. Equity, 
950 F.2d 1401 (9th Cir. 1991), cert. denied, 503 U.S. 985 (1992).
    \60\ Associated Gen. Contractors v. City of New Haven, 791 F. Supp. 
941 (D. Conn. 1992), vacated on mootness grounds, 41 F.3d 62 (2d Cir. 
1994).
    \61\ Coral Constr. Co. v. King County, 941 F.2d 910 (9th Cir. 
1991), cert. denied, 502 U.S. 1033 (1992); Concrete Works v. City and 
County of Denver, 36 F.3d 1513 (10th Cir. 1994), cert. denied, 514 U.S. 
1004 (1995). The courts in these two cases commented favorably on 
aspects of the programs at issue and the disparity studies by which 
they are justified.
    \62\ We are aware of at least one such program that survived a 
motion for summary judgment and apparently is still in effect today. 
See Cone Corp. v. Hillsborough County, 908 F.2d 908 (11th Cir.), cert. 
denied, 498 U.S. 983 (1990). Others have been invalidated. See, e.g., 
O'Donnell Constr. Co. v. District of Columbia, 963 F.2d 420 (D.C. Cir. 
1992); Contractors' Assoc. v. City of Philadelphia, 893 F. Supp. 419 
(E.D. Pa. 1995); Arrow Office Supply Co. v. City of Detroit, 826 F. 
Supp. 1072 (E.D. Mich. 1993); F. Buddie Constr. Co. v. City of Elyria, 
773 F. Supp. 1018 (N.D. Ohio 1991); Main Line Paving Co. v. Board of 
Educ., 725 F. Supp. 1349 (E.D. Pa. 1989).
---------------------------------------------------------------------------
III. Application of the Croson Standards at the Federal Level
    In essence, Adarand federalizes Croson, with one important caveat: 
Congress may be entitled to some deference when it acts on the basis of 
race or ethnicity to remedy the effects of discrimination. The Court in 
Adarand hinted that at least where a Federal affirmative action program 
is congressionally mandated, the Croson standards might apply somewhat 
more loosely. The Court concluded that it need not resolve whether and 
to what extent the judiciary should pay special deference to Congress 
in this area. The Court did, however, cite the opinions of various 
Justices in Fullilove, Croson, and Metro Broadcasting concerning the 
significance of Congress' express constitutional power to enforce the 
anti-discrimination guarantees of the Thirteenth and Fourteenth 
Amendments--under Section 2 of the former and Section 5 of the latter--
and the extent to which courts should defer to exercises of that 
authority that entail the use of racial and ethnic classifications to 
remedy discrimination. See 515 U.S. at 230-31. Some of those opinions 
indicate that even under strict scrutiny, Congress does not have to 
make findings of discrimination with the same degree of precision as a 
state or local government, and that Congress may be entitled to some 
latitude with respect to its selection of the means to the end of 
remedying discrimination.\63\
---------------------------------------------------------------------------
    \63\ Section 1 of the Fourteenth Amendment prohibits states and 
municipalities from denying persons the equal protection of the laws. 
Section 5 gives Congress the power to enforce that prohibition. Because 
Section 1 of the Fourteenth Amendment only applies to states and 
municipalities, see United States v. Guest, 383 U.S. 745, 755 (1966), 
it is uncertain whether Congress may act under Section 5 of that 
amendment to remedy discrimination by purely private actors. See 
Adarand, 515 U.S. at 254 n. 10 (Stevens, J., dissenting) (``Because 
Congress has acted with respect to the States in enacting STURAA, we 
need not revisit today the difficult question of  5's applicability to 
pure regulation of private individuals.''); Metro Broad., 497 U.S. at 
605 (O'Connor, J., dissenting) (``Section 5 empowers Congress to act 
respecting the States, and of course this case concerns only the 
administration of Federal programs by Federal officials.''). 
Nevertheless, remedial legislation adopted under Section 5 of the 
Fourteenth Amendment does not necessarily have to act on the states 
directly. Indeed, when Congress seeks to remedy discrimination by 
private parties, it may be indirectly remedying discrimination of the 
states; for in some cases, private discrimination was tolerated or 
expressly sanctioned by the states. Private discrimination, moreover, 
often can be remedied under the enforcement provisions of the 
Thirteenth Amendment. Section 1 of that amendment prohibits slavery and 
involuntary servitude. Section 2 gives Congress the power to enforce 
that prohibition by passing remedial legislation designed to eliminate 
``the badges and incidents of slavery in the United States.'' Jones v. 
Alfred Mayer Co., 392 U.S. 409, 439 (1968). The Supreme Court has held 
that such legislation may be directed at remedying the discrimination 
of private actors, as well as that of the states. Id. at 438. See also 
Runyon v. McCrary, 427 U.S. 160, 179 (1976). In Fullilove, the 
plurality opinion concluded that the Commerce Clause provided an 
additional source of power under which Congress could adopt race-based 
legislation intended to remedy the discriminatory conduct of private 
actors. See Fullilove, 448 U.S. at 475 (plurality opinion).
---------------------------------------------------------------------------
    In Fullilove, Justice Powell's concurring opinion said that, even 
under strict scrutiny, ``[t]he degree of specificity required in the 
findings of discrimination and the breadth of discretion in the choice 
of remedies may vary with the nature and authority of a governmental 
body.'' Fullilove, 448 U.S. at 515 n. 14 (Powell, J., concurring). It 
was therefore of paramount importance to Justice Powell that the racial 
and ethnic classification in Fullilove was prescribed by Congress, 
which, Justice Powell admonished, ``properly may--and indeed must--
address directly the problems of discrimination in our society.'' Id. 
at 499. Justice Powell emphasized that Congress has ``the unique 
constitutional power'' to take such action under the enforcement 
clauses of the Thirteenth and Fourteenth Amendments. Id. at 500. See 
id. at 483 (plurality opinion) (``[I]n no organ of government, state or 
Federal, does there repose a more comprehensive remedial power than in 
the Congress, expressly charged by the Constitution with the competence 
and authority to enforce equal protection guarantees.''). Justice 
Powell observed that when Congress uses those powers, it can paint with 
a broad brush, and can devise national remedies for the national 
problem of racial and ethnic discrimination. Id. at 502-03 (Powell, J., 
concurring). Furthermore, Justice Powell said that through repeated 
investigation of that problem, Congress has developed familiarity with 
the nature and effects of discrimination: ``After Congress has 
legislated repeatedly in an area of national concern, its Members gain 
experience that may reduce the need for fresh hearings or prolonged 
debate when Congress again considers action in that area.'' Id. at 503. 
Because Congress need not redocument the fact and history of 
discrimination each time it contemplates adopting a new remedial 
measure, the findings that supported the Fullilove legislation were not 
restricted to the actual findings that Congress made when it enacted 
that measure. Rather, the record included ``the information and 
expertise that Congress acquires in the consideration and enactment of 
earlier legislation.'' Id. A court reviewing a race-based remedial act 
of Congress therefore ``properly may examine the total contemporary 
record of congressional action dealing with the problems of racial 
discrimination against [minorities].'' Id. Finally, Justice Powell gave 
similar deference to Congress when it came to applying the narrow 
tailoring test. He said that in deciding how best to combat 
discrimination in the country, the ``Enforcement Clauses of the 
Thirteenth and Fourteenth Amendments give Congress a . . . measure of 
discretion to choose a suitable remedy.'' Id. at 508.
    Justice O'Connor's opinion in Croson is very much in the same vein. 
She too commented that Congress possesses ``unique remedial powers . . 
. under  5 of the Fourteenth Amendment.'' Croson, 488 U.S. at 488 
(plurality opinion) (citing Fullilove, 448 U.S. at 483 (plurality 
opinion)). By contrast, state and local governments have ``no specific 
constitutional mandate to enforce the dictates of the Fourteenth 
Amendment,'' but rather are subject to its ``explicit constraints.'' 
Id. at 490 (plurality opinion). Therefore, in Justice O'Connor's view, 
state and local governments ``must identify discrimination, public or 
private, with some specificity before they may use race-conscious 
relief.'' Id. at 504. Congress, on the other hand, can make, and ``has 
made national findings that there has been societal discrimination in a 
host of fields.'' Id. It may therefore ``identify and redress the 
effects of society-wide discrimination'' through the use of racial and 
ethnic classifications that would be impermissible if adopted by a 
state or local government. Id. at 490 (plurality opinion).\64\ Justice 
O'Connor cited her Croson opinion and reiterated these general points 
about the powers of Congress in her Metro Broadcasting dissent. See 497 
U.S. at 605 (O'Connor, J., dissenting) (``Congress has considerable 
latitude, presenting special concerns for judicial review, when it 
exercises its unique remedial powers . . . under  5 of the Fourteenth 
Amendment.'') (internal quotations omitted).
---------------------------------------------------------------------------
    \64\ Justices Kennedy and Scalia declined to join that part of 
Justice O'Connor's opinion in Croson that drew a distinction between 
the respective powers of Congress and state or local governments in the 
area of affirmative action.
---------------------------------------------------------------------------
    It would be imprudent, however, to read too much into Justice 
Powell's opinion in Fullilove and Justice O'Connor's opinion in Croson. 
They do not, for example, support the proposition that Congress may 
simply assert that because there has been general societal 
discrimination in this country, legislative classifications based on 
race or ethnicity are a necessary remedy. The more probable 
construction of those opinions is that Congress must have some 
particularized evidence about the existence and effects of 
discrimination in the sectors and industries for which it prescribes 
racial or ethnic classifications. For example, Congress established the 
Fullilove racial and ethnic classification to remedy what the Court saw 
as the well-documented effects of discrimination in one industry--
construction--that had hindered the ability of minorities to gain 
access to public contracting opportunities. See Fullilove, 448 U.S. at 
505-06 (Powell, J., concurring); see also id. at 473 (plurality 
opinion).
    Based on this reading of Croson and Fullilove, the endorsement in 
Adarand of strict scrutiny of Federal affirmative action programs does 
not mean that Congress must find discrimination in every jurisdiction 
or industry affected by such a measure (although it is unclear whether, 
as a matter of narrow tailoring, the scope of a classification should 
be narrowed to exclude regions and trades that have not been affected 
by the discrimination that is to be remedied). State and local 
governments must identify discrimination with some precision within 
their jurisdictions; Congress's jurisdiction is the nation as a whole. 
But after Adarand, Congress is subject to the Croson ``strong basis in 
evidence'' standard. Under that standard, the general history of racial 
discrimination in the nation would not be a sufficient predicate for a 
remedial racial or ethnic classification. In addition, evidence of 
discrimination in one sector or industry is not always probative of 
discrimination in other sectors and industries. For example, a history 
of lending discrimination against minorities arguably cannot serve as a 
catch-all justification for racial and ethnic classifications 
benefitting minority-owned firms through the entire economy; 
application of the narrow tailoring test would suggest that if lending 
discrimination is the problem being addressed, then the government 
should tackle it directly.\65\
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    \65\ Patterns and practices of bank lending to minorities, may, 
however, reflect a significant ``secondary effect'' of discrimination 
in particular sectors and industries, i.e., because of that 
discrimination, minorities cannot accumulate the necessary capital and 
achieve the community standing necessary to qualify for loans.
---------------------------------------------------------------------------
    Furthermore, under the new standard, Congress probably does not 
have to hold a hearing or draft a report each time it adopts a remedial 
racial or ethnic classification. But where such a classification rests 
on a previous law or series of laws, those earlier measures must be 
supported by sufficient evidence of the effects of discrimination. And 
if the findings in the older laws are stale, Congress or the pertinent 
agency may have to demonstrate the continued relevance of those 
findings; this would satisfy the element of the narrow tailoring test 
that looks to the duration of classifications and whether they are 
subject to reevaluation. Where the record is sparse, Congress or the 
relevant agency may have to develop it. That endeavor may involve the 
commissioning of disparity studies of the type that state and local 
governments around the country undertook after Croson to demonstrate 
that remedial racial and ethnic classifications in public contracting 
are warranted. Together, the myriad state and local studies may provide 
an important source of evidence supporting the use by the Federal 
Government of national remedial measures in certain sectors of the 
economy.
    Whatever deference a court might accord to Federal remedial 
legislation after Adarand, it is undecided whether the same degree of 
deference would be accorded to nonremedial legislation. In Metro 
Broadcasting, the majority gave substantial deference to congressional 
judgments regarding the need for diversity in broadcasting and the 
linkage between the race of a broadcaster and programming output. Metro 
Broad., 497 U.S. at 566, 572-73, 591 n. 43. The dissenters did not do 
so, precisely because the classifications were nonremedial and hence, 
in their view, did not implicate Congress' powers under the Enforcement 
Clauses of the Thirteenth and Fourteenth Amendments. Id. at 605, 628-29 
(O'Connor, J., dissenting).
    Finally, many existing Federal affirmative action programs are not 
specifically mandated by Congress. Courts are unlikely to accord 
Federal agencies acting without a congressional mandate the same degree 
of deference accorded judgments made by Congress itself. Agencies do 
not have the ``institutional competence'' and explicit ``constitutional 
authority'' that Congress possesses. Adarand, 515 U.S. at 253 (Stevens, 
J., dissenting).\66\ Although some existing agency programs were not 
expressly mandated in the first instance in legislation, they may 
nonetheless be viewed by a court as having been mandated by Congress 
through subsequent congressional action. For example, in Metro 
Broadcasting, the programs at issue were established by the FCC on its 
own; Congress's role was limited to FCC oversight hearings and the 
passage of an appropriations rider that precluded the FCC from using 
any funds to reconsider or cancel its programs. 497 U.S. at 572-79. The 
majority concluded that this record converted the FCC programs into 
measures that had been ``specifically approved--indeed, mandated by 
Congress.'' Id. at 563.
---------------------------------------------------------------------------
    \66\ See Milwaukee County Pavers Ass'n, 710 F. Supp. at 1540 n. 3 
(noting that for purposes of judicial review of affirmative action 
measures, there is a distinction between congressionally mandated 
measures and those that are ``independently established'' by a Federal 
agency), aff'd, 922 F.2d 419 (7th Cir.), cert. denied, 500 U.S. 954 
(1991); cf. Bakke, 438 U.S. at 309 (opinion of Powell, J.) (public 
universities, like many ``isolated segments of our vast governmental 
structure are not competent to make [findings of national 
discrimination], at least in the absence of legislative mandates and 
legislatively determined criteria'').
---------------------------------------------------------------------------
    Under strict scrutiny, it is uncertain what level of congressional 
involvement is necessary before a court will review an agency's program 
with deference. What may be required is evidence that Congress plainly 
has brought its own judgment to bear on the matter. Cf. Adarand, 515 
U.S. at 252 (Stevens, J., dissenting) (``An additional reason for 
giving greater deference to the National Legislature than to a local 
law-making body is that Federal affirmative-action programs represent 
the will of our entire Nation's elected representatives . . . .'') 
(emphasis added); id. at 255 (Stevens, J., dissenting) (``Congressional 
deliberations about a matter as important as affirmative action should 
be accorded far greater deference than those of a State or 
municipality.'') (emphasis added).
IV. Conclusion
    Adarand makes it necessary to evaluate Federal programs that use 
race or ethnicity as a basis for decisionmaking to determine if they 
comport with the strict scrutiny standard. No affirmative action 
program should be suspended prior to such an evaluation. The 
information gathered by many agencies in connection with the 
President's recent review of Federal affirmative action programs should 
prove helpful in this regard. In addition, appended to this memo is a 
nonexhaustive checklist of questions that provides initial guidance as 
to what should be considered in that review process. Because the 
questions are just a guide, no single answer or combination of answers 
is necessarily dispositive as to the validity of any given program.

                                                      Walter Dellinger,
                                            Assistant Attorney General,
                                               Office of Legal Counsel.
Appendix: Questions to Guide Review of Affirmative Action Programs
I. Authority
    Is the use of racial or ethnic criteria as a basis for 
decisionmaking mandated by legislation? If not mandated, is it 
expressly authorized by legislation? If there is no express 
authorization, has there been any indication of congressional approval 
of an agency's action in the form of appropriations riders or oversight 
hearings? These questions are important, because Congress may be 
entitled to some measure of deference when it decides that racial and 
ethnic classifications are necessary.
    If there is no explicit legislative mandate, authorization, or 
approval, is the program premised on an agency rule or regulation that 
implements a statute that, on its face, is race-neutral? For example, 
some statutes require agencies to give preferences to ``disadvantaged'' 
individuals, but do not establish a presumption that members of racial 
groups are disadvantaged. Such a statute is race-neutral. Other 
statutes, like those at issue in Adarand, require agencies to give 
preferences to ``disadvantaged'' individuals, but establish a 
rebuttable presumption that members of racial groups are disadvantaged. 
Such a statute is race-conscious, because it authorizes agencies to use 
racial criteria in decisionmaking.
II. Purpose
    What is the objective of the program? Is it intended to remedy 
discrimination, to foster racial diversity in a particular sector or 
industry, or to achieve some other purpose? Is it possible to discern 
the purpose from the face, the relevant statute or legislation? If not, 
does the record underlying the relevant legislation or regulation shed 
any light on the purpose of the program?
A. Factual Predicate: Remedial Programs
    If the program is intended to serve remedial objectives, what is 
the underlying factual predicate of discrimination? Is the program 
justified solely by reference to general societal discrimination, 
general assertions of discrimination in a particular sector or 
industry, or a statistical underrepresentation of minorities in a 
sector or industry? Without more, these are impermissible bases for 
affirmative action. If the discrimination to be remedied is more 
particularized, then the program may satisfy Adarand. In assessing the 
nature of the factual predicate of discrimination, the following 
factors should be taken into account:

  1.  Source. Where can the evidence be found? Is it contained in find 
            set forth in a relevant statute or legislative history 
            (committee reports and hearings)? Is evidence contained in 
            findings that an agency has made on its own in connection 
            with a rulemaking process or in the promulgation of 
            guidelines? Do the findings expressly or implicitly rest on 
            findings made in connection with a previous, related 
            program (or series of programs)?

  2.  Type. What is the nature of the evidence? Is it statistical or 
            documentary? Are the statistics based on minority 
            underrepresentation in a particular sector or industry 
            compared to the general minority population? Or are the 
            statistics more sophisticated and focused? For example, do 
            they attempt to identify the number of qualified minorities 
            in the sector or industry or seek to explain what that 
            number would look like ``but for'' the exclusionary effects 
            of discrimination? Does the evidence seek to explain the 
            secondary effects of discrimination--for example, how the 
            inability of minorities to break into certain industries 
            due to historic practices of exclusion has hindered their 
            ability to acquire the requisite capital and financing? 
            Similarly, where health and education programs are at 
            issue, is there evidence on how discrimination has hampered 
            minority opportunity in those fields, or is the evidence 
            simply based on generalized claims of societal 
            discrimination? In addition to any statistical and 
            documentary evidence, is there testimonial or anecdotal 
            evidence of discrimination in the record underlying the 
            program--for example, accounts of the experiences of 
            minorities and nonminorities in a particular field or 
            industry?

  3.  Scope. Are the findings purported to be national in character and 
            dimension? Or do they reflect evidence of discrimination in 
            certain regions or geographical areas?

  4.  ``Authorship''. If Congress or an agency relied on reports and 
            testimony of others in making findings, who is the 
            ``author'' of that information? The Census Bureau? The 
            General Accounting Office? Business and trade associations? 
            Academic experts? Economists? (There is no necessary 
            hierarchy in assessing authorship, but the identity of the 
            author may affect the credibility of the findings.)

  5.  Timing. Since the adoption of the program, have additional 
            findings of discrimination been assembled by Congress or 
            the agency that could serve to justify the need for the 
            program when it was adopted? If not, can such evidence be 
            readily assembled now? These questions go to whether 
            ``post-enactment'' evidence can be marshaled to support the 
            conclusion that remedial action was warranted when the 
            program was first adopted.
B. Factual Predicate: Nonremedial Programs
    Adarand does not directly address whether and to what extent 
nonremedial objectives for affirmative action may constitute a 
compelling governmental interest. At a minimum, to the extent that an 
agency administers a nonremedial program intended to promote diversity, 
the factual predicate must show that greater diversity would foster 
some larger societal goal beyond diversity for diversity's sake. The 
level and precision of empirical evidence supporting that nexus may 
vary, depending on the nature and purpose of a nonremedial program. For 
a nonremedial program, the source, type, scope, authorship, and timing 
of underlying findings should be assessed, just as for remedial 
programs.
III. Narrow Tailoring
A. Race-Neutral Alternatives
    Did Congress or the agency consider race-neutral means to achieve 
the ends of the program at the time it was adopted? Race-neutral 
alternatives might include preferences based on wealth, income, 
education, family, geography. In the commercial setting, another such 
alternative is a preference for new, emerging businesses. Were any of 
these alternatives actually tried and exhausted? What was the nature 
and extent of the deliberation over any race-neutral alternatives--for 
example, congressional debate? agency rulemaking? Was there a judgment 
that race-neutral alternatives would not be as efficacious as race-
conscious measures? Did Congress or the agency rely on previous 
consideration and rejection of race-neutral alternatives in connection 
with a prior, related race-conscious measure (orseries of measures)?
B. Continued Need
    How long has the program been in existence? Even if there was a 
compelling justification at the time of adoption, that may not be the 
case today. Thus, an agency must determine whether there is a continued 
need for the program. In that regard, does the program have an end 
date? Has the end date been moved back? Is the program subject to 
periodic oversight? What is the nature of that oversight--does Congress 
play a role through hearings/reports, or does the agency conduct the 
review or oversight on its own? Has the program ever been adjusted or 
modified in light of a periodic review? What were the results of the 
most recent review and oversight conducted by either Congress or the 
agency? Is there evidence of what might result if the racial 
classification were discontinued? For example, is there evidence of the 
current level of minority participation in government contracting where 
racial criteria are not used (which may speak to whether discrimination 
can be remedied without a preference)?
C. Pool of Beneficiaries
    Are the benefits of the program spread relatively equally among 
minority individuals or businesses? Is there information on whether the 
same individuals or businesses tend to reap most of the benefits, and 
if so, whether those beneficiaries have overcome discrimination? If the 
program is intended to remedy discrimination against minorities, does 
it include among its beneficiaries subgroups that may not have been 
discriminated against? Is there a procedure for tailoring the pool of 
beneficiaries to exclude such subgroups? Is there a mechanism for 
evaluating whether the program is needed for segments within a larger 
industry that have been the locus of discrimination?
D. Manner in Which Race is Used
    Does the program establish fixed numerical set-asides? Is race an 
explicit requirement of eligibility for the program? If there is no 
such facial requirement, does the program operate that way in practice? 
Or is race just one of several factors--a ``plus''--used in 
decisionmaking? Could the objectives of a program that uses race as a 
requirement for eligibility be achieved through a more flexible use of 
race?
E. Burden
    What is the nature of the burden imposed on persons who are not 
included in the racial or ethnic classification that the program 
establishes? Does the program displace those persons from existing 
positions/contracts? Does it upset any settled expectations that they 
have? Even if that is not the case, the burden may be impermissible 
where the exclusionary impact is too great. What is the exclusionary 
impact in terms of size and dimension? What is the dollar value of the 
contracts/grants/positions in question? Does the exclusionary impact of 
the program fall upon a particular group or class of individuals or 
sectors, or is it more diffuse? What is the extent of other 
opportunities outside the program? Are persons who are not eligible for 
the preference put at a significant competitive disadvantage as a 
result of the program?
                                 ______
                                 
Submitted Book by Hon. Bobby L. Rush, a Representative in Congress from 
                               Illinois *
---------------------------------------------------------------------------
    * Editor's note: the book, in its entirety, is retained in 
Committee file. It can be accessed online at: https://
digitalcommons.law.uga.edu/books/138/.




          * * * * *
    Historian Manning Marable has lamented that ``the most striking 
fact about American economic history and politics is the brutal and 
systemic underdevelopment of Black people.'' \18\ When the Emancipation 
Proclamation was signed in 1863, the Black community owned a total of 
0.5 percent of the total wealth in the United States. This number is 
not surprising; slaves were forbidden to own anything, and the few 
freed Blacks living in the North had few opportunities to accumulate 
wealth. What is staggering is that more than 150 years later, that 
number has barely budged--Blacks still own only about one percent of 
the wealth in the United States.\19\ When Martin Luther King stood on 
the steps of the Lincoln Memorial in 1963, he said that ``America has 
given the Negro people a bad check, a check which has come back marked 
`insufficient funds.' '' \20\
---------------------------------------------------------------------------
    \18\ Manning Marable, How Capitalism Underdeveloped Black America 
(Chicago: Haymarket Books, 2015), 1.
    \19\ Dalton Conley, Being Black, Living in the Red: Race, Wealth, 
and Social Policy in America (Berkeley: University of California Press, 
2010), 25.
    \20\ Martin Luther King Jr., ``I Have a Dream,'' Speech, Lincoln 
Memorial, Washington, D.C., August 28, 1963.
---------------------------------------------------------------------------
          * * * * *
                                 ______
                                 
Submitted Case by Hon. Salud O. Carbajal, a Representative in Congress 
                            from California

 
 
------------------------------------------------------------------------
    In the United States District Court for the District of Columbia
------------------------------------------------------------------------
Guadalupe L. Garcia, Jr., for
 himself and on behalf of G.A.
 Garcia and Sons Farm,
9303 North Dona Ana Rd.
Las Cruces, New Mexico 88007
 
  and
 
Tony and Patricia Jimenez,
3671 Old Toll Road,
Cathey's Valley, California 95306
 
  and
 
Edward and Norma Flores,             Civil Action No. 1:00CV02445
PO Box 963,                          Judge: James R. Robertson
Chimayo, New Mexico 87522            Third Amended Class Action
                                      Complaint
 
  and
 
Gloria Moralez,
153 North Effie,
Fresno, California 93721
 
  and
 
Beatrice and Rodolfo Garza,
109 North Avenue C,
Crystal City, Texas 78839
 
  and
 
Larry Chavarria and Robert
 Chavarria for themselves and on
 behalf of Chavarria Farming Co.,
PO Box 386,
Lemoore, California 93245
 
  and
 
Mr. Rigoberto Banuelos,
6412 S. Walnut,
Fresno, CA 93706
 
  and
 
Mr. Modesto Rodriquez, Mr. Ruperto
 R. Rodriguez, Mr. Modesta Salazar,
 Rodriguez Brothers, Inc.,
11618 Pompano Lane,
Houston, TX 77072
 
  and
 
    on behalf of themselves and all
 others similarly situated,
 including but not limited to the
 following individual plaintiffs:
 
Mr. Esrael Mendoza,
PO Box 944,
Willcox, AZ 85644
 
  and
 
Mr. Ysidoro F. Mendoza,
PO Box 494,
Willcox, AZ 85644
 
  and
 
Mr. Ruben Alvarez,
7336 S. Alta Avenue,
Fresno, CA 93654
 
  and
 
Mr. Salvador Amezquita,
24795 El Rosario St.,
Salinas, CA 93906
 
  and
 
Mr. Gustovo Arevalo,
228 Tapadero St,
Salinas, CA 93906
 
  and
 
Mr. Ricardo Arevalo,
228 Tapadero St.,
Salinas, CA 93906
 
  and
 
Mr. Juan Atayde,
12919 Kennedy Circle,
Salinas, CA 93906
 
  and
 
Mr. Efrain E. Bernal,
490 Pini Rd.,
Watsonville, CA 95076
 
  and
 
Mr. Alejandro Camargo,
1478 E. El Dorado,
Reddley, CA 93654
 
  and
 
Mr. Jose Camargo,
946 E. Carob Avenue,
Reedley, CA 93654
 
  and
 
Mr. & Mrs. Jose Chaidez,
PO Box 3467,
Clovis, CA 93613
 
  and
 
Mr. Valentin Cornejo,
153 Live Oak Rd.,
Watsonville, CA 95076
 
  and
 
Mr. Antonio Espindola,
41650 Road 68,
Diniba, CA 93618
 
  and
 
Mr. Joe Flores,
PO Box 2771,
Fresno, CA 93745
 
  and
 
Mr. Jaime Fuentes,
13665 E. Gettysburg,
Sanger, CA 93657
 
  and
 
Mr. Ramon L. Garcilazo,
583 Mariposa Street,
Salinas, CA 93906
 
  and
 
Ms. Joanne Garza,
PO Box 36,
Parlier, CA 93648
 
  and
 
Mr. Norbero Iriarte,
2035 S Whitney,
Fresno, CA 93702
 
  and
 
Mr. Alberto Jauregui,
6 Newlyn Street,
Salinas, CA 93906
 
  and
 
Mr. Javier Ledesma,
PO Box 941,
Hollister, CA 95024
 
  and
 
Ms. Dora Linares,
4822 S. Temperance,
Fresno, CA 93625
 
  and
 
Mr. Reyes Mancillas,
7299 S. East Avenue,
Fresno, CA 93725
 
  and
 
Mr. Albert Mendina,
10845 S. Walnut,
Fresno, CA 93706
 
  and
 
Mr. Angel Medina,
86 Hidden Valley Road,
Royal Oaks, CA 95076
 
  and
 
Ms. Rita M. Moreno,
86 Hidden Valley Road,
Royal Oaks, CA 95076
 
  and
 
Ms. Florencio R. Orozco,
2073 Santa Rita St. #15,
Salinas, CA 93906
 
  and
 
Mr. Espirion Puentes,
6134 W. Belmont Avenue,
Fresno, CA 93722
 
  and
 
Mr. Mateo Ruiz,
1023 W. Clayton,
Fresno, CA 93706
 
  and
 
Ms. Stella Ruiz,
5782 S. Elm Street,
Fresno, CA 93706
 
  and
 
Mr. Ignacio Ruiz, Jr.,
7135 S. Orange,
Fresno, CA 93725
 
  and
 
Mr. Jose Tellez,
1151 M Street,
Reedley, CA 93654
 
  and
 
Mr. Enrique Vasquez,
7671 S. Orange,
Fresno, CA 93725
 
  and
 
Mr. Jess Vasquez,
1626 E. Floral Avenue,
Fresno, CA 93725
 
  and
 
Mr. Tommy Vasquez,
4636 W. American,
Fresno, CA 93706
 
  and
 
Mr. Frank Velarde,
1505 E. Main,
Trinidad, CO 81082
 
  and
 
Mr. Alberto A. Acosta,
PO Box 333,
Animas, NM 88020
 
  and
 
Mr. & Mrs. Jimmy & Elizabeth
 Alvarez,
Star Route, Box 18,
Salem, NM 87941
 
  and
 
Mr. Juan Cisneros,
PO Box 704,
Questa, NM 87556
 
  and
 
David Flores,
173 Chickasaw Road,
Hagerman, NM 88232
 
  and
 
Mr. Oracio Encinias,
3638 Quay Road 63.8,
Tucumcari, NM 88401
 
  and
 
Mr. Patrick R. Flores,
PO Box 158,
Pecos, NM 87552
 
  and
 
Mr. Gilbert L. Garcia,
9300 N. Highway 185,
Las Cruces, NM 88007
 
  and
 
Mr. Homer Garza,
PO Box 34,
Mesquite, NM 88048
 
  and
 
Mr. & Mrs. F. Richard & Mary Helen
 Llanez,
1620 W. OHara Rd.,
Anthony, NM 88021
 
  and
 
Mr. Edwardo R. Lopez,
10306 St. Hwy. 104,
Tucumcari, NM 88401
 
  and
 
Ms. Sonja M. Myers,
1356 County Road S.,
Clovis, NM 88101
 
  and
 
Mr. Roberto Ortega,
1802 W. Washington,
Anthony, NM 88021
 
  and
 
Mr. Robert Ortega, Jr.,
855 Royce Road,
La Mesa, NM 88044
 
  and
 
Mr. Edward W. Provencio,
PO Box 38,
Chamberino, NM 88027
 
  and
 
Mr. George L. Provencio,
2208 W. Washington,
Anthony, NM 88021
 
  and
 
Mr. Alfredo Alvarez,
9747 Southside Road,
El Paso, TX 79927
 
  and
 
Mr. Manuel Cantu,
PO Box 973,
San Juan, TX 78589
 
  and
 
Mr. Alex Contreras,
390 Duhon Drive,
Sour Lake, TX 77659
 
  and
 
Mr. Joe Contreras,
PO Box 912,
Childress, TX 79201
 
  and
 
Mr. Luis Contreras,
PO Box 912,
Childress, TX 79201
 
  and
 
Mr. Tyn Davis,
PO Box 751,
Ft. Hancock, TX 79839
 
  and
 
Mr. Hector T. Flores,
7535 Adobe Rd.,
El Paso, TX 79915
 
  and
 
Mr. Juan J. Flores,
7535 Adobe Rd.,
El Paso, TX 79915
 
  and
 
Mr. Salvador T. Flores,
PO Box 510,
Fabens, TX 79838
 
  and
 
Mr. Jose Luis Galvan,
PO Box 130,
Ft. Hancock, TX 79839
 
  and
 
Mr. Albert Garcia,
470 CR 44,
Muleshoe, TX 79347
 
  and
 
Mr. Jose Gutierrez,
PO Box 21,
Maple, TX 79344
 
  and
 
Mr. Alberto M. Ortega,
Rt. 3 Box 111,
Mercedes, TX 78570
 
  and
 
Mr. Rene Ortega,
Rt. 3 Box 108-M,
Mercedes, TX 78570
 
  and
 
Mr. Greg Ramon,
220 South East 6th Street,
Morton, TX 79346
 
  and
 
Mr. Guadelupe Rejino,
Route 3 Box 285,
Muleshoe, TX 79347
 
  and
 
Mr. Roberto Salinas,
PO Box 176,
Smyer, TX 79367
 
  and
 
Mr. Romeo Salinas,
PO Box 176,
Smyer, TX 79367
 
  and
 
Mr. Erasmo Valdez,
RR 3 Box 226-A,
Mercedes, TX 78570
 
  and
 
Mr. Dionicio Valdez II,
1201 Lantana Lane,
Weslaco, TX 78596
 
  and
 
Mr. Arturo Vasquez,
PO Box 485,
Fabens, TX 79838
 
  and
 
Mr. & Mrs. Rodolfo (deceased) &
 Delia Vasquez,
PO Box 595,
Fabens, TX 79838
 
  and
 
Mr. David L. Hinojosa, Sr.,
1215 Boyer Ave.,
Walla Walla, WA 99362
 
    Plaintiffs,
 
  v.
 
Michael Johanns, Secretary,
The United States Department of
 Agriculture,
14th and Independence Avenue, S.W.,
Washington, D.C. 20250
 
    Defendant.

Third Amended Class Action Complaint (For Declaration Judgment, Review 
        of Agency Action, Violations of Equal Credit Opportunity Act, 
        and Other Relief)
I. Overview
    The Congress has created, and heavily funded with taxpayer dollars, 
loan programs specifically targeted to provide assistance to those 
family farmers unable to secure needed capital elsewhere. The United 
States Department of Agriculture (``USDA''), acting through the Farm 
Service Agency (``FSA'') and formerly through the Farmers Home 
Administration (``FmHA'') (until 1994), is required to administer this 
loan program in a fair, equitable and nondiscriminatory manner. In 
addition, USDA administers taxpayer funded benefit and disaster relief 
programs which significantly impact family farmers and which USDA is 
likewise legally obliged to administer free of discrimination.
    This lawsuit arises because, unfortunately, for decades USDA has 
systematically discriminated against Hispanic farmers and ranchers 
(``Hispanic farmers''); indeed, against nonwhite male farmers 
generally. Black farmers, Native American farmers and female farmers 
have separately initiated litigation attacking the problem. At the core 
of each lawsuit is the same problem. Despite repeated warnings of the 
consequences of doing so, USDA has maintained, and continues to 
maintain, a system of administering its farm credit and non-credit 
benefit programs that gives virtually unfettered discretion to local 
officials to enforce highly subjective eligibility criteria that, in 
turn, give vent to hostility toward minority farmers which deprives 
them of an equal, fair opportunity to participate in such programs.
    The hostility toward Hispanic farmers and the resulting 
discrimination are hallmarks of the decentralized system through which 
USDA distributes and administers its loan and benefit programs. More 
particularly, this discrimination manifests itself, among other ways, 
by seeking to discourage those Hispanic farmers who would dare attempt 
to avail themselves of USDA farm credit and non-credit benefit 
programs. This discouragement took various forms: first, Hispanics were 
consistently discouraged from even applying for loans or benefits; 
second, those Hispanics who nevertheless persisted in filing an 
application for loans or benefits experienced long delays in processing 
their applications; third, they experienced a high denial rate based 
upon highly subjective eligibility criteria; fourth, those Hispanics to 
whom loans were granted either experienced prejudicial delays in 
receiving the needed loans, received less than the requested loan 
amount or were subject to burdensome supervised bank accounts 
(``SBAs''), and fifth, when those farmers eventually needed loan 
servicing assistance, they received delayed or no such assistance. The 
difficulty confronting Hispanic farmers is compounded because the USDA 
mechanism for handling their discrimination complaints--which USDA 
encouraged aggrieved minority farmers to file--was useless. USDA failed 
to investigate the complaints, willfully avoided processing or 
resolving the complaints, stretched the review process out over many 
years, conducted meaningless or ``ghost'' investigations, or simply 
failed to do anything. And, USDA has to date failed to take meaningful 
remedial action to address the situation.
    This situation is all the more egregious both because there is no 
real dispute about the facts and because it has persisted for so long. 
Beginning in 1965, the United States Commission on Civil Rights 
(``Civil Rights Commission'') has published a series of studies 
documenting the nature and extent of USDA's discrimination against 
minority farmers in the delivery of loan and benefit programs. 
Congressional committees, the General Accounting Office (``GAO'') and 
others outside USDA have recognized the pervasiveness of the problem 
and urged USDA to reform. Indeed, USDA conducted its own internal 
investigations of the problems, conceded that the critics were correct, 
and yet has failed effectively to address, much less to remedy, the 
problem. Consequently, notwithstanding all the publicity about this 
discrimination that infects USDA's farm credit and non-credit benefit 
programs and not withstanding all of USDA's lip service to reform, 
little has changed for Hispanic farmers.
    USDA partially addressed essentially identical complaints by Black 
farmers in the Pigford, et. al. v. Glickman, Civil Action No. 97-1978 
and 185 F.R.D. 82 (D.D.C. 1999) (approving Consent Decree) 
(``Pigford''), but has steadfastly refused to accommodate the concerns 
of Hispanic farmers. While the Pigford decree refers to certain 
remedial relief that relief has proven to be largely illusory in 
implementation and, for all practical purposes, the Black farmer class 
received only monetary damages (some $850M to date). This left the USDA 
farm and loan benefit system untouched and has become a source of 
consternation and discontent to Black farmers who received liquidated 
damages only to be confronted by the same discrimination the next time 
they applied for USDA farm credit. In addition, USDA has proven unable 
or unwilling to reform itself. Congress has likewise been unable or 
unwilling to rectify the situation. Out of desperation Hispanic farmers 
have chosen the only avenue open to them in their search for fair and 
equal treatment. Given the growing numbers of Hispanics who wish to 
farm in a effort to improve their economic lot, and given the existence 
of USDA loan and benefit programs enacted by Congress for the express 
purpose of assisting beginning farmers and ranchers and enabling 
existing family farms to continue to operate, it is imperative that the 
Court ensure that the necessary reforms are finally undertaken. In so 
doing, the Court will not only fix the system for Hispanic farmers but 
for all farmers--minority and majority farmers. Secondarily, the Court 
should address the damages that are the natural consequence of the 
discrimination described herein. In that connection, the use of 
computer modeling to calculate any such damages will facilitate the 
class-wide treatment of such claims. As the experience of the Pigford 
class members makes abundantly clear, to award money damages without 
taking the necessary remedial action to eradicate the systemic 
discrimination that pervades USDA's credit and benefit programs is, in 
the final analysis, a prescription for continued discrimination. This 
case presents an opportunity to complete the unfinished business left 
in the wake of the Pigford decree and to eradicate once and for all the 
discrimination that infects the USDA's farm credit and benefit 
programs.
II. Jurisdiction
    1. Jurisdiction is founded upon 15 U.S.C.  1691e(a), 28 U.S.C.  
1331, 28 U.S.C.  1343, 28 U.S.C.  2201, 42 U.S.C.  2000d, 5 U.S.C.  
706 and 7 U.S.C.  2279.
III. Venue
    2. Venue lies in this judicial district pursuant to 28 U.S.C.  
1391(b) and (e).
IV. Parties
    3. Plaintiff and proposed Class representative Guadalupe L. Garcia, 
Jr., is an Hispanic American farmer and resident of Dona Ana County, 
New Mexico. He and his father and brother, also Hispanic American 
farmers, farmed together as G.A. Garcia and Sons Farm. They produced 
cotton, peas, alfalfa, and hay on their farm. They owned two farms in 
Dona Ana County, one with 550 acres of arable land and the other with 
78 acres of arable land. They also leased land occasionally for their 
farm operation.
    4. In 1986, plaintiff Garcia worked with the assistance of the FmHA 
personnel to develop a farm and home plan and an application for direct 
loans, but FmHA rejected the application. In 1988, plaintiff applied 
for primary loan servicing but was denied this servicing after a 2 year 
delay. Again, in 1994, FSA refused to work with plaintiff on a farm 
debt restructuring with guaranteed loans. Finally in 1998, when 
plaintiff needed to sell part of the land to service delinquent debt 
and had found a buyer, FSA refused to provide financing to allow the 
sale to take place. In each instance, plaintiff timely filed for the 
FSA financial assistance programs or loans and was qualified for the 
assistance and loans, but, due to willful and continuous racial/ethnic 
discrimination by the local and state FSA offices, was denied the 
assistance and loans. In each instance, similarly situated white 
farmers received more favorable treatment. As a result, plaintiff 
suffered severe economic losses, including a farmer's ultimate 
penalty--their farms were sold at a foreclosure sale in 1999.
    5. Plaintiff filed several complaints with USDA about this 
treatment. Guadalupe L. Garcia, Jr., registered a complaint regarding 
the discrimination with the FSA official that assisted plaintiff 
prepare the farm and home plan/loan application in 1986. Again, in the 
early 1990s, he filed a complaint with the office of Senator Dominici 
and USDA. In 1998 and 2000, he filed additional complaints with USDA's 
Office of Civil Rights. USDA never acted on these complaints thereby 
causing plaintiff further damages.
          * * *
    6. Plaintiffs and proposed Class representatives Tony and Patricia 
Jimenez are Hispanic farmers and residents of Mariposa County, 
California. They operate a 299 acre cattle ranch. Tony Jimenez has 
lived on a cattle ranch since he was 9 years old, and has life-long 
experience operating dairy and beef cattle ranches.
    7. They received a $200,000 farm ownership loan from FmHA to 
acquire the ranch in 1989 and had sought an operating loan at the same 
time. The operating loan was absolutely essential to enable them to 
operate the ranch at full and efficient capacity, which was necessary 
so that they could service the large ownership debt. They were denied 
the operating loan without explanation. They reapplied for the 
operating credit in 1990 but were denied. In 1992, they applied for an 
emergency loan, but were turned down. In 1992, they also requested a 60 
day extension on their loan because cattle prices were at a 20 year low 
and they needed to sell cattle to make their loan installment to FmHA. 
This too was denied. In December 1995, the Jimenezes paid FSA (formerly 
FmHA) more than $52,000 to bring the mortgage on the ranch up to date, 
and at the same time they asked for a loan deferral and an adjustment 
in the interest rate on the remainder due on the mortgage loan to 
reflect substantial reduction in interest rates since 1990. FSA did not 
provide them the application for this servicing for 4 months. Then, 
after holding the application for 2 years, FSA denied it in October 
1998.
    8. This extended pattern of denial of loans and services--treatment 
different than that received by similarly situated white farmers--was a 
series of acts of willful and continuous racial/ethnic discrimination, 
and as a result of the discrimination, the ranch operation has suffered 
severe economic losses and the Jimenezes are on the verge of losing 
their farm to foreclosure. They filed civil rights complaints with USDA 
and Members of Congress in a timely fashion, but these complaints have 
never been acted on, causing them further damages.
          * * *
    9. Plaintiffs and proposed Class representatives Mr. Edward and 
Mrs. Norma Flores come from a long tradition of farming. They began 
farming in 1972. For 16 years, Mr. and Mrs. Flores farmed over 300 
acres. Their crops included chili peppers, cotton and cabbage.
    10. Between 1985 and 1988, USDA discriminated against Mr. and Mrs. 
Flores on at least four separate occasions. Their experience is typical 
of other Hispanic farmers in their area.
    11. In January 1985, Mr. and Mrs. Flores applied at their local 
FmHA office for an operating loan of approximately $100,000. They 
needed the loan to prepare for planting their crops by March, but 
funding was delayed until late May, well after planting season.
    12. A similar incident occurred a year later in 1986. They again 
applied for an operating loan in January, which they did not receive 
until late May. In addition, FmHA demanded excessive collateral for the 
loan. Mr. and Mrs. Flores were required to put up their land (valued at 
$413,000) and equipment (valued at $60,000) for a loan in the amount of 
$80,000.
    13. In 1987, Mr. and Mrs. Flores sought assistance from FmHA to 
refinance their farm, because they were facing foreclosure by the 
Federal Land Bank. Mr. and Mrs. Flores needed to take advantage of the 
lower interest rate offered by FmHA, as opposed to the high 14% 
interest they were paying. When they asked the local FmHA agent about 
refinancing, he replied ``You're in a real mess,'' and refused them an 
opportunity to apply.
    14. Mr. and Mrs. Flores were discriminated against because they are 
Hispanic farmers. Similarly situated white farmers did not receive such 
treatment. In 1987, Mr. Flores complained regarding this discriminatory 
treatment.
    15. In 1988, Mr. Flores returned to the local FmHA office to 
attempt again to refinance his farm. Contrary to FmHA regulations, the 
local FmHA office agent refused to discuss refinancing with Mr. Flores 
until Mr. Flores father had cleared a separate unrelated debt with 
FmHA.
    16. 1988 was the last year the Flores family farmed. As a result of 
FmHA discrimination, they lost everything, including eight farm 
leases--all of which were taken over by white farmers.
          * * *
    17. Plaintiff and proposed Class representative Gloria Palacios 
Moralez is an Hispanic farmer and resident of Fresno County, 
California. Her parents were sharecroppers for 25 years, including when 
she was growing up; and she learned farming from them. She also took 
college courses in agricultural economics, and was selected to be a 
Kellogg fellow. She owned and operated an 80 acre farm from 1980 to 
1998. Up until 1994, she grew various field crops and grapes. In 1998, 
after repeatedly being denied loans and services from FSA, her land was 
sold by court order and she lost it.
    18. Ms. Moralez acquired her farm land in 1980 with a $200,000 
limited resource farm ownership loan from FmHA. However, even in this 
instance, FmHA engaged in discriminatory conduct against her by working 
hard to discourage her from getting the loan; she got it only through 
her own dogged persistence and hard work. Originally, FmHA would not 
even let her apply for the loan although she clearly had the background 
and training to qualify for FmHA farm financing. However, after she 
refused to take no for an answer, she was allowed to apply--but then 
only after she was forced to write a special essay and make special 
presentations to the Fresno County FmHA staff and county committee. 
These unusual requirements were never applied to white farmers who 
sought to apply to FmHA for farm ownership loans. Further, the chairman 
of the county committee told her to her face that farming was ``not a 
proper business for a woman, much less a Mexican woman with two kids.'' 
Once she filed her loan application, it was improperly rejected two 
times before it finally was accepted. One rejection was based on the 
premise that the property she was trying to acquire did not have 
sufficient water to farm it correctly. However, this same property was 
being farmed at that time by two white farmers whose farming operations 
were financed with FmHA operating loans. Another reason her application 
was initially rejected was that the FmHA county office asserted that 
she was proposing to pay too much for the land. However, at the same 
time, the county office was making farm ownership loans to white 
farmers to buy similar land in the area her farm was located at even 
higher prices than she proposed to pay.
    19. In 1981, Gloria Moralez applied to the Fresno County FmHA for 
an equipment loan of $50,000. She was approved for only $26,300. As a 
result, she could only acquire used equipment in poor condition that 
caused her severe problems in growing her crops and reduced her 
production. She also received an operating loan of $31,200 to plant 
cotton. Her loan funds were put in a supervised bank account. To her 
information and belief, no similarly situated white farmers in her area 
were subject to this sort of treatment regarding reduced funding for 
equipment loans and the supervised account. Further, the Fresno County 
FmHA staff told her at that time that she should never apply for 
another FmHA loan, because they would make sure she never got one. In 
fact, she never did get another FmHA loan.
    20. She continued throughout the years up to 1998 to seek FmHA and 
FSA loans, services, and benefits, but was always unfairly discouraged 
and ultimately denied. Her applications included ones for restructuring 
her debt, so-called ``1951-S'' servicing, and disaster payments. The 
1951-S servicing is an example of the unfair discouragement she 
received. FmHA valued her farm low for 1951-S purposes so she could not 
benefit from 1951-S restructuring; but just 6 months later when she was 
in bankruptcy, FmHA insisted that the farm had a much greater value for 
purposes of the bankruptcy action.
    21. In 1993, she applied for disaster payments for losses to her 
grape crop in 1993 caused by a grape disease known as phomophis. This 
disease reduced her yield by 69 percent. The Fresno county office told 
her that the[r]e was no such disease. However, this disease in fact has 
become epidemic in California in recent years and a threat to the grape 
industry statewide, with the state and Federal Governments spending 
millions on its eradication. Also, the county office accused her of 
fraudulently submitting two claims for payments on the loss. In fact, 
what happened was that she had submitted her disaster application in 
September 1993, then in December 1993 checked with the Fresno County 
FmHA to see where it stood. At that time, she was told that they could 
not locate the September application, and that she must fill out a 
second application, which she did. Further, when she appealed the 
denial of disaster benefits to the county committee, she attempted to 
have a court reporter transcribe the meeting. However, the county 
committee refused to allow the reporter to attend the meeting, stating 
that she had to give notice 7 days in advance. The problem was that 
they had scheduled the meeting 1 day in advance.
    22. As a result of FmHA/FSA's unfair discouragement and denials, 
Gloria Moralez could never obtain the financing or program payments she 
needed to adequately farm her land, and thus her farming enterprise 
foundered. When she became seriously ill and her mother died in January 
of 1992, Gloria Moralez was forced to file Chapter 12 bankruptcy. 
During the 5 years she was in bankruptcy, FmHA/FSA continued to harass 
her. The agency made several attempts to foreclose on her land even 
though the bankruptcy court had issued a stay on foreclosure 
proceedings. The agency had gone so far as to order its Kansas City 
financial office to cut a check for $220,000 so it could buy the land 
back at foreclosure, even though there was a freeze against 
foreclosure.
    23. She filed discrimination complaints with USDA in 1984, 1985, 
1986, 1987, 1988, 1989, 1990, 1992, 1993, and 1994 regarding the 
denials and problems she was having with FmHA/FSA, but only on one 
occasion received a response to her complaint--that regarding the 
denial of disaster payments in 1993 described above. However, even that 
action to respond to her complaints was tainted. First of all, she did 
not get a response to her complaint until 1998. At that time, she 
received a letter in response to her complaint purportedly signed by an 
official working for defendant by the name of Wardell Townsend. The 
letter stated that USDA found no discrimination. The problem with the 
letter was that Townsend, who supposedly made this conclusion, had left 
USDA about 1 year prior to the date he supposedly signed the letter.
    24. The long and persistent pattern of denial of loans and services 
by FmHA/FSA during the period from 1981 on--treatment different than 
that the agency gave to similarly situated white farmers--was a series 
of willful and continuous racial/ethic discrimination; and as a result 
of the discrimination, Morelez's farm operation suffered severe 
economic losses and she ultimately lost her 80 acre farm. The absolute 
refusal by defendant to respond to her repeated complaints of 
discrimination caused her further damage as the complaints were never 
investigated and the wrongs committed against her thus have remained 
un-remedied.
          * * *
    25. Plaintiff and proposed Class representatives Rodolfo and 
Beatrice Garza are Hispanic Americans residents of Zapala County, 
Texas, who farmed in the 1980s. Rodolfo Garza had been trained in 
agriculture at the local junior college, and, in 1983, he and Beatrice 
Garza acquired 39 acres of farm land in Zapala County from Beatrice's 
parents for the purpose of starting a vegetable production operation. 
This land is located in the Wintergarden area of Texas, which is renown 
for its production of fruits and vegetables. Their hometown, Crystal 
City, is known as the Spinach Capital of the World. Unable to get FSA 
financing to operate their farm, they farmed to the extent they could 
using their personal funds. They successfully put in several crops of 
spinach, onions, and grain sorghum.
    26. In 1984 and 1986, the local newspaper ran articles about the 
availability, at the local FSA office, of loan funds for farming. In 
1984, the Garzas sought a loan to irrigate and put in crops on all 39 
acres. They submitted an application to the local FSA office, and 
waited for a response. FSA never responded, so Beatrice Garza contacted 
the office and was told that no money was available for loans. However, 
when she reminded the office of the article in the local newspaper, 
they simply told her that she and her husband did not qualify. Again in 
1986, having read another article about the availability of funds, the 
Garzas applied for an operating loan again. They were turned down 
again. The Garzas knew that a number of white farmers who were friends 
of theirs and similarly situated farmers were able to obtain operating 
loans from FSA without any trouble. These included Charles Carr, Lake 
Smith, and Dorothy Hodges. In fact, these farmers advised the Garzas to 
apply to FSA for financing.
    27. Concerned about these repeated denials, Beatrice Garza timely 
complained by letter to the Secretary of Agriculture in 1986, but never 
received even a response to the letter. Having been frustrated at 
obtaining financing from FSA and unable to finance the farm through 
local cooperative or commercial banks, the Garzas had to abandon their 
farm operation and sell the land. As a result of the discriminatory 
acts, the Garzas have suffered substantial economic losses and as a 
result of the Secretary of Agriculture ignoring their complaint about 
the loan denials, the Garzas suffered further damages.
          * * *
    28. Plaintiff and proposed Class representatives Larry and Robert 
Chavarria are third-generation Hispanic American farmers in Kings 
County, California. They have been farming for 17 years. They primarily 
grow crops on the family farm owned by their mother. It is a 640 acre 
tract with irrigation that is ideally suited for cotton and other row 
crops, as well as fruits and vegetables. Their grandfather cleared the 
land in 1944, and their family over the course of years has installed 
irrigation equipment on the land. They farm together as a general 
partnership, the Chavarria Farm Co. Neither Larry, Robert, nor the 
partnership had any dealings with FSA prior to 1997.
    29. In 1995, the partnership suffered severe losses to their cotton 
crop, as did many other farmers in that area of California. The area 
was declared a disaster area and the Chavarrias sought to obtain a 
disaster loan from FSA to cover losses from the 1995 crop. Larry began 
his inquiries in September 1996, and filed the application in January 
1997. Although the application was complete and demonstrated that the 
Chavarrias and the partnership fully qualified for assistance, the 
Kings County FSA improperly rejected the application on grounds that 
were later determined by the National Appeal Division (``NAD'') to be 
without merit. In doing so, the FSA office gave excess credence to the 
assertions of a white landowner from whom the Chavarrias were leasing 
farm land and with whom the Chavarrias had a dispute regarding the 
white landowner's efforts to revoke the lease.
    30. Larry Chavarria appealed the county office decision to the NAD 
and won the appeal. The hearing officer's decision substantially 
discounted the credibility of the white land owner and questioned the 
county office's giving weight to that person's assertions and the 
county office's abortive efforts to set Mr. Chavarria in a ``sting'' 
regarding the crops grown on the disputed lease land.
    31. Even though Larry Chavarria won the appeal, the Kings and 
Tulane County FSA office continued to subject him and the partnership 
to unfair treatment. That office has denied them Production Flexibility 
Contract payments for the 1997 crops; it has been uncooperative and 
unwilling to work with him on servicing the emergency loan following a 
second disaster in the area in 1998.
    32. FSA's initial loan denial and inadequate loan servicing were 
treatment different than that the agency gave to similarly situated 
white farmers, and amounted to willful and continuous racial/ethnic 
discrimination. As a result of the discrimination, the Chavarria farm 
operation suffered substantial economic losses.
    33. Larry Chavarria filed a complaint with the Office of Civil 
Rights (``OCR'') regarding this discrimination in 1999. Incredibly, the 
OCR responded that FSA's denial of the loan and related unfair acts did 
not raise an issue of discriminatory conduct by a USDA employee, so it 
was refusing to investigate the complaint. Further, the response letter 
was dated April 28, 2000, but was not postmarked until September 12, 
2000. The refusal by defendant's agency to respond to the complaint of 
discrimination caused Larry and Robert Chavarria and the partnership 
further damage as the complaint was never investigated and the wrongs 
committed against them thus have remained un-remedied.
          * * *
    34. Plaintiff and proposed Class representative Rigoberto Banuelos 
has been farming in the Fresno, California vicinity since 1988. He 
acquired a 10 acre parcel in January 1986 and another 20 acre parcel in 
May 1988. Mr. Banuelos grows seedless grapes that are used to make 
raisins.
    35. In 1988, 1991, and 1992, he went to the Fresno, California FmHA 
office to inquire into applying for loan assistance. On each visit Mr. 
Banuelos was told that there was no money available and that no one in 
the Fresno office spoke Spanish so they could not talk to him. Although 
Mr. Banuelos informed the FmHA officials that his wife, who accompanied 
him on each visit, spoke English well, he was ignored. He never 
received an application and was told to try private banks because FmHA 
could not help him.
    36. Although Mr. Banuelos repeatedly complained that FmHA did not 
treat him as fairly as they treated white farmers, he was not able to 
secure a loan from FmHA. Consequently, he was unable to install a new 
irrigation system on his farm that would have doubled his productivity.
          * * *
    37. Plaintiffs and proposed Class representatives Modesto 
Rodriguez, Ruperto Rodriguez and Modesta Salazar are shareholders of 
Rodriguez Brothers Inc (``RBI''). RBI is a family owned farm of 523 
acres located outside of Pearsall, TX. The Rodriguez family has owned 
the farm since 1952. From 1982 to 1997, Modesto Rodriguez was the 
principal operator of the farm.
    38. During the time period covered by the complaint, RBI borrowed 
funds from the Frio County FmHA office. Many, if not most, of the loans 
made to RBI were required to be placed in SBAs despite many years of 
farming experience. In 1989, RBI submitted a written complaint alleging 
that FmHA and its Frio County supervisor discriminating against RBI by, 
among other things, imposing SBAs on RBI and USDA's failure to release 
SBA funds to permit RBI to feed its livestock during a drought.
    39. In that same year, RBI also sought primary loan servicing. Nine 
months later its application was denied. RBI appealed the adverse 
decision and the NAD hearing officer ruled that the county supervisor 
had acted improperly in denying the loan application and that RBI was 
entitled to a loan and loan servicing. The hearing officer also found 
that the continued use of SBAs was not appropriate and reversed FmHA's 
decision to impose a SBA. Despite the favorable ruling by the NAD 
hearing officer on behalf of RBI, USDA, more than a decade later, has 
yet to provide the required loan servicing to RBI to which it was 
declared to be entitled.
          * * *
    40. Defendant, Michael Johanns, is Secretary of the United States 
Department of Agriculture, and is the Federal official responsible for 
the administration of the statutes, regulations and programs that are 
the focus of this action.
V. General Background: The USDA Farm Loan and Benefit Programs and How 
        They Are Administered
A. Brief Description of the Programs and How USDA Implemented Them
    41. The Federal agricultural programs at issue in this litigation 
have their genesis in the New Deal agriculture reform legislation aimed 
at controlling farm production, stabilizing farm income and generally 
helping farmers remain operational to the extent possible. In enacting 
this legislation, Congress recognized that the maintenance of a diverse 
domestic base of producers of food and fiber--particularly family farms 
and ranches--was a matter of national security.
    42. Congress provided for the creation of the Agricultural 
Stabilization and Conservation Service (``ASCS'') as the division of 
USDA charged with the responsibility for administering these programs. 
The basic approach to stabilizing farm income and commodity prices was 
to allow farmers to borrow against their crops and, if prices remained 
low, the crops would be forfeited to USDA with farmers receiving a high 
enough support price to permit them to pay off their crop loans and to 
keep enough money to remain economically viable. The ASCS was 
responsible for managing the commodities forfeited to USDA, to purchase 
other commodities as part of an effort to raise prices and to inspect 
the warehouses in which the commodities were stored. The amount of 
funds available to farmers in these programs and the manner in which 
the programs are to be administered are periodically modified by 
Congress with each new farm bill.
    43. Because Congress wanted to maximize the input of local farmer 
interests in order to ensure that the administration of the ASCS 
programs truly reflected local needs, it established a decentralized 
network of county committees (``COC'') each composed of three county 
farmers elected by the farmers from each county. Each COC hired both 
the county supervisor who actually ran the county office as well as the 
local staff who administered the distribution of such payments in each 
county. The legislation also provided for a state level committee and a 
state executive director. Each COC determined which farmers were 
eligible for support and benefit payments and worked with the state 
committee and its director to calculate the amount each farmer was 
entitled to. Although the Secretary of Agriculture, with presidential 
approval, technically appoints the state executive director and the 
state ASCS committee members, the tradition is that the senior member 
of each state's congressional delegation who is of the same political 
party as the President actually controls the selection process. The 
county committee, the county supervisor and the county staff are state 
or county employees whose salaries and benefits are paid from Federal 
funds appropriated as part of the USDA budget. Despite this fact, the 
Secretary of Agriculture and the Washington headquarters staff have 
never effectively managed the state and county offices.
    44. In addition to ASCS, the New Deal reforms enacted by Congress 
created three additional farm agencies. The FmHA which loaned money to 
farmers who could not obtain credit elsewhere for land purchases, 
operating expenses and construction of homes on their farms, and also 
provided technical assistance and (unlike traditional lenders) worked 
closely with farmers in an effort to help them survive. These loans 
include ``farm ownership,'' ``operating,'' and ``continuing 
assistance'' loans, as well as loans that restructure existing loans 
and ``emergency disaster'' loans. Congress specifically designed such 
programs to provide assistance to those family farms, particularly 
small, minority and otherwise disadvantaged farmers who typically 
cannot secure loans from private lenders. FmHA thus became the lender 
of last resort.
    45. In creating FmHA, Congress established a separate, stand-alone 
FmHA county committee system which in most important respects 
paralleled the above-described ASCS county committee network. In each 
state, there was a politically appointed FmHA director, and he (unlike 
ASCS) appointed local county FmHA committees whose functions were to 
initially determine eligibility for loans and then to review 
recommendations by the county FmHA offices regarding which loan 
applications should be approved. The county FmHA offices, unlike ASCS, 
were staffed by Federal employees of USDA.
    46. The Soil Conservation Service (``SCS'') was created to assist 
farmers in improving and maintaining the productivity of their land. 
Finally, Congress established the Federal Crop Insurance Corporation 
(``FCIC'') to manage the federally subsidized crop insurance programs.
    47. As a consequence of the way Congress structured the mechanisms 
for administering these farm programs, USDA became a decentralized 
institution that placed broad, largely unfettered discretion in local 
officials to apply highly subjective eligibility criteria to farmers 
seeking to participate in USDA credit and benefit programs. 
Historically, USDA has permitted each of the core farm loan and benefit 
agencies within USDA to function essentially as uncoordinated and 
independent agencies, each with its own distinct policies, procedures 
and record keeping requirements and its own separate network of county 
committees. Given the vast sums of taxpayer dollars channeled into farm 
loan and benefits programs via the USDA--until recently it ranked 
second only to the Department of Defense in the total amount of Federal 
dollars appropriated to it--the virtual lack of true transparency and 
meaningful accountability which has long characterized USDA stewardship 
of such monies is unprecedented.
    48. Numerous congressional oversight efforts, GAO studies and other 
reports--all uniformly critical of the manner in which USDA 
administered the farm loan and benefit programs--prompted Congress in 
1994 to fundamentally reorganize USDA. In the fall of 1994 ASCS and 
FCIC were merged to form a new FSA, and the FmHA was split in two with 
its farm loan division folded into FSA and its home and business loan 
division absorbed by a newly created Rural Development Agency 
(``RDA'').
    49. The attempt to merge FmHA's farm loan division with the myriad 
ASCS farm programs has proven to be extraordinarily difficult because 
the policies, procedures and particularly the ``culture'' of each 
agency were so distinct. The overriding problem is that FmHA employees 
were direct employees of the Federal Government operating within 
policies, procedures and record keeping systems promulgated by USDA 
headquarters to a much greater extent than ASCS, whereas the members 
and staff of the ASCS county committees were employees operating 
outside the Federal employee structure in a decentralized manner 
notwithstanding that Federal funding underwrote their salaries. 
Additionally, the orientation of each agency and its distinct COC 
network was markedly different, e.g., ASCS distributed subsidies and 
disaster payments which generally do not have to be repaid, whereas 
FmHA made loans which had to be repaid.
    50. Because the parallel decentralized county committee networks 
which traditionally played a substantial role in the administration of 
both ASCS benefit programs and FmHA loan programs was obviously 
unworkable in the revamped system, it was incumbent upon the Secretary 
to blend the two networks. It wasn't until the late 1990s that the 
Secretary decided to make the ASCS COC network preeminent, causing the 
FmHA network to atrophy. Although progress has been made in merging 
these disparate entities, in many areas the intramural tensions and 
resulting dysfunction remain problematic because of resistance of FmHA 
employees to accept county employees as coequal colleagues and because 
the ASCS county employees feared federalization.
    51. The current structure is that in each state the Secretary 
appoints a state FSA director who is a political appointee anointed by 
state political apparatus. Thus, in point of fact the state FSA 
director is often more beholden to his political benefactors within the 
state than to the Secretary. Furthermore, the surviving county 
committee system, along with state director and state committee, 
created by Congress, continues to exist and function notwithstanding 
the absorption of ASCS by FSA, thereby perpetuating the conflicts and 
confusion which plagues the administration of these farm programs.
B. An Overview of the Process By Which FSA Administers Farm Loan and 
        Benefit Programs
    52. Generally speaking, the process begins when the Congress 
annually appropriates specific amounts of taxpayer dollars to fund the 
various farm loan programs. The Secretary of USDA then allocates a 
specific portion of those funds to each local FSA office for 
distribution to eligible farmers and ranchers. Should a particular 
local office not commit all the funds allocated to it for a particular 
program, those funds are transmitted back to the Secretary for 
reallocation to those county offices which need them.
    53. Virtually every farmer has to borrow the money needed to 
finance the next season's crops--the cost of seed, fertilizer, 
additional equipment or land. Crop and equipment loans are very time 
sensitive--the application needs to be approved and the loan made in 
advance of the upcoming planting season.
    54. Many farmers are able to secure the necessary financing from 
private lenders. For new farmers and those whose financial condition 
fails to meet the standards set by private lenders, the lender of last 
resort is USDA which offers both direct loans and guaranteed loans (the 
loan is made via a commercial bank on the USDA approved list and USDA 
guarantees it).
    55. The first step in the process of securing a USDA farm loan is 
for the farmer to visit the county FSA office to obtain a copy of the 
loan application form.
    56. The next step is for the farmer to fill out the loan 
application and to prepare a Farm and Home Plan which essentially is a 
financial (cash flow) plan for his farming operation. As noted, the 
regulations created by USDA (7 CFR  1901 et seq.) to govern the loan 
program are enormously detailed and complex. As a consequence, most 
farmers need considerable assistance to fully and appropriately 
complete the complex application paperwork, particularly the Farm and 
Home Plan, which is central to the application. In recognition of this, 
USDA regulations direct local FSA loan officers and their staff to 
provide assistance--particularly to family farmers--in their efforts to 
secure the financing necessary to remain operational. Increasingly, 
those farmers who can afford to do so hire third party ``loan 
packagers'' to guide them through the application process. In sum, in 
order for the USDA loan program to accomplish its goal of helping those 
farmers most in need, it is obviously imperative that a spirit of 
cooperation and understanding exist between the farmer and the local 
FSA personnel.
    57. Once all the necessary paperwork is completed to the 
satisfaction of the local county FSA loan officer, the application is 
formally deemed submitted and the review approval process technically 
begins to run. The FSA loan officer reviews the file and makes a 
recommendation which he transmits to the COC for approval. Once 
approved, the file is sent back to the FSA loan officer who executes 
the formal loan documents and arranges for the transmittal of funds to 
the farmer.
    58. Prior to the 1994 reorganization the farm loan application/
approval process was all handled within the FmHA, with the county 
committee making the threshold determination regarding eligibility and 
then, if the applicant is deemed eligible, with the county director 
deciding both whether the paperwork was properly completed and 
ultimately whether to approve the application. Then the county 
committee staff would administer the loan and provide any necessary 
servicing.
    59. Should an applicant be unhappy with the decision, he has the 
right to appeal the decision to the state FmHA committee and, if still 
unsatisfied, can seek administrative review via the National Appeals 
Division (``NAD'') which is headquartered at USDA headquarters in 
Washington and maintains a network of regional and state offices.
    60. Additionally, the Equal Credit Opportunity Act (``ECOA'') 
prohibits discrimination in credit based on sex, marital status, race, 
color, age, national origin, or religion. 15 U.S.C.  1691(a). If an 
FSA loan or loan service is denied on discriminatory grounds, the 
farmer can file a discrimination complaint with the defendant and the 
FSA Civil Rights Office (for FmHA, formerly the Equal Opportunity 
(``EO'') office) or with the Office of Civil Rights (``OCR'') (formerly 
known as the Office of Civil Rights Enforcement and Adjudication 
(``OCREA'' or ``CREA'')).
    61. As regards benefit payments, Congress must first appropriate 
funds earmarked for disaster (freeze; flood; drought; hurricane[,] 
etc.) relief. Then the funds are allocated to the affected states for 
distribution to eligible farmers. Prior to the 1994 reorganization a 
farmer had to visit the local ASCS county office to ascertain whether 
such funds had been allocated to that county, how many funds remained 
available and whether the farmer qualified for such payments. The 
process is administered pursuant to ASCS regulations (7 CFR part 700, 
et seq. and Commodity Credit Corporation (``CCC'') regulations (7 CFR 
part 1400 et seq.). The ASCS county staff was the initial point of 
contact and aided the county supervisor in making recommendations to 
the ASCS county committee as regards eligibility and the amount of 
benefits to be paid to each farmer. Approval by the county committee 
was the key. Those not receiving a favorable response had the right to 
appeal to the state committee. Post reorganization, farmers denied 
benefits continue to have a right of appeal but such appeals are 
rechanneled via FSA's NAD. Additionally, the Constitution and Title VI 
of the Civil Rights Act of 1964 prohibit exclusion from participation 
in Federal programs based on race, color or national origin. With 
respect to ASCS-type applications, if a farm program application is 
denied on discriminatory grounds, the farmer can file a complaint of 
discrimination with the defendant or OCR.
    62. Post reorganization the functions of the ASCS county office 
have been consolidated with the local FSA office, although many of the 
county staffers still work there. The allocation of disaster funds 
available to the affected counties is made at the Federal and state 
levels, but the determinations regarding eligibility (including 
inspections of the damage) and the distribution of the funds is carried 
out at the local FSA level after the county committee formally approves 
recommendations by the local FSA office regarding eligibility and 
distribution amounts.
VI. Systemic Discrimination Against Hispanic Farmers Has Pervaded the 
        Administration of Farm Loan and Benefit Programs By USDA from 
        1981 To Date
A. The Various Ways In Which Hispanic Farmers and Ranchers Experienced 
        Discrimination When They Sought Farm Loans and Benefits
    63. At the outset it must be emphasized that historically those 
areas of the United States where there was a substantial Hispanic 
population, Hispanics experienced systemic de jure and de facto 
discrimination not unlike that experienced by Blacks in other parts of 
the country. And, USDA's decentralized administration of credit and 
benefit programs gave full vent to those regional and local prejudices.
    64. In addition, for those Hispanic farmers who are not conversant 
with the finer points of written English the application forms and the 
extensive directions explaining how to fill them out, which until 
recently were available only in English, were daunting obstacles. These 
obstacles were made all the more daunting to some Hispanic farmers 
because most local FSA offices, and virtually all of the county 
committees and county offices, lacked personnel sufficiently 
[conversant] in Spanish to provide the desperately needed guidance. 
Even more fundamentally, the putative class has encountered a wall of 
hostility, manifested in variety of ways, from the staff of such 
offices. Thus, the Congressional mandate that the local FSA and county 
offices work closely and helpfully with all applicants has consistently 
fallen on deaf ears in both those decentralized USDA outposts serving 
areas with heavy Hispanic farm constituencies and USDA headquarters 
which is primarily charged with carrying out that mandate.
    65. Such local offices are dominated by white males who mirrored 
the anti-Hispanic prejudices which permeated those areas of the country 
and, to a large extent, continue to do so. There was and continues to 
be hostility toward Hispanics in many of these county and state 
offices. That hostility manifests itself in a variety of ways, 
including attempting to discourage Hispanic farmers from availing 
themselves of farm credit and non-credit benefit programs.
    66. Hostility and discouragement pervade every stage of the credit 
or benefit process. Starting with obtaining an application, the 
Hispanic farmers are often discouraged from even obtaining an 
application. Indeed, it is common for Hispanic farmers to be told that 
they are too late because all the loan and/or benefit monies are gone, 
hence it was pointless to provide an application to them. Consequently, 
a number of Hispanic farmers simply gave up and went home without an 
application when so informed. Those Hispanic farmers who nevertheless 
pressed for a copy of an application form were often refused a form 
because office personnel told the farmers that they either were too 
late or the office did not have applications, only to discover that 
white farmers not only still received applications but succeeded in 
obtaining loan or benefits notwithstanding that the funds allegedly had 
already been spent or the supply of applications already exhausted.
    67. None of the county offices or FSA offices employed any type of 
``receipt for service'' system which recorded the fact that Hispanic 
(or any other) farmers visited the office to inquire about programs 
availability. Thus, there is no transparency as regards conduct in this 
crucial aspect of program administration.
    68. Similarly, many Hispanic farmers were advised during their 
initial visit that they did not qualify for either loans or benefits--
this without any application having even been filled out. Such tactics 
repeatedly occurred notwithstanding that the regulations promulgated 
pursuant to the ECOA and USDA's own regulations proscribe efforts to 
discourage minority farmers from applying for loans. 7 CFR  1910.
    69. Those Hispanics who succeeded in obtaining the application 
forms were often denied the assistance needed to both comprehend and 
properly complete the application. They would be told that the 
applications was self-explanatory, and should be completed by the 
farmer at home. Hispanic farmers who nevertheless requested help in 
completing the application were often made to feel stupid for 
requesting assistance and told that the office personnel did not have 
time to assist them. In some instances, they were urged to retain the 
services of expensive loan packagers, which few could afford to do.
    70. Those Hispanic farmers who persisted and completed the 
application then had to successfully navigate a two-step process. 
First, the applicant had to demonstrate that he or she was eligible to 
receive either a loan or whatever form of benefits (usually disaster 
benefits) he or she sought. The second step is securing approval of the 
application itself. For most of the period covered by this complaint, 
the county committee made this critically important eligibility 
determination--the FmHA county committee for loans and the ASCS county 
committee for benefits and, post the 1994 reorganization, the FSA 
county committee for both loans and benefits. This localized decision 
making structure was, from the perspective of Hispanics, fatally flawed 
in two crucial respects.
    71. First, the county committees were dominated by local white male 
farmers in what can best be described as a closed system. The Civil 
Rights Action Team (``CRAT''), a group of senior USDA officials 
appointed in 1996 by then Secretary Glickman to conduct a comprehensive 
investigation of alleged systemic discriminatory conduct by USDA, 
reported that:

          In 1994, 94 percent of all county committees had no female or 
        minority representation. Minority producers were 4.7 percent of 
        eligible voters, but held only 2.9 percent of county committee 
        seats. . . . GAO found that in 1995, only 36 of the 101 
        counties with the largest concentration of minority farmers had 
        at least one minority county committee member. CRAT Report at 
        p. 3.

    72. Thus, in those counties with the largest concentration of 
Hispanic farmers, the county committees are populated virtually 
exclusively by non-Hispanics who invariably reflect regional and local 
anti-Hispanic prejudices. Compounding the problem is the obvious 
conflict of interest which lies at the core of this localized 
administrative process--e.g., the dominant group of farmers (white non-
Hispanic males) controls the distribution of monies for which they 
themselves also compete. The playing field is clearly not level.
    73. The second major defect in the USDA system is the unfettered 
discretion vested in the county committees in applying the highly 
subjective criteria governing the USDA credit and benefit programs. 
This combination of anti-Hispanic bias and unfettered discretion 
invites and facilitates discrimination.
    74. For example, in administering USDA loan programs, the county 
committee was, for most of the period covered by the complaint, 
required to consider seven criteria: (1) United States citizenship; (2) 
the legal capacity to incur loan obligations; (3) education and/or 
farming experience in managing and operating a farm or ranch; (4) 
character and industry to carry out the proposed operation; (5) a 
commitment to carry out undertakings and obligations; (6) inability to 
obtain sufficient credit elsewhere; and (7) farm size (the farm to be 
no larger than a family farm). Once eligibility was determined, the 
county executive director or loan officer had to approve the loan by 
determining, inter alia, whether the farmer had a viable farm and home 
plan. All the criteria except citizenship and age are highly subjective 
and thus easily subverted by persons practicing discrimination.
    75. Similarly, in administering the disaster benefit and other 
benefit programs, the county committees are vested with broad 
discretion in determining which farmers are eligible to receive 
benefits. The criteria used are also highly subjective. For example, 
the farmer applicant must establish that his disaster related loss 
isn't related to ``the neglect or malfeasance of the producer `. . . or 
. . .' the failure of the producer to follow good farming practices for 
the commodity and practice.'' 7 CFR  1437.9(b)(1) and (3). Terms such 
as ``neglect'' and ``good farming practices'' can easily be applied in 
a subjective, discriminatory and arbitrary manner and given the 
generalized language in which such decisions are phrased, adverse 
decisions are difficult to reverse on appeal. The county committees 
readily understand all this.
    76. The regulations promulgated by USDA to govern the 
administration of its farm loan and benefit programs have not only 
failed to prevent the discrimination experienced by Hispanic farmers, 
but have in fact contributed to and facilitated that discrimination by 
vesting in local official unfettered discretion to apply highly 
subjective eligibility criteria. Despite repeated warnings that the 
combination of unfettered discretion and highly subjective eligibility 
criteria invites and facilitates discrimination, USDA has done nothing 
to curtail the delegated discretion or to reduce the subjectivity in 
the eligibility criteria.
    77. The record keeping procedures maintained by the county 
committees and the local and state USDA offices are grossly inadequate 
to reveal the true nature and extent of anti-Hispanic discrimination, 
which has long pervaded the administration of its farm loan and benefit 
programs. Despite the fact that this historic inadequacy has been well 
documented throughout the entire period covered by this complaint and 
indeed from at least the mid 1960s, USDA has done nothing to improve 
its record keeping in a way that would bring transparency to its 
lending practices. Thus the farm loan and benefit programs suffer from 
a total lack of transparency regarding the actions at the county and 
state levels where the discrimination has taken root. Without 
transparency there obviously is no accountability, hence the 
intractability of the discrimination which has long infected USDA.
    78. As early as 1982 the Civil Rights Commission reported its 
findings regarding USDA's discrimination against minorities, noting 
that as the lender of last resort, the USDA applied primarily 
subjective criteria. The report noted that: ``[the] regulations 
intended to implement these goals leave room for a wide range of 
subjective implementation. . . . The problem of subjectivity permeates 
much of the FmHA loan decision process. . . . Lack of specific criteria 
for loan determinations potentially enhances FmHA's flexibility and 
ability to serve clients. It also creates loopholes which allow for 
discriminatory treatment.'' United States Commission on Civil Rights, 
The Decline of Black Farming In America, pp. 80-81 (1982).
    79. The various consequences of the decades of discrimination 
practiced by USDA against Hispanic farmers in the administration of its 
farm loan and benefit programs are:

  (a)  many Hispanics abandoned their intention to apply for a loan 
            because USDA erroneously asserted that all the loan funds 
            had already been allocated or because the USDA officials 
            refused to provide loan application materials;

  (b)  information about availability of disaster payments or other 
            benefit programs was either not communicated effectively to 
            Hispanics at all or too late for them to apply;

  (c)  as regards both loan and benefit programs, Hispanics typically 
            experienced hostility, lack of civility, no cooperation or 
            an unwillingness to provide assistance or information at 
            all stages of the application process;

  (d)  USDA personnel exercised unfettered discretion discriminatorily 
            to declare Hispanics ineligible to obtain loans or to 
            receive benefits;

  (e)  USDA personnel exercised unfettered discretion discriminatorily 
            to deny approval of loans or payments of benefits to 
            Hispanics deemed eligible to apply for loans or benefit 
            payments;

  (f)  in those instances in which defendant approved loans or benefit 
            payments to Hispanics, approvals were often untimely (well 
            after the planting season began) and/or for amounts much 
            less than requested;

  (g)  defendant often demanded that Hispanics provide a greater amount 
            of collateral for loans than would otherwise be required 
            thereby exposing Hispanics to far greater risk;

  (h)  defendant often conditioned its approval of a loan to Hispanics 
            upon a willingness to accept a supervised loan account 
            which required Hispanics to periodically submit to a 
            monitoring of their farming operations by the local FSA 
            office as a condition to receiving each incremental release 
            of previously approved loan funds, which is both burdensome 
            and insulting;

  (i)  should Hispanics experience difficulty in making loan payments 
            (as all farmers and rancher periodically do given the 
            inherent vicissitudes of nature and commodity markets), 
            defendant failed to provide loan servicing and to otherwise 
            work closely and cooperatively as required by law and 
            regulation in an effort to avoid foreclosure; and

  (j)  defendant invariably accelerated the foreclosure process when 
            Hispanics experienced repayment difficulties.

    80. Non-Hispanics, particularly white males, experienced the above 
described problems to a much lesser extent, if at all, than did 
Hispanics because they did not experience similarly discriminatory 
policies, procedures and attitudes by defendant.
B. The Anti-Hispanic Discrimination Which Pervades USDA Makes It 
        Virtually Impossible for Plaintiffs To Secure Redress Through 
        the USDA Appeals Processes
    81. Applicants denied loans or benefits can pursue administrative 
appeals. Prior to the 1994 consolidation, FmHA and the ASCS each 
operated parallel but separate administrative appeals processes. 
Thereafter the NAD was created to handle all such appeals, but NAD had 
no authority to consider discrimination complaints.
    82. When a Hispanic farmer appealed an adverse decision to the NAD 
and prevailed, often the loan supervisor and county committee would 
simply refuse to implement the NAD decision and purport to undertake a 
complete review of the application, often requiring the submission of 
new information because the application was by then more than 90 days 
old. Notwithstanding the favorable decision by the NAD with respect to 
the appeal, the local officials frequently rejected the revised or 
reviewed application, thereby forcing the farmer to either undertake 
yet another appeal or give up.
    83. Because there has long been a recognition that discrimination 
pervades the administration of USDA farm loan and benefit programs, 
USDA permits applicants to file a complaint of discrimination either 
with FSA Civil Rights Office (formerly the FmHA Equal Opportunity 
Office) or with Departmental Office of Civil Rights (``OCR'') (formerly 
designated as the Office of Civil Rights Enforcement and Adjudication) 
(``OCREA'').
    84. In 1983, the enforcement capability of EO and OCREA was so 
severely curtailed through lack of funding and lack of interest that 
USDA essentially had no capability to investigate civil rights 
complaints. This development was not publicized, so plaintiffs, 
putative class members and other minorities continued in good faith to 
file discrimination complaints not knowing that the investigative 
staffs had been disbanded and that the complaints were ignored. This 
constituted a willful failure by USDA to investigate discrimination in 
violation of the 1964 Civil Rights Act and the ECOA that continued at 
least until the mid-1990s.
    85. USDA's refusal to eliminate discrimination from the 
administration of its programs and its unwillingness to recognize and 
endorse the civil rights of Hispanic and other minority farmers have 
been widely known, discussed and condemned at least since the mid-
1960s. Detailed findings demonstrating the pervasiveness of the abuses 
and the immediate need for meaningful reform are contained in internal 
reports by USDA's CRAT and a series of subsequent progress reports by 
USDA's Office of Inspector General to then Secretary Glickman and 
issued in 1997, and reports by GAO, the Civil Rights Commission and 
various congressional oversight committees.
    86. USDA's blatant disregard of the requirements of ECOA and the 
1964 Civil Rights Act--particularly the effective dismantling of the 
OCR--prompted Congress to enact special legislation in 1998 ( 741 of 
the Omnibus Consolidated Appropriation's Act for Fiscal Year 1999) 
which waived, inter alia, the ECOA's statute of limitations applicable 
to claims regarding farm credit arising between January 1, 1981 and 
December 31, 1996.
    87. USDA has codified regulations, 7 CFR Part 15--
``Nondiscrimination,'' which state USDA's ostensible policy of 
nondiscrimination in federally assisted and conducted programs in 
compliance with Title VI of the Civil Rights Act of 1964. The 
regulations should have served as a basis for civil rights compliance 
and enforcement with respect to participants in FSA programs; however, 
USDA admitted that the regulations have long been outdated and never 
accurately reflected the Department's agencies, programs and laws. See 
OIG Report at 5.
    88. The February 27, 1997 OIG Report addressed complaints of 
discrimination within FSA as well as ten other USDA agencies. OIG 
found, inter alia, that the FSA's discrimination complaint process 
lacked integrity and accountability, had no effective tracking system, 
had no process for reconciliation, was in disorder, failed to resolve 
discrimination complaints, and had a massive backlog. OIG found that 
the FSA staff responsible for processing the discrimination complaints 
consisted of two untrained and unqualified people. Hundreds of 
unresolved complaints were over a decade old. OIG found no management 
oversight within FSA with respect to the handling of civil rights 
complaints.
    89. At the same time that OIG released its report, the USDA CRAT 
Report was released, condemning USDA's lack of civil rights enforcement 
and accountability as a cause of the drastic decline in the number of 
minority farmers.
    90. In the CRAT Report, the USDA described the pattern and practice 
of disparate treatment experienced by minority and limited resource 
farmers applying to USDA for loans:

          The minority or limited-resource farmer tries to apply for a 
        farm-operating loan through the FSA county office well in 
        advance of planting season. The FSA county office might claim 
        to have no applications available and ask the farmer to return 
        later. Upon returning the farmer might receive an application 
        without any assistance in completing it, then be asked 
        repeatedly to correct mistakes or complete oversight in the 
        loan application. Often those requests for correcting the 
        application could be stretched for months, since they would 
        come only if the minority farmer contacted the office to check 
        ``on the loan processing.'' By the time processing is 
        completed, even when the loan is approved, planting season has 
        already passed and the farmer either has not been able to plant 
        at all, or has obtained limited credit on the strength of an 
        expected FSA loan to plant a small crop, usually without the 
        fertilizer and other supplies necessary for the best yields. 
        The farmer's profit is then reduced. CRAT Report at 15 
        (emphasis added).

    91. USDA admitted in the CRAT Report that (a) discrimination 
complaints at USDA were often ignored, and

  (a)  that farmers reported that even when there was a finding of 
            discrimination, USDA refused to pay damages. CRAT Report at 
            22-23;

  (b)  its record keeping on discrimination complaints was ``non-
            existent,'' that a backlog existed, and that the largest 
            number of complaints against a single USDA sub-agency was 
            against FSA. CRAT Report at 24-25; and

  (c)  a lack of diversity in FSA county offices combined with a lack 
            of outreach to small and limited-resource farmers to 
            directly and adversely affects that participation of 
            Hispanics and other minorities in USDA programs (CRAT 
            Report at 26-27), as well as program delivery to minorities 
            and women. CRAT Report at 45.

    92. USDA admitted that cultural insensitivity interferes with 
Hispanic participation:

          Customers at the recent listening sessions reiterated the 
        special needs of different minority and socially disadvantaged 
        communities. All communities agreed that they are overlooked 
        when information is released about available USDA programs. 
        USDA agencies do not make use of minority community 
        organizational and media outlets to be sure all eligible 
        participants know about their programs. Cultural barriers 
        prevent the communication necessary for good service by USDA 
        programs.
          Young men and women who want to follow in the family 
        footsteps, either by taking over the family farm or by buying 
        their own, oftentimes find it difficult to obtain financing for 
        their ventures. According to several speakers at the listening 
        sessions, FSA has denied loans to new or beginning farmers 
        despite years of working on their family farm or receiving 
        advanced degrees in agriculture. CRAT Report at 27.

    93. In sum, USDA admitted that USDA does not support or enforce 
civil rights:

          USDA does not have the structure in place to support an 
        effective civil rights program. The Assistant Secretary for 
        Administration lacks authority and resources essential to 
        ensure accountability among senior management ranks. There has 
        been instability and lack of skilled leadership at the position 
        of USDA Director of Civil Rights. Dividing up the Department's 
        Civil Rights office between policy and complaints has further 
        exacerbated the problem. The division of responsibility for 
        civil rights among different USDA offices and agencies has left 
        confusion over enforcement responsibilities. Finally, OGC is 
        perceived as unsupportive of civil rights. CRAT Report at 56.

    94. On September 29, 1997, USDA's Office of Inspector General 
(``OIG'') issued Phase II of the OIG Report on Civil Rights Issues, 
entitled ``Minority Participation In Farm Service Agency's Farm Loan 
Programs--Phase II'' (``OIG Report II''), which found, inter alia, that 
(a) USDA had resolved only 32 of the 241 outstanding discrimination 
complaints reported in the OIG Report (back in February 1997) and (b) 
the backlog of discrimination complaints had increased from 241 to 474 
for FSA and from 530 to 984 for all of USDA.
    95. On September 30, 1998, the USDA's Office of Inspector General 
released its ``Report to the Secretary on Civil Rights Issues--Phase 
V'' (``OIG Report V'') which found that significant problems within OCR 
persisted. It found, inter alia:

  a.  The Department through [OCR], has not made significant progress 
            in reducing the complaints backlog. Whereas the backlog 
            stood at 1,088 complaints on November 1, 1997, it still 
            remains at 616 complaints as of September 11, 1998. OIG 
            Report V, cover letter to Secretary.

  b.  The backlog is not being resolved at a faster rate because [OCR] 
            itself has not attained the efficiency it needs to 
            systematically reduce the caseload. Few of the deficiencies 
            we noted in our previous reviews have been corrected. The 
            office is still in disarray, providing no decisive 
            leadership and making little attempt to correct the 
            mistakes of the past. We note with considerable concern 
            that after 20 months [OCR] has made virtually no progress 
            in implementing the corrective actions we thought essential 
            to the viability of its operations. OIG Report V at i 
            (emphasis added).

  c.  Most conspicuous among the uncorrected problems is the continuing 
            disorder within [OCR]. The database [OCR] uses to report 
            the status of cases is unreliable and full of errors, and 
            the files it keeps to store needed documentation are 
            slovenly and unmanaged. Forty complaint files could not be 
            found, and another 130 complaints that were listed in USDA 
            agency files were not recorded in [OCR]'s database. 
            Management controls were so poor that we could not render 
            an opinion on the quality of CR's investigations and 
            adjudications. OIG Report V at iii (emphasis added).

  d.  Of equal significance is the absence of written policy and 
            procedures. OIG Report V at iii.

  e.  The absence of formal procedures and accurate recording raises 
            questions about due care within the complaints resolution 
            process. We found critical quality control steps missing at 
            every stage of the process. Staff members with little 
            training and less experience were put to judging matters 
            that carry serious legal and moral implications. Many of 
            [OCR]'s adjudicators, who must determine whether 
            discrimination occurred, were student interns. Legal staff 
            members with the Office of General Council (``OGC''), who 
            review [OCR]'s decisions for legal sufficiency, have had to 
            return over half of them because they were based on 
            incomplete data or faulty analysis. We noted that a 
            disproportionately large percent of the 616 cases of 
            unresolved backlog had bottlenecked in the adjudication 
            unit. OIG Report V at iii (emphasis added).

    96. Upon information and belief, this systemic pattern of 
ineffectiveness has continued. As reported on March 10, 2000, OIG 
Report VII stated:

  a.  This is our seventh attempt to provide CR with constructive ways 
            to overcome its inefficiencies. Based on the results of our 
            review and on the operating environment we observed at 
            [OCR], we cannot report encouraging news. OIG Report VII. 
            Viadero cover letter at 1 (emphasis is original).

  b.  Based on the findings of our current review on [OCR]'s poor 
            record of responding to our past recommendations, it is 
            difficult to recognize any significant level of progress. 
            Unless [OCR] implements a management plan that addresses 
            effective leadership, changing organizational culture, 
            customer focus, and process re-engineering, we question 
            whether future complaints of discrimination in the 
            distribution of program benefits will receive due care. OIG 
            Report VII, Viadero cover letter at 1-2.

  c.  Many other critical issues remain unresolved. Most notably, [OCR] 
            did not re-engineer its complaints resolution process. 
            Although, [OCR] officials had previously agreed that the 
            system they used to process complaints was neither 
            effective nor efficient and although we recommended a major 
            transformation of this system, no significant changes in 
            how complaints are processed have been made. As a result, 
            we cannot conclude that all complaints are processed with 
            due care. OIG Report VII at i (emphasis in original).

  d.  Since February 1997, we have issued six reports on civil rights 
            issues relating to the program complaints process 
            administered by CR. Those six reports contained 67 
            recommendations, 54 of which were directed at CR (the 
            remaining 13 were directed at the Farm Service Agency). 
            During the current review, we found that 41 recommendations 
            (all directed at [OCR]) have not been adequately addressed 
            by [OCR], based on the actions taken as of December 1, 
            1999. As a result, we still have concerns that [OCR] may 
            not be providing due care when processing complaints 
            alleging discrimination in USDA programs. OIG Report VII at 
            14.

    97. Upon information and belief, the systematic pattern of 
ineffectiveness is still affecting USDA today. Among other things, in 
its February 2003 report, the EEOC found that:

  a.  sub-components to USDA's OCR `` `what they want to do' because 
            they have no accountability to [OCR]'', EEOC Report at 9;

  b.  OCR does not investigate complaints of discrimination within the 
            regulatory time period. Data supplied by USDA indicates 
            that it takes OCR on average 594 days to complete an EEO 
            investigation. The EEOC regulations require such an 
            investigation to be completed within 180 days, unless the 
            complainant agrees to an extension of time in writing, for 
            a maximum of 270 days. Id. at 16-17;

  c.  OCR does not have an effective EEO complaint tracking system and 
            process. Id. at 18;

  d.  data entered into the system is unverified and unreliable. Id. at 
            20; and

      OCR's current interpretation of what is a complaint and when it 
            is officially received undercounts the actual number of 
            complaints being made to OCR and provides a distorted 
            picture of complaint activity. Id.

    98. In sum, USDA's willful disregard of, and failure to properly 
investigate, discrimination complaints from Hispanics farmers began 
with the disbanding of civil rights enforcement functions in 1983. 
Furthermore, even after February 1997, when the enforcement staff of 
the OCR was formally reestablished, USDA has failed to afford 
meaningful investigation and review of discrimination complaints. 
Finally, USDA continues to turn a blind eye toward the discrimination 
against Hispanic farmers in the administration of USDA farm loan and 
benefit programs which still persists in many local areas which contain 
large numbers of Hispanics.
VII. Statute of Limitations Is Waived
    99. On October 21, 1998, President Clinton signed into law the 
Omnibus Consolidated Appropriations Act for Fiscal Year 1999, P.L. 105-
277, Div. A,  101(a) [ 741], 112 Stat. 2681 (codified at 7 U.S.C.  
2279, Note). Said legislation waives the statute of limitations for 
plaintiffs in this case. In connection with claims arising from acts of 
discrimination by USDA in its administration of the farm loan and 
disaster assistance programs which occurred between January 1, 1981 and 
December 31, 1996.
    100. In addition, other ostensible applicable statutes of 
limitations applicable to various putative class members are tolled 
because the failure of such plaintiffs to file timely complaints was 
caused by actions or inactions caused by USDA of which plaintiffs were 
unaware owing to defendant's conduct.
    101. Finally, as to acts of discrimination suffered by plaintiffs 
from October 13, 1998 and beyond the date of the filing of this 
complaint, there is no statute of limitations issue.
VIII. Class Action Allegations
    102. Plaintiffs generally bring this class action on behalf of 
Hispanics who farmed or ranched, or attempted to farm or ranch, during 
the period January 1, 1981 to the present and who were discriminated 
against by the USDA on the basis of national origin when they sought to 
participate on equal terms in farm loan and disaster benefit programs 
and who complained to USDA about such discrimination. The predominant 
purpose in doing so is to achieve definitive and lasting reform of the 
USDA policies, procedures and practices which permitted this 
discrimination to occur and endure for so many years, to the end that 
the transparency and resulting accountability essential to such reform 
be achieved. A secondary, but important, purpose is to establish a fair 
and equitable method of permitting recovery of monetary damages 
suffered as a consequence of such discrimination to the maximum extent 
feasible.
    103. The discrimination practiced against plaintiffs occurred at 
various stages in the process by which USDA administered its farm loan 
and non-credit benefit programs. Consequently, there are several 
distinct groups of plaintiffs differentiated by the particular stage of 
the process where they experienced discrimination, to wit:

          a. Subclass A--those Hispanics whom defendant sought to 
        discourage from availing themselves of USDA farm loan or non-
        credit benefit programs by refusing to provide either an 
        application form or assistance in completing the application 
        and pursuing the application process[.]
          b. Subclass B--those Hispanics whom defendant sought to 
        discourage from availing themselves of USDA farm loan or non-
        credit benefit programs by protracted delays in the processing 
        of their applications and the funding of approval loans.
          c. Subclass C--those Hispanics whom defendant sought to 
        discourage from availing themselves of the USDA farm loan and 
        non-credit benefit programs by the use of highly subjective 
        criteria to reject their applications.
          d. Subclass D--those Hispanics whom defendant sought to 
        discourage from availing themselves of the USDA farm loan or 
        non-credit benefit programs by subjecting Hispanic farmers to 
        supervised bank accounts[.]
          e. Subclass E--those Hispanic farmers whom defendant sought 
        to discourage from availing themselves of farm credit or non-
        credit benefit programs by delaying or denying loan servicing.

    104. This action is brought and may be properly maintained as a 
class action pursuant to the provisions of Federal Rules of Civil 
Procedure 23(a)(1)-(4) and, as appropriate, 23(b)(1), (b)(2) and, or 
(b)(3). This action satisfies the numerosity, commonality, typicality, 
adequacy and predominance and superiority requirements of those 
provisions.
    105. The class is so numerous that individual joinder of all the 
members is impractical and that compelling each plaintiff to institute 
and pursue a separate action to secure the remedial relief essential to 
the eradication of systemic, pervasive discrimination practiced against 
each, and/or to recover monetary damages as compensation for the 
economic harm caused by discrimination, is both impractical and a 
needless burden on the courts. The number of Hispanic farmers in the 
United States in 2002, the date of the last published Agricultural 
Census, is approximately 50,592, for all of whom securing remedial 
relief is essential.
    106. Common questions of law and fact exist as to all members of 
the class, whether viewed as a Rule 23(b)(2) or (b)(3) class, and 
predominate over any questions affecting only individual members of the 
class. These common legal and factual questions spring from a central 
undisputed and overriding reality that for decades the USDA knowingly 
tolerated the existence of pervasive discrimination in the 
administration of its farm loan and disaster benefit programs created 
by a highly decentralized, localized system of county committees who 
were free to act on a wholly subjective basis with no meaningful 
supervision from senior management of USDA. This core factual reality 
does not vary from class member to class member and may be established 
without reference to individual circumstances of any particular class 
member. Consequently, the general combination of wholly subjective 
decision making by local officials reflecting the prevailing prejudices 
of each locale, and the lack of oversight by USDA produced a pattern 
and practice of discrimination in areas which Hispanic farmers were 
concentrated, and this pattern and practice were perpetuated for years 
in violation of law.
    107. Additional common questions include:

  (a)  Did USDA attempt to deny Hispanics farm credit and loan 
            servicing in violation of the ECOA?

  (b)  Did USDA seek to deny Hispanic farmers access to noncredit farm 
            benefit programs?

  (c)  Did USDA attempt to discourage Hispanics from availing 
            themselves of farm credit and loan servicing in violation 
            of the ECOA, Regulation B promulgated pursuant thereto, and 
            USDA's own regulations with respect to farm credit?

  (d)  Did defendant attempt to discourage Hispanic farmers from 
            availing themselves of farm credit by denying them 
            applications and assistance in completing applications?

  (e)  Did defendant's attempts to discourage Hispanic farmers from 
            availing themselves of farm credit by denying them 
            applications and assistance in completing applications 
            violate the ECOA, Regulation B promulgated pursuant thereto 
            and USDA's own regulations?

  (f)  Did defendant attempt to discourage Hispanic farmers from 
            availing themselves of farm credit by delaying the 
            processing of their loan applications?

  (g)  Did defendant's attempts to discourage Hispanic farmers from 
            availing themselves of farm credit by delaying the 
            processing of their loan applications violate the ECOA, 
            Regulation B promulgated pursuant thereto and USDA's own 
            regulations?

  (h)  Did defendant attempt to discourage Hispanic farmers from 
            availing themselves of farm credit by using highly 
            subjective criteria to reject their loan applications?

  (i)  Did defendant attempt to discourage Hispanic farmers from 
            availing themselves of farm credit by using highly 
            subjective criteria to reject their loan applications 
            violate the ECOA, Regulation B promulgated pursuant thereto 
            and USDA's own regulations?

  (j)  Did defendant attempt to discourage Hispanic farmers from 
            availing themselves of farm credit by subjecting them to 
            supervised bank accounts?

  (k)  Did defendant attempt to discourage Hispanic farmers from 
            availing themselves of farm credit by subjecting them to 
            supervised bank accounts violate the ECOA, Regulation B 
            promulgated pursuant thereto and USDA's own regulations?

  (l)  Did defendant attempt to discourage Hispanic farmers from 
            availing themselves of farm credit by delaying or denying 
            loan servicing?

  (m)  Did defendant attempt to discourage Hispanic farmers from 
            availing themselves of farm credit by delaying or denying 
            loan servicing violate the ECOA, Regulation B promulgated 
            pursuant thereto and USDA's own regulations?

  (n)  Did defendant fail to investigate or to process discrimination 
            complaints made by Hispanic farmers?

  (o)  Did defendant's failure to investigate or to process Hispanic 
            farmers' civil rights complaints violate the ECOA?

    108. Plaintiffs' claims are typical of the claims of the members of 
the class, all of whom, by virtue of USDA's arbitrary and unlawful 
actions, have been denied equal access to loans or loan servicing, and 
to non-credit benefit programs, and were denied due process in the 
enforcement of their discrimination complaints, and have been subject 
to USDA's institutional and systematic failure to enforce the civil 
rights laws intended to benefit plaintiffs and members of the class.
    109. Plaintiffs are adequate representatives of the class because 
they are members of the class and their interests do not conflict with 
the interests of the members of the class they seek to represent. The 
named plaintiffs' claims are consistent with the claims of other class 
members. Plaintiffs' counsel are experienced class action lawyers who 
will adequately represent the class.
    110. A class action is superior to other available methods for the 
fair and efficient adjudication of this litigation since individual 
litigation of class members' claims regarding USDA's institutional and 
systematic deprivation of their civil rights as described in this 
Complaint is impracticable. Even if any class members could afford to 
litigate, it would be unduly burdensome to the courts to litigate each 
individual case. Individual litigation further presents a potential for 
inconsistent or contradictory judgments and increases the delay and 
expenses to all parties and the court system in resolving the legal and 
factual issues of the case. By contrast, the class action device 
presents far fewer management difficulties and provides the benefits of 
single adjudication of what essentially is one problem, economies of 
scale, and comprehensive supervision by a single court. Notice of the 
pendency of any resolution of this class action can be provided to 
class members by publication and broadcast; in addition, each class 
member's farm number, address, application date and payment results is 
readily available to defendants.
Count I
(Declaratory Judgment)
    111. Plaintiffs, on behalf of themselves and all others similarly 
situated, re-allege all paragraphs above as if fully set forth herein.
    112. An actual controversy exists between plaintiffs and class 
members and defendant as to their rights with respect to defendant's 
farm loan and non-credit benefit programs.
    113. Plaintiffs and the class members pray that this Court declare 
and determine, pursuant to 28 U.S.C.  2201, the rights of plaintiffs 
and class members under defendant's farm programs including their right 
to equal credit, and to equal participation in farm loans and disaster 
benefit programs, and their right to full and timely enforcement of 
national origin discrimination complaints.
Count II
(Violation of Equal Credit Opportunity Act)
    114. Plaintiffs, on behalf of themselves and all others similarly 
situated, re-allege all paragraphs above as if fully set forth herein.
    115. USDA's acts of denying plaintiffs and class members 
applications for loans and requests for loan servicing, delaying the 
processing of their applications, rejecting applications on highly 
subjective eligible criteria, subjecting them to SBAs, denying or 
delaying loan servicing, and systematically failing to properly process 
or to investigate their discrimination complaints was discrimination on 
the basis of national origin and, was contrary to the requirement of 
the Equal Credit Opportunity Act, 15 U.S.C.  1691(a).
Count III
(Violation of Administrative Procedure Act)
    116. Plaintiffs, on behalf of themselves and all others similarly 
situated, re-allege all paragraphs above as if fully set forth herein.
    117. USDA's acts of denying plaintiffs and class members equal 
access to non-credit benefit programs and of systematically failing to 
properly investigate and/or process their discrimination complaints 
were contrary to the requirements of the Administrative Procedure Act, 
5 U.S.C.  701, et seq.
Prayer for Relief
    Wherefore plaintiffs respectfully request this Court to:

          1. declare that the practices, policies, patterns, and 
        procedures described in this Complaint exist at the USDA and 
        that they are unlawful;
          2. issue a permanent injunction prohibiting the defendant, 
        the USDA, its officers, agents, employees and successors from 
        engaging in discrimination in the administration of USDA farm 
        loan and non-credit benefit programs as alleged herein, 
        including but not limited to:

                  (a) refusing to provide applications to, deterring, 
                or otherwise attempting to deter or discourage Hispanic 
                farmers from applying for farm loans and non-credit 
                benefits;
                  (b) applying more stringent underwriting standards or 
                otherwise discriminatorily denying loans to Hispanic 
                farmers who otherwise were qualified;
                  (c) providing inadequate or less assistance to 
                Hispanic farmers in completing farm loan applications 
                and/or farm and home plans and in applying for non-
                credit benefits;
                  (d) granting loans to Hispanic farmers and ranchers 
                on differential and less advantageous terms than 
                similarly situated white male farmers; and
                  (e) discriminatorily denying Hispanic farmers and 
                ranchers servicing on their loans, or providing less 
                advantageous servicing to Hispanic farmers than that 
                offered to similarly situated white male farmers.

          3. issue a permanent injunction requiring that the USDA adopt 
        lending practices in conformity with the requirements of the 
        Equal Credit Opportunity Act and the AdministrativeProcedure 
        Act;
          4. issue an order mandating that USDA remedy its 
        discriminatory patterns and practices by:

                  (a) taking affirmative action to advertise in 
                appropriate media outlets designed to reach Hispanic 
                farmers that USDA encourages and welcomes Hispanic 
                farmers to avail themselves of all of the services 
                offered by USDA and that any action taken by any USDA 
                employee or representative that in any way makes 
                Hispanic farmers feel unwelcome or seeks to deter them 
                from availing themselves of all services provided by 
                USDA shall be reported to the Secretary via a toll free 
                800 number and fully investigated;
                  (b) adopting a system of providing a receipt for 
                service to all farmers and ranchers who visit local FSA 
                offices to inquire about, or to apply for, USDA farm 
                loans or noncredit benefits;
                  (c) requiring FSA personnel to provide full and equal 
                assistance to all farmers who request it without regard 
                to sex, race, national origin, marital status or any 
                other discriminatory basis proscribed by the ECOA;
                  (d) providing applications and explanations regarding 
                both the farm loan and disaster benefit programs in 
                Spanish;
                  (e) providing that those local FSA offices serving 
                areas with large numbers of Hispanic farmers and 
                ranchers employ persons both fluent in Spanish and 
                familiar with Hispanic culture to assist Hispanic 
                farmers and ranchers in applying for farm loan and non-
                credit benefit programs and in securing appropriate 
                levels of servicing and other forms of assistance as 
                necessary;
                  (f) providing, for a period sufficient to ensure that 
                long standing discriminatory practices finally end, a 
                system by which Hispanic farmers and ranchers who are 
                or have been aggrieved by conduct at local FSA offices 
                have an opportunity for an expedited review via 
                independent mediators; and
                  (g) providing that those state and local FSA offices 
                servicing Hispanic farmers and ranchers provide semi-
                annual reports to the Secretary detailing the 
                particulars of each application for farm loans and 
                disaster benefits by Hispanics and the disposition 
                thereof;

          5. to require that USDA, under supervision of the Court, 
        promptly redesign its computerized data collection system as 
        regards its administration of farm loans and non-credit benefit 
        programs in order to ensure that full transparency is achieved 
        and to permanently enjoin defendant and her successors from 
        modifying the data collection system in any manner that has the 
        effect of reducing or in any way hindering the transparency of 
        the data collection system;
          6. once the modernization of the data collection system as 
        described in 5 supra is accomplished, to require the Secretary 
        to issue public annual reports detailing the extent of Hispanic 
        participation in such programs;
          7. to devise a method, consistent with avoiding undue burden 
        upon the Court and defendant and mindful of the public interest 
        in ensuring that fraud be avoided to the maximum extent 
        practicable, by which to award compensatory damages to 
        deserving plaintiffs;
          8. award reasonable attorneys' fees and costs, including 
        expert fees, and interest; and
          9. order such other and further relief, including but not 
        limited to such specific remedies, as the Court deems just and 
        proper.

 
 
 
                                     Respectfully submitted,
 

                                     
                                     

 
 
 
Of Counsel:                          Alan M. Wiseman #187971
Kenneth C. Anderson #243962          Stephen S. Hill #927137
Robert L. Green, Jr. #935775         HOWREYLLP
HOWREYLLP                            1299 Pennsylvania Ave., N.W.
1299 Pennsylvania Ave., N.W.         Washington, D.C. 20004
Washington, D.C. 20004               (202) 783-0800
(202) 783-0800                       (202) 383-6610--Fax
(202) 383-6610                       Alexander J. Pires, Jr. #185009
                                     Conlon, Frantz, Phelan & Pires, LLP
                                     1818 N Street, N.W.
                                     Suite 700
                                     Washington, D.C. 20036
                                     (202) 331-7050
                                     (202) 331-9306--Fax
                                     Philip Fraas #211219
                                     3050 K Street, N.W.
                                     Suite 400
                                     Washington, D.C. 20007
                                     (202) 342-8864
                                     (202) 342-8451--Fax
                                     Attorneys for Plaintiffs
                                     Guadalupe L. Garcia, Jr., et al.
Date: June 28, 2006
 

                                 ______
                                 
Submitted Report by Hon. Ann Kirkpatrick, a Representative in Congress 
                              from Arizona
Indian Issues: Agricultural Credit Needs and Barriers to Lending on 
        Tribal Lands
May 2019
GAO-19-464
GAO Highlights
          Highlights of GAO-19-464, a report to congressional 
        committees.
Why GAO Did This Study
    About 46 million of the 56 million acres of the land that the 
Federal Government holds in trust for the benefit of Indian Tribes and 
their members has an agricultural purpose. However, Tribal agriculture 
and economic development experts have noted that Indian Tribes and 
their members may need improved access to agricultural credit.
    Congress included a provision in statute for GAO to review the 
ability of FCS to meet the agricultural credit needs of Indian Tribes 
and their members on Tribal lands. This report describes (1) what is 
known about the agricultural credit needs of Indian Tribes and their 
members, (2) barriers stakeholders identified to agricultural credit on 
Tribal lands, (3) FCS authority and actions to meet those agricultural 
credit needs, and (4) stakeholder suggestions for improving Indians' 
access to agricultural credit on Tribal lands.
    GAO explored potential data sources on Indians' agricultural credit 
needs, conducted a literature review, and reviewed statutes and 
regulations governing Tribal lands and FCS. GAO also reviewed the 
marketing plans and written responses of a nongeneralizable sample of 
11 FCS associations whose territories included Tribal lands with high 
levels of agricultural activity. GAO interviewed stakeholders from a 
sample of seven Tribes (generally selected based on Tribal region and 
agricultural activity), experts in Tribal agriculture and economic 
development (selected based on relevant publications, Congressional 
testimonies, and others' recommendations), and representatives from FCS 
and its regulator, the Farm Credit Administration, and other relevant 
government agencies.
    View GAO-19-464.* For more information, contact Alicia Puente 
Cackley at (202) 512-8678 or [email protected].
---------------------------------------------------------------------------
    * https://www.gao.gov/products/GAO-19-464.
---------------------------------------------------------------------------
What GAO Found
    Limited data are available on the needs of Indian Tribes and their 
members for agricultural credit, such as operating or equipment loans, 
to develop and expand agricultural businesses on Tribal lands. Federal 
regulations have generally prohibited lenders from inquiring about the 
personal characteristics, such as race, of applicants on nonresidential 
loans. Some Tribal stakeholders and experts said that Tribal members 
may not have applied for agricultural credit because they heard of 
other Tribal members being denied loans. They said that Tribal members 
likely obtain agricultural credit from Department of Agriculture 
programs or Tribal lenders. Another potential source of agricultural 
credit is the Farm Credit System (FCS), a government-sponsored 
enterprise that includes 69 associations that lend to farmers and 
ranchers.
    Tribal stakeholders and experts reported a general lack of 
commercial credit on Tribal lands due to the following factors:

   Land use restrictions. Most Tribal lands only can be used as 
        loan collateral in certain circumstances or with Federal 
        permission.

   Administrative process delays. Tribal members reported often 
        encountering delays obtaining necessary Federal loan documents.

   Legal challenges. Lenders reported concerns about their 
        ability to recover loan collateral due to the unique legal 
        status of Tribes.

   Loan readiness. Tribal members may have no or poor credit 
        histories and be unfamiliar with the paperwork required for an 
        agricultural loan, such as a business plan.

    FCS is authorized to provide a range of credit services to eligible 
agricultural producers, which may include Indian Tribes, Tribal 
businesses, and Tribal members. FCS associations must obtain land as 
collateral for long-term real estate loans, but are not required to do 
so for shorter-term loans, such as for operating costs or equipment 
purchases. Some FCS associations GAO contacted reported making loans to 
Indian Tribes or their members. In a sample of 11 FCS associations with 
Tribal lands in their territory, eight said they have loaned to Tribes 
or their members in the past 2 years. GAO's review of these 11 
associations' marketing plans and written responses to GAO follow-up 
questions found that seven noted outreach--such as support for 
agricultural education activities--targeted to Tribes and their 
members. The other four reported broad and general outreach efforts 
that also included minority groups.
    To improve access to agricultural credit on Tribal lands, 
stakeholders discussed several options. For example, some stakeholders 
discussed the potential for partnerships between commercial or 
government lenders and Tribal lenders (such as Native Community 
Development Financial Institutions) and increased use of loan 
guarantees. Some stakeholders also discussed actions Tribes could take 
to ease barriers to lending, such as adopting their own leasing 
procedures to reduce administrative processing time with Federal 
agencies for certain loans.
Contents
Letter

    Background
    Limited Data Are Available on Agricultural Credit Needs of Indian 
Tribes and Their Members
    Stakeholders Reported That Tribes and Their Members Face Multiple 
Barriers to Obtaining Agricultural Credit on Tribal Lands
    FCS Laws Allow for Lending on Tribal Lands, and Some FCS 
Associations Reported Lending to Tribes or Tribal Members
    Stakeholders Discussed Lender Partnerships, Loan Guarantees, and 
Other Options to Improve Agricultural Credit Access on Tribal Lands
    Agency Comments 30

Appendix I Objectives, Scope, and Methodology
Appendix II GAO Contact and Staff Acknowledgments
Tables

    Table 1: Tribal Land Types and Definitions
    Table 2: Agricultural Activity on 76 Selected Indian Reservations, 
by Primary Farm or Ranch Operator (2012)
Abbreviations

 
 
 
BIA                                  Bureau of Indian Affairs
FCA                                  Farm Credit Administration
FCS                                  Farm Credit System
HEARTH Act                           Helping Expedite and Advance
                                      Responsible Tribal Home Ownership
                                      Act of 2012
Interior                             Department of the Interior
Native CDFI                          Native Community Development
                                      Financial Institution
USDA                                 Department of Agriculture
 
This is a work of the U.S. Government and is not subject to copyright
  protection in the United States. The published product may be
  reproduced and distributed in its entirety without further permission
  from GAO. However, because this work may contain copyrighted images or
  other material, permission from the copyright holder may be necessary
  if you wish to reproduce this material separately.

May 9, 2019

  Hon. Pat Roberts,
  Chairman;

  Hon. Debbie Stabenow,
  Ranking Minority Member,
  Committee on Agriculture, Nutrition, and Forestry,
  United States Senate;

  Hon. Collin C. Peterson,
  Chairman;

  Hon. K. Michael Conaway,
  Ranking Minority Member,
  Committee on Agriculture,
  House of Representatives;

  Hon. Raul M. Grijalva,
  Chairman;

  Hon. Rob Bishop,
  Ranking Minority Member,
  Committee on Natural Resources,
  House of Representatives.

    Approximately 46 million acres of the 56 million acres the Federal 
Government holds in trust for the benefit of Indian Tribes and their 
members has an agricultural purpose, according to the Department of the 
Interior's (Interior) Bureau of Indian Affairs (BIA).\1\ Agricultural 
activity on Tribal lands can include farming, ranching, aquaculture, 
and other agribusinesses.\2\ Tribal agriculture and economic 
development experts have noted that Indian Tribes and their members may 
need improved access to agricultural credit, such as operating or 
equipment loans, to develop and expand agricultural businesses on 
Tribal lands. One source of agricultural credit is the Farm Credit 
System (FCS), a national network of customer-owned lending 
institutions.
---------------------------------------------------------------------------
    \1\ See Bureau of Indian Affairs, ``Branch of Agriculture and 
Rangeland Development,'' accessed on April 18, 2019. https://
www.bia.gov/bia/ots/division-natural-resources/branch-agriculture-and-
rangeland-development. BIA officials told us that tracts with 
agricultural utilization also may have coinciding land uses that do not 
prohibit or interfere with agriculture purposes. Individuals and Tribes 
decide how to use their respective lands and report those decisions to 
BIA.
    \2\ For purposes of this report, ``Tribal lands'' refers to 
reservations (including all land within the reservations' boundaries), 
trust land, allotments, and restricted fee land. We discuss the types 
of Tribal lands in more detail later in the Background. Also see 
appendix I.
---------------------------------------------------------------------------
    The Agricultural Improvement Act of 2018 included a provision for 
us to study the agricultural credit needs of Indian Tribes and their 
members on Tribal lands, and FCS institutions' authority and resources 
to meet those needs. This report describes (1) what is known about the 
agricultural credit needs of Indian Tribes and their members on Tribal 
lands, (2) the barriers stakeholders and experts identified that Indian 
Tribes and their members on Tribal lands face in obtaining agricultural 
credit to meet their needs, (3) FCS's lending authority and lending and 
outreach activities on Tribal land, and (4) suggestions stakeholders 
have discussed to improve access to agricultural credit on Tribal 
lands.
    To address all the objectives, we reviewed relevant Federal 
statutes, regulations, and other legal documentation. We interviewed 
officials from the Farm Credit Administration (FCA), BIA, the 
Department of Agriculture (USDA), and FCS's trade association, the Farm 
Credit Council. We interviewed experts on Tribal agriculture and 
economic development from advocacy groups and academia, selected based 
on relevant publications, testimonies before Congress, or 
recommendations from other experts in these fields. Throughout this 
report, we refer to them as experts.
    We also interviewed stakeholders associated with seven selected 
Tribes.\3\ We first selected six Tribes from locations in different 
regions (Great Plains, Rocky Mountain, Northwest, Southwest) and one 
state (Oklahoma). Within these regions, the selected Tribes were those 
with generally large Tribal land areas with high levels of agricultural 
activity, as indicated by the USDA 2012 Census of Agriculture data.\4\ 
Four of the six Tribes we contacted to request interviews provided us 
with various contacts. As a result, for four Tribes, we interviewed 
Tribal agriculture department employees, Tribal farm employees, or 
representatives of the Native Community Development Financial 
Institution (Native CDFI) serving the Tribe.\5\ We then selected three 
additional Tribes based on USDA data or recommendations from experts we 
interviewed.\6\ For these three Tribes, we interviewed employees of 
Tribal farms or representatives of Native CDFIs or community 
development corporations. Throughout this report, we refer to Tribal 
government employees, Tribal farm employees, or representatives of 
Native CDFIs or community development corporations serving a Tribe as 
Tribal stakeholders. Although the information we obtained from the 
Tribal agriculture department employees allowed us to provide anecdotal 
Tribal perspectives, it is not generalizable to the 573 federally 
recognized Indian Tribes. The views of Tribal farm employees and Native 
CDFI and community development corporation representatives also cannot 
be generalized to Tribes but illustrate views on needs, barriers, and 
other issues from the perspectives of the organizations.
---------------------------------------------------------------------------
    \3\ Our report generally addresses the agricultural credit needs of 
Tribes and their members in the lower 48 states. See appendix I.
    \4\ Department of Agriculture, 2012 Census of Agriculture: American 
Indian Reservations, Subject Series, Part 5, AC-12-S-5 (Washington, 
D.C.: August 2014). This was the most recent available version of the 
reservation data as of April 2019.
    \5\ CDFIs expand economic opportunity in low-income communities by 
providing access to financial products and services for local residents 
and businesses. The Department of the Treasury's CDFI Fund has a Native 
American CDFI Assistance Program that makes financial and technical 
assistance awards to Native CDFIs (certified or certifiable CDFIs where 
at least 50 percent of the activities serve Native Americans, Alaska 
Natives, and/or Native Hawaiians). There were 68 certified Native CDFIs 
as of February 2019, according to the CDFI Fund.
    \6\ We contacted the additional three Tribes to supplement our 
original sample. For more information, see appendix I.
---------------------------------------------------------------------------
    To address the first objective on agricultural credit needs, we 
also reviewed Federal data sources and Federal regulations related to 
collecting data on loan applicants' personal characteristics for 
nonresidential loans.
    To supplement the limited data and provide additional information 
for the second objective on barriers to obtaining agricultural credit, 
we conducted a review of literature from government and academic 
reports and identified additional materials through citations in 
literature we reviewed.
    To collect information for the third objective, we reviewed the 
marketing plans of a nongeneralizable sample of 11 FCS associations 
whose territories included large Tribal land areas with high levels of 
agricultural activity. We also obtained written responses from the 11 
associations to a series of questions we posed about their lending and 
outreach to Tribes and their members and any challenges in making loans 
involving Tribal lands. For more information on our scope and 
methodology, see appendix I.
    We conducted this performance audit from December 2018 to May 2019 
in accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe that 
the evidence obtained provides a reasonable basis for our findings and 
conclusions based on our audit objectives.
Background
Indian Tribes and Tribal Land Types
    As of May 2019, the Federal Government recognized 573 Indian Tribes 
as distinct, independent political communities with certain powers of 
sovereignty and self-government, including power over their territory 
and members. The Tribes can vary greatly in terms of their culture, 
language, population size, land base, location, and economic status. As 
of the 2010 U.S. Census, about 21 percent, or 1.1 million, of all 
American Indians lived on Tribal lands.
    Tribal lands include many land types (see table 1). According to 
BIA, the Federal Government holds about 46 million acres in trust for 
Tribes (Tribal trust land) and more than 10 million acres in trust for 
individual Indians (individual trust land).\7\
---------------------------------------------------------------------------
    \7\ The terms Native American and Indian generally refer to 
American Indians. In this report, we use the term ``Indian'' unless 
citing the work of others that uses ``Native American.''

               Table 1: Tribal Land Types and Definitions
------------------------------------------------------------------------
         Land type                           Description
------------------------------------------------------------------------
Trust                        The Federal Government holds legal title
                              but the beneficial interest remains with
                              the Indian Tribe or individual Indian.
Restricted fee               An Indian Tribe or individual Indian holds
                              title to the land, but with legal
                              restrictions against alienation or
                              encumbrance (for example, the land cannot
                              be sold or conveyed without the approval
                              of the Secretary of the Interior).
Allotment                    Land owned by one or more individual
                              Indians as a result of Federal laws that
                              divided reservation lands and allotted
                              them to individual Tribal members.
                              Allotments can be individual trust land or
                              individual restricted fee land.
Reservation                  Land set aside by treaty, Federal law, or
                              Executive Order for the residence or use
                              of an Indian Tribe. The land within the
                              reservation may include a mixture of
                              Tribal trust land, individual trust land,
                              restricted fee land, allotments, and fee-
                              simple land. (Fee-simple land is owned
                              without restriction and can be alienated
                              or encumbered on the owner's initiative
                              unless it is owned by an Indian Tribe. It
                              is the most common type of private land
                              ownership in the United States.)
------------------------------------------------------------------------
Source: GAO analysis of Federal laws and regulations. D GAO-19-464.

    Some Tribes also have reservations. According to BIA, there are 
approximately 326 Indian land areas in the United States administered 
as Federal Indian reservations (including reservations, pueblos, 
rancherias, missions, villages, and communities). The land within the 
reservation may include a mixture of Tribal trust land, individual 
trust land, restricted fee land, allotments, and land without trust or 
restricted status (that is, fee-simple land), which may be owned by 
Tribes, individual Indians, or non-Indians.\8\
---------------------------------------------------------------------------
    \8\ Beginning in the late 1880s, Federal laws were enacted that 
divided some reservation lands among individual Tribal members. These 
allotments were often only held in trust or subject to restrictions on 
alienation for a limited period of time. Once the trust period and 
restrictions ended, it was easier for land to be sold or pass out of 
Indian ownership. In addition, surplus lands within the reservation 
were sold to non-Indians. As a result, Indian land holdings in the 
lower 48 states decreased from 138 million acres to 48 million acres 
and non-Indians may own fee-simple land within a reservation's 
boundaries. In 1934, the Indian Reorganization Act ended the practice 
of allotting Indian reservations.
---------------------------------------------------------------------------
Agricultural Activity on Tribal Lands
    Agricultural producers (farmers, ranchers, or producers or 
harvesters of aquatic products) on Tribal lands can be individual 
Tribal members, the Tribe itself, or non-Indians who lease the land 
from the Tribe or Indian owner. According to USDA's 2012 Census of 
Agriculture, about 75 percent of farms and ranches on 76 selected 
Indian reservations were operated by agricultural producers that 
identified as American Indian or Alaska Native (see table 2).\9\ On 
these reservations, Indian producers held 61 percent of total farm and 
ranch acreage. However, the total market value of agricultural products 
sold from Indian-operated farms and ranches was just over \1/10\ of 
that of non-Indian operated farms and ranches on the 76 selected 
reservations.\10\
---------------------------------------------------------------------------
    \9\ The Navajo Nation, which has the largest reservation in the 
United States at 16 million acres, operates a large share of the total 
Indian-operated farms and ranches. According to the 2012 Census of 
Agriculture, there were 14,362 Indian-operated farms on the Navajo 
reservation--approximately 80 percent of all Indian-operated farms and 
ranches on the 76 reservations detailed in the Census.
    \10\ All U.S. Census and USDA Census of Agriculture estimates in 
this report are likely underestimates, as Indian populations 
historically have been undercounted in census activities. In addition, 
the reservation data from the Census of Agriculture only reflect 76 of 
326 total reservations. According to USDA, it based its decisions about 
which reservation data to publish on factors including approval of 
Tribal officials, amount of agricultural activity, success of list 
building, and respondent confidentiality.

   Table 2: Agricultural Activity on 76 Selected Indian Reservations, by Primary Farm or Ranch Operator (2012)
----------------------------------------------------------------------------------------------------------------
                                                                                                  Total share of
                                                    Total acreage   Total share    Total market    market value
                       Total number   Total share    of farms and  of acreage of     value of           of
                       of farms and   of farms and   ranches (in     farms and     agricultural    agricultural
                         ranches      ranches (%)       acres)      ranches (%)    products sold   products sold
                                                                                  (in $1,000s) a        (%)
----------------------------------------------------------------------------------------------------------------
   Indian-operated          17,948             75     28,560,057             61         361,145              10
Non-Indian operated          5,980             25     18,449,341             39       3,079,386              90
                     -------------------------------------------------------------------------------------------
  Total.............        23,800            100     47,009,398            100       3,440,531             100
----------------------------------------------------------------------------------------------------------------
Source: GAO analysis of 2012 Department of Agriculture Census of Agriculture data. D GAO-19-464.
Notes: For the Census of Agriculture, the Department of Agriculture (USDA) primarily collected data through the
  mail. However, to maximize coverage of American Indian and Alaska Native agricultural producers, USDA staff
  obtained supplemental information from knowledgeable reservation officials. USDA adjustments for nonresponse,
  misclassification, or other factors may result in a level of error related to its estimates.
a According to USDA officials, sales reported are for the entire farm, both on and off of the reservation.
  Therefore, if a farm had a small piece of land on the reservation, the entire sales would be reported in these
  values, even if little of the value was produced on reservation land.

    In 2011, USDA, which operates several agricultural programs 
targeted to traditionally underserved populations, settled a class 
action lawsuit brought by Native American farmers and ranchers for $760 
million (Keepseagle v. Vilsack).\11\ The lawsuit alleged that USDA 
discriminated against Native Americans in its farm loan and farm loan 
servicing programs. In 2018, $266 million of the remaining settlement 
proceeds were used to establish the Native American Agriculture Fund. 
The Fund will begin awarding grants in 2019 to fund the provision of 
business assistance, agricultural education, technical support, and 
advocacy services to Native American farmers and ranchers.
---------------------------------------------------------------------------
    \11\ Civil Action No. 1:99CV03119 (D.D.C.).
---------------------------------------------------------------------------
Agricultural Credit and the Farm Credit System
    Like other businesses, agricultural producers generally require 
financing to acquire, maintain, or expand their farms, ranches, or 
agribusinesses. Types of agricultural loans as categorized by their 
purpose or maturity may vary by lender but generally include the 
following: \12\
---------------------------------------------------------------------------
    \12\ Paul N. Ellinger and Peter J. Barry, A Farmer's Guide to 
Agricultural Credit (Urbana-Champaign, Ill.: The Center for Farm and 
Rural Business Finance, University of Illinois), accessed April 5, 
2019, http://www.farmdoc.illinois.edu/finance/FarmersGuidetoCredit
Body.htm.

   Short-term loans. These loans are used for operating 
        expenses and match the length and anticipated production value 
        of the operating or production cycle. They are typically 
---------------------------------------------------------------------------
        secured by the product (crops or livestock).

   Intermediate-term loans. These loans are typically used to 
        finance depreciable assets such as equipment, which serves as 
        the loan collateral. The loan terms usually range from 18 
        months to 10 years.

   Long-term loans. These loans are used to acquire, construct, 
        and develop land and buildings with terms longer than 10 years. 
        They are secured by real estate and may be called real estate 
        loans.

    Several types of lenders provide credit to U.S. agricultural 
producers. According to USDA's Economic Research Service, in 2017, FCS 
and commercial banks provided most agricultural credit in the United 
States, with respective market shares of 40 and 41 percent. USDA's Farm 
Service Agency--a lender that focuses on assistance to beginning and 
underserved farmers and ranchers and also guarantees the repayment of 
loans made by other lenders--provided three percent, and the remainder 
was provided by individuals, life insurance companies, and other 
lenders.\13\
---------------------------------------------------------------------------
    \13\ Department of Agriculture, Economic Research Service, U.S. and 
State-Level Farm Income and Wealth Statistics, accessed April 18, 2019, 
https://www.ers.usda.gov/data-products/farm-income-and-wealth-
statistics/.
---------------------------------------------------------------------------
    FCS is a government-sponsored enterprise, established in 1916 to 
provide sound, adequate, and constructive credit to American farmers 
and ranchers. FCS is regulated by FCA, an independent Federal agency.
    FCS's statutory mission includes being responsive to the needs of 
all types of creditworthy agricultural producers, and in particular, 
young, beginning, and small farmers and ranchers.\14\ According to FCA, 
FCS is not statutorily mandated to focus on providing financial 
opportunities to any other group.
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    \14\ FCS associations are required to establish programs for 
furnishing sound and constructive credit and related services to young, 
beginning, and small farmers and ranchers. These programs must assure 
that such credit and services are available in coordination with other 
units of FCS serving the territory and with other governmental and 
private sources of credit. 12 U.S.C.  2207(a).
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    FCS lends money to eligible agricultural producers primarily 
through its 69 lending associations (FCS associations), which are 
funded by its four banks (FCS banks).\15\ All are cooperatives, meaning 
that FCS borrowers have ownership and control over the organizations. 
As of 2017, FCS had approximately $259 billion in loans outstanding, of 
which 46 percent were long-term real estate-based loans; 20 percent 
were short- and intermediate-term loans (such as for farm equipment or 
advance purchases of production inputs); and 16 percent were for 
agribusiness activities, such as agricultural processing and 
marketing.\16\
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    \15\ The scope of this report is limited to the FCS banks and FCS 
associations (collectively, FCS institutions). In addition to the FCS 
institutions, FCS includes the Federal Farm Credit Banks Funding 
Corporation, a special-purpose entity that issues and markets debt 
securities on behalf of FCS banks to raise loan funds. FCS also 
includes the Federal Agricultural Mortgage Corporation (Farmer Mac), 
which provides a secondary market for agricultural real estate loans, 
government-guaranteed portions of certain loans, rural housing mortgage 
loans, and eligible rural utility cooperative loans. Farmer Mac has no 
liability for the debt of any other FCS institution, and the other FCS 
institutions have no liability for Farmer Mac debt.
    \16\ The rest of the loans were generally for other agriculture-
related purposes, such as rural housing or utilities, which are not 
included in our scope. See Farm Credit Administration, 2017 Annual 
Report on the Farm Credit System (McLean, Va.: October 2018).
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    FCS associations are not evaluated under the Community Reinvestment 
Act, which requires certain Federal banking regulators to assess 
whether financial institutions they supervise are meeting the credit 
needs of the local communities. FCS receives certain tax exemptions at 
the Federal, state, and local level.\17\
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    \17\ See, for example, 12 U.S.C.  2023, 2077, 2098, 2134.
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Limited Data Are Available on Agricultural Credit Needs of Indian 
        Tribes and Their Members
Data on Agricultural Credit Needs for Tribes and Their Members Are 
        Limited
    Little data exists on the credit needs of Tribes and their members. 
One measure of unmet credit needs is the difference between the amount 
applied for and the amount received. However, we could not determine 
the amount of agricultural credit that Indian Tribes and their members 
applied for or received. These data were limited in part because 
Federal regulations historically have prohibited lenders from asking 
about the race of applicants for nonresidential loans, including 
agricultural loans.\18\
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    \18\ With limited exceptions, creditors may not inquire about the 
race, color, religion, national origin, or sex of an applicant for a 
credit transaction that is subject to the Equal Credit Opportunity Act. 
12 CFR  1002.5(b). In 2010, the law was amended to require financial 
institutions to collect information concerning credit applications made 
by women-owned, minority-owned, and small businesses. The purpose of 
the data collection is to facilitate enforcement of fair lending laws 
and identify the business and community development needs of women-
owned, minority-owned, and small businesses. 15 U.S.C.  1691c-2. 
However, in 2011, the Consumer Financial Protection Bureau advised 
financial institutions that their obligations under the new provision 
would not go into effect until implementing regulations were issued. As 
of April 2019, the bureau has not issued implementing regulations. On a 
separate note, in cases that did not involve lending, the U.S. Supreme 
Court has ruled that membership in a federally recognized Indian Tribe 
is a political, not a racial, classification.
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    Additionally, even if data were available, the unmet need could be 
greater than that indicated by information on those who may have 
applied for and did not receive credit. Four Tribal stakeholders and 
experts told us that Tribal members may choose not to apply for 
agricultural credit because they were directly discouraged by loan 
officers, had problems completing paperwork, or had heard of other 
Tribal members being denied loans.
    Two Tribal agricultural experts told us that on some level, the 
agricultural credit needs of Indian Tribes and their members are the 
same as other agricultural producers' credit needs. In particular, 
Tribal stakeholders and experts told us that the Tribal members need 
short-term loans for operating expenses and intermediate-term loans for 
equipment. One difference between the agricultural credit needs of 
Tribal members and other producers is that Tribal members may have a 
greater unmet need for long-term loans, which are typically secured by 
real estate, because of difficulties in using Tribal lands as 
collateral, as discussed later in this report.
    Credit needs vary based on the type of operation or borrower.

   Type of operation. Some Tribal stakeholders we interviewed 
        told us that members of their Tribes were more likely to 
        participate in ranching than farming, partly because farming 
        has higher start-up costs. For example, one Tribal agricultural 
        expert told us a rancher can start with a few head of cattle 
        and grow the herd over time, but a beginning farmer may need to 
        purchase equipment. Additionally, several Tribal stakeholders 
        told us that land on their reservations was more suitable for 
        ranching than farming.

   Type of borrower. Some Tribes have agricultural businesses, 
        which have credit needs different from those of individual 
        Tribal members, according to experts and BIA officials we 
        interviewed. For example, they may be greater or more complex. 
        According to an expert and a Tribal stakeholder, established 
        agricultural businesses likely would be able to receive credit 
        from commercial lenders because they have more resources to 
        pledge as collateral or stronger credit histories. 
        Additionally, if a Tribe has other profitable businesses, it 
        likely will have less difficulty obtaining credit or financing 
        agriculture with those other resources than those without such 
        resources.

    According to Tribal stakeholders, experts, and BIA officials we 
interviewed, Tribal members who obtain agricultural credit likely 
receive it from USDA's Farm Service Agency, other USDA programs, or 
Native CDFIs. Some Tribal members receive agricultural credit from 
local private lenders, but they are typically larger, more established 
borrowers. One expert told us that Tribal members who are smaller or 
beginning agricultural producers and cannot access commercial banks 
instead may borrow money from family members. A 2017 report found that 
Native business owners were less likely than other business owners to 
obtain start-up capital from banks.\19\
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    \19\ Miriam Jorgensen and Randall K.Q. Akee, Access to Capital and 
Credit in Native Communities: A Data Review (Tucson, Ariz.: Native 
Nations Institute, 2017).
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    Some experts we interviewed cited Native CDFIs as growing providers 
of agricultural credit to Tribal members. A 2014 survey of 41 Native 
CDFIs--credit unions, community banks, and loan funds--found more than 
40 percent provided credit and training to farmers and ranchers.\20\ In 
total, these CDFIs made almost $6 million in agricultural loans 
annually. However, Native CDFIs are limited in how much agricultural 
credit they can provide. In the 2014 survey, 56 percent of the Native 
CDFIs that made agricultural loans reported not having enough capital 
for such loans, with a total unmet need of at least $3 million in the 
previous year. One Native CDFI we interviewed said its agricultural 
loans averaged about $100,000 per borrower, and another said its 
operating loans were about $50,000-$75,000 and its intermediate-term 
loans about $100,000.
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    \20\ First Nations Oweesta Corporation, Food Financing Efforts 
2014: Native CDFI Support of Native Farmers & Ranchers (Longmont, 
Colo.: 2014). The survey queried all 67 Native CDFIs that were 
established at the time of the survey and 41 responded for a response 
rate of 61 percent.
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Stakeholders See Potential for Growth of Agricultural Activity on 
        Tribal Lands That Could Require Access to Credit
    Selected literature we reviewed and interviews with some Tribal 
stakeholders found that Tribes have a growing interest in agriculture, 
motivated by concerns over Tribal members' access to food, health, and 
employment opportunities.

   Food access. A 2014 USDA study found that about 26 percent 
        of individuals in Tribal areas lived within 1 mile of a 
        supermarket, compared to about 59 percent of all Americans.\21\
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    \21\ Phillip Kaufman, et al., Measuring Access to Healthful, 
Affordable Food in American Indian and Alaska Native Tribal Areas, EIB-
131 (Washington, D.C.: December 2014).

   Health. According to the Centers for Disease Control and 
        Prevention, American Indians and Alaska Natives have higher 
        rates of obesity and diabetes than white Americans.\22\
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    \22\ Centers for Disease Control and Prevention, Summary Health 
Statistics: National Health Interview Survey: 2017. Tables A4a and A-15 
(Atlanta, Ga.: 2017). Data were only available for American Indians and 
Alaska Natives as a combined group.

   Employment. A 2014 Interior report found that, on average, 
        only about 50 percent of Native American adults in Tribal 
        statistical areas were employed either full or part-time.\23\
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    \23\ Department of the Interior, Office of the Assistant 
Secretary--Indian Affairs, 2013 American Indian Population and Labor 
Force Report (Washington, D.C.: Jan. 16, 2014). The report defined 
``Tribal statistical areas'' as geographic areas identified by the 
Census that define the boundaries of reservations or comparable Tribal 
areas for the purposes of statistical data collection.

    Two commissioned reports on Tribal agriculture say that Indian 
Tribes' vast land base represents an untapped opportunity for Tribes to 
increase agricultural production, including growing their own healthful 
foods and economic development.\24\ But, as previously discussed, for 
reservations featured in USDA's 2012 Census of Agriculture, non-Indian 
producers received a large share of the agricultural revenue. 
Additionally, the agricultural products grown on Tribal lands typically 
do not feed Tribal members and instead are sold into the general 
agriculture commodity system.
---------------------------------------------------------------------------
    \24\ Echo Hawk Consulting, Feeding Ourselves: Food Access, Health 
Disparities, and the Pathways to Healthy Native American Communities 
(Longmont, Colo.: 2015) and First Nations Development Institute, Time 
for the Harvest: Native Food Systems in Perspective (Longmont, Colo.: 
February 2004).
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    Furthermore, these reports and experts we interviewed noted that 
the growth of agriculture on Tribal lands could require access to 
credit. For example, one Tribal agriculture expert told us some Tribes 
are interested in transitioning to ``value-added'' agriculture, which 
aims to help the community that produces raw agricultural materials 
capture the value of the products as they progress through the food 
supply chain (for example, by processing crops they grow or 
transitioning to more profitable products, such as organic). Value-
added agriculture initiatives might require building facilities or 
acquiring more expensive inputs, and Tribes likely would need financing 
to support these initiatives. According to some experts and a study we 
reviewed, if Tribes and their members cannot access affordable credit, 
it could limit the growth of these initiatives.\25\
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    \25\ Echo Hawk Consulting.
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Stakeholders Reported That Tribes and Their Members Face Multiple 
        Barriers to Obtaining Agricultural Credit on Tribal Lands
    Tribes and their members face several barriers to obtaining 
agricultural credit, including land tenure issues, administrative 
challenges, lenders' legal concerns, and loan readiness issues. As a 
result, there is limited commercial lending on Tribal lands.
Land Tenure Issues May Present Hurdles to Obtaining Agricultural Credit
    Ten Tribal stakeholders and experts we interviewed cited 
difficulties in using Tribal lands as collateral as a barrier to 
obtaining credit because of Federal laws or other constraints.

   Tribal trust and restricted fee lands. Federal law generally 
        prohibits lenders from obtaining an ownership interest in 
        Tribal trust and restricted fee lands. As a result, Tribes are 
        not able to use their 46 million acres of Tribal trust or 
        restricted fee lands as collateral for a loan. However, Tribes 
        can lease such lands to other parties, including a Tribal 
        business or Tribal member who wishes to use the land for 
        agricultural purposes (lessees). These lessees can then pledge 
        their ``leasehold interest'' in the lands as collateral for a 
        loan, but may face challenges in doing so.\26\ For example, in 
        general, leases of Tribal trust and restricted fee lands must 
        be approved by BIA and comply with its leasing regulations, 
        which stipulate that agricultural leases generally have a 
        maximum term of 10 years.\27\ While BIA generally allows leased 
        Tribal trust and restricted fee lands to be subject to a 
        leasehold mortgage, three Tribal stakeholders and experts we 
        interviewed said that BIA's maximum term for agricultural 
        leases often was insufficient for obtaining an agricultural 
        loan.\28\
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    \26\ The lessee must obtain approval of the Secretary of the 
Interior to pledge a leasehold interest as collateral. When a borrower 
uses a leasehold interest as collateral, upon default, the lender has 
the right to exercise control over the land for the remaining term of 
the underlying lease.
    \27\ An agricultural lease may have a term of up to 25 years if 
substantial investment in the improvement of the land is required. 
However, some Tribes may have statutory authority to enter into 
agricultural leases for longer than 10 or 25 years. In addition, the 
Helping Expedite and Advance Responsible Tribal Home Ownership Act of 
2012 (HEARTH Act) authorizes Tribes to develop their own agricultural 
leasing regulations and, once those regulations are approved by the 
Secretary of the Interior, to issue agricultural leases of their trust 
and restricted fee lands without BIA approval. Under the HEARTH Act, 
Tribes may issue agricultural leases of Tribal trust and restricted fee 
lands for a term of 25 years with up to two renewal terms of 25 years 
each. The HEARTH Act does not authorize Tribes to assume responsibility 
for leasing individual trust and restricted fee lands. Pub. L. No. 112-
151,  2,126 Stat. 1150, 1151 (2012) (codified at 25 U.S.C.  415(h)). 
Tribes also may be able to lease their trust and restricted fee land 
without Interior approval pursuant to other statutory authority.
    \28\ In general, lenders require that the term of the lease be 
longer than the term of the loan. Therefore, a 10 year lease would not 
be sufficient collateral for most long-term real estate loans, which 
have terms longer than 10 years.

   Individual trust and restricted fee lands. Unlike Tribal 
        trust and restricted fee lands, the owners of individual trust 
        and restricted fee lands can use these lands as collateral for 
        a loan with permission of the Secretary of the Interior.\29\ 
        However, many tracts of individual trust and restricted fee 
        lands are allotments with fractionated ownership. According to 
        nine Tribal stakeholders and experts we interviewed, 
        fractionated land is a barrier to agricultural activity and 
        obtaining credit. Fractionated land occurs when an allottee 
        dies without a will and ownership is divided among all the 
        heirs, but the land is not physically divided. Thus, multiple 
        owners (in some cases thousands) can have an ownership interest 
        in the land and may have different ideas about how the land 
        should be used. Interior estimated that out of the 92,000 
        fractionated tracts (representing more than 10 million acres), 
        more than half generated no income in 2006-2011.\30\ For 
        agricultural leases and leasehold mortgages on fractionated 
        lands, BIA regulations require consent from owners of a 
        majority interest in such lands.\31\ However, according to 
        Interior, some allotments have thousands of co-owners, some of 
        whose whereabouts are unknown, which could make it difficult to 
        obtain their permission for an agricultural lease or a 
        leasehold mortgage.\32\
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    \29\ Individual trust and restricted fee land also can be subject 
to a leasehold mortgage with the approval of the Secretary of the 
Interior, like Tribal trust and restricted fee land. In such cases, 
lessees may encounter the same difficulties as described previously for 
leasehold mortgages.
    \30\ Department of the Interior, Land Buy-Back Program for Tribal 
Nations: Initial Implementation Plan (Washington, D.C.: Dec. 18, 2012).
    \31\ 25 CFR  162.207(c), 162.230(a). BIA also may grant an 
agricultural lease on behalf of all of the individual Indian owners of 
a fractionated tract if (1) they cannot agree on a lease within a 
specified time period after BIA's written notification to them of its 
intention to grant an agricultural lease on their behalf and (2) the 
land is not being used by an Indian landowner. 25 CFR  162.209(b).
    \32\ Department of the Interior, Land Buy-Back Program for Tribal 
Nations.

    Additionally, as a result of allotment, many Indian reservations 
contain different land ownership types, creating a ``checkerboard'' 
pattern of lands that can make the establishment and financing of 
large-scale agricultural projects difficult. For example, in addition 
to Tribal and individual trust and restricted fee lands, reservations 
also may include lands that passed out of trust during the allotment 
period and were bought by non-Indians. Thus, multiple tracts within a 
large-scale agricultural project may need to be leased and financed 
separately because they have different owners and may be subject to 
different laws. This can also make legal jurisdiction unclear, which is 
a concern for private lenders financing projects on such lands, as 
discussed below.
    Experts and Tribal stakeholders we interviewed reported that the 
barriers to collateralizing various types of Tribal lands make it 
difficult for Tribes and Tribal members to access different types of 
agricultural loans. Most long-term loans--typically used for larger 
projects--generally need to be secured by real estate, which make these 
inaccessible to Tribes and Tribal members who do not have land that can 
be encumbered. For example, an Indian agricultural producer who 
operates on trust land and wants to build an agricultural facility for 
a value-added operation may not be able to obtain a long-term loan 
unless he or she has other unrestricted land to pledge as collateral. 
In addition, according to the former Executive Director of the 
Intertribal Agriculture Council, when most agricultural producers face 
economic distress, they can pledge land as security and receive an 
extended period of time (20-40 years) to pay off the debt.\33\ Tribal 
members may not have that option, making it difficult to obtain credit 
in an emergency (such as adverse weather). In addition, according to a 
Tribal agriculture expert and three Tribal stakeholders, Tribal trust 
land is not counted as an asset on balance sheets, which may affect an 
agricultural lender's assessment of a borrower's creditworthiness for 
various types of loans.
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    \33\ Breaking New Ground in Agribusiness Opportunities in Indian 
Country, Senate Committee on Indian Affairs, 115th Cong. (Jan. 17, 
2018); statement of Ross Racine, Executive Director, Intertribal 
Agriculture Council.
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Administrative Process Delays May Deter Lenders and Borrowers
    Processes at Interior--particularly at BIA--can increase the amount 
of time it takes to obtain a loan, which can discourage both lenders 
and borrowers, according to Tribal stakeholders and experts. Most of 
the Tribal stakeholders and experts we interviewed told us that Tribal 
members often encounter delays when seeking necessary documentation 
from BIA. For example, for loans involving trust or restricted fee 
lands, BIA needs to provide a title status report to the lender that 
identifies the type of land ownership and current owners. Two Tribal 
stakeholders told us that BIA takes months to produce a certified title 
status report. By that time, the growing season could be over. A 
representative from a Native CDFI serving a Tribe in the Great Plains 
said it can take years to receive these reports. BIA reported that in 
Fiscal Year 2017, it certified 95 percent of land titles within 48 
hours.\34\ However, BIA's performance on this measure has varied 
considerably over the last several years, and BIA officials told us 
that it can take significantly longer to process title status reports 
for complicated cases.
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    \34\ BIA met its 48 hour processing goal in 71 percent and 46 
percent of cases in Fiscal Years 2016 and 2015, respectively. See 
Department of the Interior, U.S. Department of the Interior 2018/2019 
Annual Performance Plan and 2017 Report (Washington, D.C.: Mar. 8, 
2018).
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    Tribal members also can encounter administrative challenges at 
other points in the process. One Native CDFI representative told us she 
found out that BIA did not record a leasehold mortgage when the CDFI 
attempted to foreclose on the loan, which almost prevented the CDFI 
from recovering the loan collateral. In other cases, Interior's 
Appraisal and Valuation Services Office might need to conduct an 
appraisal, such as for an agricultural lease. According to Interior 
policy, these appraisals should be completed within 60 days, but one 
Tribal economic development expert said they routinely take much 
longer.
Lenders Reported Having Legal Concerns about Recovering Collateral 
        Involving Tribal Lands
    As a result of the unique legal status of Tribes, some lenders, 
including FCS associations, reported concerns about their ability to 
recover loan collateral if the borrower defaulted on a loan involving 
Tribal lands. Seven of the 11 FCS associations we contacted told us 
that they had legal concerns of this nature, and six of the 
associations said they had experienced the issues themselves. These 
concerns primarily arise from the following issues:

   Tribal sovereign immunity. Tribes are distinct, independent 
        political communities with certain inherent powers of self-
        government and, as a result of this sovereignty, have immunity 
        from lawsuits. A lender cannot sue to enforce the terms of a 
        loan agreement with a Tribe unless the Tribe waives its 
        sovereign immunity in connection with the agreement. Private 
        lenders therefore might be hesitant to make a loan because they 
        would not be able to sue the Tribe if any disputes arose. We 
        previously reported that Tribes may waive sovereign immunity in 
        agreements or contracts on a case-by-case basis and some Tribes 
        have formed separate companies to conduct business that are not 
        immune from lawsuits.\35\ However, Tribal government officials 
        may decide that waiving the Tribe's sovereign immunity for 
        purposes of enforcing the loan agreement is not in the Tribe's 
        best interest. Additionally, Tribal sovereign immunity would 
        not bar lenders from seeking to foreclose on loans made to 
        individual Tribal members.
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    \35\ GAO, Indian Issues: Observations on Some Unique Factors that 
May Affect Economic Activity on Tribal Lands, GAO-11-543T (http://
www.gao.gov/products/GAO-11-543T) (Washington, D.C.: April 7, 2011).

   Legal jurisdiction. Loans made to Indian Tribes or their 
        members and secured by Tribal lands or collateral located on 
        Tribal lands may be subject to Tribal laws, rather than state 
        laws. In addition, it is sometimes unclear whether Federal, 
        state, or Tribal courts would have jurisdiction in the event of 
        a default or foreclosure. If Tribal laws govern but do not 
        adequately provide for the lender's foreclosure, or if there is 
        not a legal forum to hear the foreclosure lawsuit, lenders may 
        be unable to recover the loan collateral. To address these 
        types of concerns, some Tribes have adopted secured transaction 
        codes modeled after the Uniform Commercial Code, which can help 
        to assure lenders of their ability to recover collateral in the 
        event of default.\36\
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    \36\ Office of the Comptroller of the Currency, Commercial Lending 
in Indian Country: Potential Opportunities in a Growing Market, 
Community Developments Insights (Washington, D.C.: February 2016).

   Unfamiliarity with Tribal laws. Laws and court systems vary 
        among the nation's 573 Tribes, making it more difficult and 
        costly for lenders to learn Tribal laws. For example, one FCS 
        association noted that it has many federally recognized Tribes 
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        in its region, each of which may have different laws.

    If lenders have concerns regarding their ability to recover loan 
collateral in the event of a default, lenders may not make loans 
involving Tribal lands due to concerns that the loan would not meet 
safety and soundness requirements.
Potential Borrowers May Need Assistance with Loan Readiness
    Five Tribal stakeholders we interviewed said some Tribal members 
may need assistance--such as credit repair and technical assistance for 
loan applications--to become ready for agricultural loans. Some Tribal 
members have no credit history, which can be a barrier to obtaining a 
loan. One study found that compared to off-reservation counterparts, 
reservation residents were more likely to have no credit history and 
when credit scores were available, they were lower on average.\37\ Many 
Native CDFIs provide credit builder or credit repair products to help 
Tribal members qualify for larger loans, such as small business 
loans.\38\
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    \37\ Valentina Dimitrova-Grajzl, et al., ``Consumer Credit on 
American Indian Reservations,'' Economic Systems, vol. 39 (2015): p. 
518.
    \38\ First Nations Oweesta Corporation, Snapshot 2018: The Growing 
Native CDFI Movement, accessed April 19, 2019. https://www.oweesta.org/
wp-content/uploads/2018/11/Snapshot-2018-Growing-NCDFI-
Movement_web.pdf.
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    Four Tribal stakeholders we interviewed said members of their 
Tribes sometimes need technical assistance to complete the paperwork 
required for agricultural loans, such as a business plan. One Tribal 
member who owns a ranch told us that the first time he tried to apply 
for a loan, he had trouble completing the required paperwork and 
ultimately chose not to apply. He felt Tribal members seeking credit 
would benefit from assistance in completing loan applications. One 
Native CDFI representative told us that her organization provides 
technical assistance to its borrowers to help them complete loan 
paperwork but noted that commercial lenders often did not provide these 
services.
Barriers Have Limited Commercial Lending on Tribal Lands
    We and others have noted that the barriers described above have 
depressed commercial lending on Tribal lands. In 2010, we found that 
banks were reluctant to do business on Tribal lands because of the 
cumbersome procedures and their lack of experience.\39\ More recently, 
a report for the Department of Housing and Urban Development surveying 
lenders found that BIA processing times were a major challenge in 
making mortgage loans involving Tribal lands.\40\ A Native CDFI 
representative told us that lenders have little incentive to engage in 
a lengthy underwriting process, particularly if the loan is for a small 
amount and if other potential borrowers have less complicated 
circumstances. Some experts have described Tribal lands as ``credit 
deserts.'' \41\ For example, one study of three different areas of 
Tribal lands found that few financial institutions or automated teller 
machines were located on these reservations.\42\ One Native CDFI 
representative told us that in her experience, many people on her 
reservation never had a bank account. She noted that when people do not 
have a bank account, it can be challenging for them to see themselves 
as potential borrowers.
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    \39\ GAO, Native American Housing: Tribes Generally View Block 
Grant Program Effective, but Tracking of Infrastructure Plans and 
Investments Needs Improvements, GAO-10-326 (http://www.gao.gov/
products/GAO-10-326) (Washington, D.C.: Feb. 25, 2010).
    \40\ David Listokin, et al., Mortgage Lending on Tribal Land: A 
Report from the Assessment of American Indian, Alaska Native, and 
Native Hawaiian Housing Needs (Washington, D.C.: January 2017).
    \41\ For example, see Echo Hawk Consulting and Racine.
    \42\ Jorgensen and Akee.
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    Similarly, our analysis found that the land tenure issues, 
administrative process delays, lenders' legal concerns, and loan 
readiness issues can make agricultural loans involving Tribal lands 
more time-consuming and costly to underwrite. For example, one FCS 
association told us that loans involving Tribal lands require 
specialized legal analysis, which may be an additional expense that it 
would not incur for otherwise comparable loans. These same issues can 
increase a lender's exposure to the risks inherent in agricultural 
lending because they can affect the borrower's ability to repay the 
loan, the adequacy of the collateral to secure the loan, and the 
lender's ability to recover the collateral in the event of a 
default.\43\ According to FCA, consistent with the purposes of the Farm 
Credit Act of 1971, the ability of a lender to collect loans is an 
important element of the institution's safety and soundness, and the 
continued availability of credit.
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    \43\ According to the Office of the Comptroller of the Currency, 
the risks associated with agricultural lending are credit, interest 
rate, liquidity, operational, price, compliance, strategic, and 
reputation. See Office of the Comptroller of the Currency, 
Comptroller's Handbook, Safety and Soundness: Agricultural Lending, 
version 1.3 (Washington, D.C.: Oct. 15, 2018).
---------------------------------------------------------------------------
    Finally, some stakeholders said they believe that discrimination 
also contributes to the lack of commercial lending on Tribal lands. 
Four experts, a Tribal stakeholder, and a BIA representative told us 
that they believe that some commercial lenders do not want to make 
loans involving Tribal lands because of bias. As previously discussed, 
the plaintiffs in the Keepseagle case that USDA settled for $760 
million alleged that USDA discriminated against Native American farmers 
and ranchers in certain programs. According to a Tribal economic 
development expert, Tribal members who face discrimination or other 
negative experiences with commercial lenders may share these 
experiences with other Tribal members and deter them from applying for 
credit.
FCS Laws Allow for Lending on Tribal Lands, and Some FCS Associations 
        Reported Lending to Tribes or Tribal Members
    We found that FCS generally has authority to make loans involving 
Tribal lands. Of the 11 FCS associations we contacted with Tribal lands 
in their territories, some reported that they had recently made loans 
to Indian Tribes or their members, and their outreach to these 
populations included support for agricultural education.
FCS Laws Allow for Lending on Tribal Lands
    Generally, FCS has authority to provide a broad range of credit 
services to eligible agricultural producers, which may include Tribes, 
Tribal businesses, and individual Tribal members operating on various 
types of Tribal lands.\44\ However, borrowers must meet various 
eligibility and underwriting criteria that are required by law. For 
example, applicants for agricultural loans must be determined to be 
eligible borrowers, which means they must own agricultural land or be 
engaged in the production of agricultural products, including aquatic 
products.\45\
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    \44\ For example, eligible borrowers can be individual U.S. 
citizens, as well as legal entities established pursuant to the laws of 
any Tribal authority and legally authorized to conduct business. 12 CFR 
 613.3000. Groups of individual Tribal members operating as a 
cooperative also may qualify, provided they meet the criteria set forth 
in 12 CFR  613.3100.
    \45\ Persons furnishing farm-related services also may be eligible. 
See 12 U.S.C.  2017 and 12 CFR  613.3000.
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    Also, long-term real estate loans (which have terms of up to 40 
years) made by FCS institutions must be secured by a first-position 
lien on interests in real estate, thus enabling FCS to obtain ownership 
or control of the land in the event of default.\46\ FCA has determined 
that this statutory requirement can be satisfied, for example, with 
leasehold interests in real estate--such as that held by a Tribal 
member leasing reservation land from a Tribe-provided that the lease 
grants the borrower significant rights to the land, and the loan is 
made on a safe and sound basis.\47\ As noted earlier, BIA regulations 
often limit agricultural leases of Tribal lands to a term of up to 10 
years. In such cases, FCS associations similarly may limit the term of 
the related loan (to less than 10 years). According to FCA, when loans 
are for shorter terms than the leases, the FCS association's first lien 
is preserved, as required by law, and the loan is prudent from a safety 
and soundness perspective.
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    \46\ 12 U.S.C.  2018(a)(2).
    \47\ Farm Credit Administration, ``Mortgage Lending: Does a 
mortgage loan secured by a first lien on rural real estate that an 
eligible borrower leases meet the requirements of section 1.10(a)(2) of 
the Farm Credit Act of 1971?'' Legal Opinion Summary 07-01 (McLean, 
Va.: June 12, 2007).
---------------------------------------------------------------------------
    FCA has not issued written guidance indicating whether interests in 
other types of Tribal lands--such as individual trust or restricted fee 
lands--also satisfy the requirement for a first-position lien on 
interests in real estate. However, FCA has the authority to determine 
what types of interests in real estate will satisfy this requirement. 
Also, according to FCA, there is no statutory requirement that short- 
and intermediate-term loans be secured with interests in real estate; 
such loans instead can be secured by other collateral, such as 
equipment, crops, livestock, and business revenues.
    In addition to making direct loans to agricultural producers, FCS 
has authority to lend to non-FCS institutions, such as commercial banks 
and credit unions, which in turn make agricultural loans to FCS-
eligible borrowers. These other financing institutions are known as 
OFIs.\48\
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    \48\ In particular, FCS generally must assure funding to any 
creditworthy OFI that (1) maintains at least 15 percent of its loan 
volume at a seasonal peak in loans and leases to agricultural 
producers, and (2) establishes a financing relationship with FCS for at 
least 2 years. 12 CFR  614.4540. All such obligations funded through 
FCS must be endorsed with the full recourse or unconditional guarantee 
of the OFI. 12 CFR  614.4570. According to the 2017 FCS Annual Report, 
FCS had outstanding loan volume to OFIs of $857 million as of December 
31, 2017. This amount represented less than \1/2\ of 1 percent of FCS's 
loan portfolio. FCS also may partner with non-FCS lenders through loan 
syndications and participations, typically to reduce credit risk and 
comply with lending limits. Also, under its similar-entity authority, 
FCS may participate with non-FCS lenders that originate loans to those 
who are not eligible to borrow directly from FCS, but whose activities 
are functionally like those of eligible borrowers.
---------------------------------------------------------------------------
    According to FCA, the OFI lending authority allows FCS banks to 
fulfill their mission as a government-sponsored enterprise by enhancing 
the liquidity of OFIs, thereby lowering the cost of agricultural 
credit. As noted earlier, FCS is required to establish programs to 
serve young, beginning, and small farmers and ranchers, but it is not 
statutorily mandated to focus on providing financial opportunities to 
any other group of eligible agricultural producers.
    Notwithstanding the authorities described above, FCS must comply 
with other applicable laws and requirements. For example, FCS 
institutions are subject to safety and soundness oversight by FCA, 
including with respect to loan underwriting. FCS institutions also must 
comply with applicable Federal, state, and Tribal laws governing any 
Tribal lands or property thereon used as loan collateral. FCS 
associations may obtain Farm Service Agency guarantees on loans to 
borrowers who otherwise may not meet FCS underwriting requirements. 
However, by law, loans made by FCS associations are not eligible for a 
similar BIA loan guarantee program.\49\
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    \49\ FCS associations are instrumentalities of the Federal 
Government and thus their loans are ineligible for BIA guaranties. 12 
U.S.C.  2071, 2091; 25 U.S.C.  1486, 25 CFR  103.10.
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Some FCS Associations Reported Lending to Indian Tribes or Their 
        Members, and Selected Associations' Outreach to These 
        Populations Included Education
Lending
    Based on information from selected FCS associations located near 
Tribal lands, some FCS associations have lent to Indian Tribes or their 
members in the last 2 years.\50\ Of the 11 FCS associations we 
contacted with Tribal lands in their territories, representatives of 
eight told us they had loaned to Tribes or their members in the last 2 
years--primarily to individual Tribal members. We made the following 
observations based on the associations' responses:
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    \50\ We sent questionnaires to the associations on March 14, 2019. 
Therefore, the ``last 2 years'' generally would refer to loans made 
since March 2017.

   Limited data on lending amounts. Representatives of ten of 
        the 11 FCS associations we queried stated that they either do 
        not collect or do not maintain data on lending to specific 
        racial populations, thus making it difficult to provide more 
        detailed information on lending to Indian Tribes and their 
        members.\51\ However, four representatives provided estimates 
        of their recent lending to this population on Tribal lands. One 
        association cited more than $25 million in total loans 
        outstanding to a small number of Tribes and Tribal entities. 
        Another association reported making about $5.5 million in new 
        loans to Tribes or their members on Tribal lands in the last 2 
        years. A third reported a $3 million revolving line of credit 
        to a family farm, and the fourth said it had made approximately 
        $150,000 in five separate loans to two Tribal members.
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    \51\ A representative of the remaining association stated that the 
association collects data related to all of its lending, including 
loans to Indian borrowers. As noted earlier, creditors are generally 
prohibited from inquiring about the race and other personal 
characteristics of an applicant for a credit transaction that is 
subject to the Equal Credit Opportunity Act. 12 CFR  1002.5(b). One 
exception is that creditors may collect such data from credit 
applicants in order to assess the creditor's compliance with the Equal 
Credit Opportunity Act. However, lenders may not use this information 
in decisions about whether to provide credit or when setting the terms 
of the credit.

   Loan purposes. Seven associations reported on the type of 
        credit they extended to Indian Tribes and their members on 
        Tribal lands. In general, they made short-term operating loans 
        and short- and intermediate-term loans for the purchase or 
        refinance of items such as machinery and equipment, livestock, 
        vehicles, or buildings and improvements. Two associations also 
        reported making long-term real estate loans. The other 
        association that reported lending to Tribes or their members 
---------------------------------------------------------------------------
        did not report on the types of loans it made.

   Type of collateral. Representatives of the eight 
        associations that reported lending to Tribes or their members 
        all indicated that the associations secured loans with personal 
        property, such as crops, livestock, or equipment. In addition, 
        the associations that reported making real estate loans said 
        they secured the loans with fee-simple land.

    Representatives of three FCS associations said they had not loaned 
to Indian Tribes in the past 2 years. One association had not received 
any credit applications from Tribal members, and another could not say 
if it had served Tribal members because of a lack of racial data on 
borrowers.\52\ The third association had not provided loans to Tribal 
members in the past 2 years, but the representative stated that it 
provided several letters of credit to guarantee the payments of BIA 
leases on Tribal land.
---------------------------------------------------------------------------
    \52\ As noted earlier, in cases that did not involve lending, the 
U.S. Supreme Court has ruled that membership in a federally recognized 
Indian Tribe is a political, not a racial, classification.
---------------------------------------------------------------------------
    Although the FCS associations we contacted stated they have the 
resources to lend to Tribes and their members on Tribal lands, a few 
key factors affect their lending decisions. Representatives of all 11 
FCS associations stated their associations had adequate financial 
capacity and resources to make potentially more complicated or time-
consuming loans, such as those involving Tribal lands. In general, they 
stated that the factors they consider in deciding whether to loan to 
Indian Tribes or their members on Tribal lands are the same as for any 
comparable loan--for example, creditworthiness, loan purpose, and the 
ability to secure a lien on collateral. However, as described earlier, 
some FCS association representatives described challenges related to 
Tribal law, jurisdiction, Tribal sovereign immunity, and recovery of 
collateral as complicating the lending process to Indian Tribes and 
their members on Tribal lands. Although three of the 11 FCS 
associations we queried reported making loans to Tribes that had waived 
their sovereign immunity for those contracts, most loans the 
associations reported were to individual Tribal members and secured by 
personal property or fee-simple land.
    According to two Tribal stakeholders we interviewed, Indian Tribes 
or Tribal members who received loans from FCS or other commercial 
lenders may have larger agricultural operations, a longer credit 
history, and property that can be more easily used as collateral. For 
example, an established rancher may be able to secure operating loans 
with his or her cattle herd or interests in fee-simple land, thus 
preventing the need to rely on trust land as collateral.
Outreach
    At the national level, FCS--through its trade association, the Farm 
Credit Council--conducts and facilitates outreach to Tribes and Tribal 
stakeholder groups. According to a representative of the Farm Credit 
Council, the Council and representatives of associations with Tribal 
lands in their territories participate in an informal FCS working group 
focused on outreach and lending on Tribal lands. One association 
representative described the group as sharing examples of lending 
success or reasons for missed opportunities; local, regional or 
national sponsorship opportunities; local or regional agricultural 
education events; and relevant legal proceedings, such as the 
Keepseagle settlement.
    At the institution level, FCS associations must prepare annual 
marketing plans describing, among other things, how they will be 
responsive to the credit needs of all eligible and creditworthy 
agricultural producers in their respective territories, with a focus on 
diversity and inclusion.\53\ The marketing plan must detail strategies 
and actions to market their products and services to potential 
borrowers who may not have been considered previously for reasons other 
than eligibility or creditworthiness. However, FCS associations are not 
required to achieve specific outcomes or quantifiable results.
---------------------------------------------------------------------------
    \53\ FCS marketing plans are also required to include strategies 
and actions to promote diversity and inclusion within the association's 
workforce and management, on the basis that diverse perspectives within 
institutions can help increase diversity among customers. See, 
generally, 12 CFR  618.8440 and 77 Fed. Reg. 25577 (May 1, 2012).
---------------------------------------------------------------------------
    Our nongeneralizable review of the marketing plans of the 11 
selected FCS associations with Tribal lands in their territories and 
our analysis of their written responses to our queries for additional 
information found that outreach to Tribes and their members focused on 
educational and charitable initiatives and direct marketing about 
agricultural lending, or did not directly target Tribal populations.

   Seven of the 11 associations discussed actual or planned 
        outreach to Indian Tribes or their members in their marketing 
        plans or written responses.

     Four of those seven associations cited financial 
            support of specific agricultural education activities for 
            Tribes and their members. Two associations reported making 
            charitable donations that benefited Tribal members.

     Four of the seven associations reported direct 
            marketing to potential Tribal borrowers. However, in one 
            case, the marketing was a one-time conversation with a 
            Tribe regarding financing for a new facility. The other 
            three associations reported that they called potential 
            Indian borrowers, sought referrals from existing Tribal 
            member customers, or conducted meetings with Tribal 
            government officials.

   In general, the four remaining associations, in their 
        marketing plans and written responses, addressed outreach to 
        minority producers through broader methods, such as 
        participation in ethnic group organizations or through 
        inclusion in the association's overall outreach and marketing 
        efforts. In addition, five of the 11 associations discussed 
        outreach to minority producers in conjunction with their 
        statutorily-mandated outreach to young, beginning, and small 
        farmers. According to FCA officials, FCA's guidance on 
        providing credit to young, beginning, and small farmers, as 
        well as to local food producers, would be broadly applicable to 
        socially disadvantaged or minority populations that fall within 
        the program definitions.

    Most of the Tribal stakeholders with whom we spoke either were not 
familiar with FCS or did not know of the Tribe or any of its members 
receiving FCS loans. One Native CDFI representative noted that although 
he was not familiar with any members of his Tribe receiving FCS loans, 
he thought other nearby Tribes or their members had worked with FCS.
    FCA also encouraged FCS associations to develop underwriting 
procedures to facilitate lending on Indian reservations.\54\ FCA 
identified one FCS association that developed such procedures, and 
another one of the associations we queried noted that they had such 
procedures. The first association provided an overview of its 
procedures, which identified links to information on borrower and 
collateral eligibility and actions that require BIA approval, among 
other topics. According to representatives of the second association, 
its procedure manual directs loan officers to treat Tribal members' 
applications for loans secured by personal property the same as any 
other applications. In addition, they said the manual contains 
instructions for working with BIA for real estate loans to Tribal 
members on trust land and for making direct loans to Tribes.
---------------------------------------------------------------------------
    \54\ In general, lenders must comply with applicable fair lending 
laws, including the Equal Credit Opportunity Act. For example, with 
regard to mortgage lending in Indian Country, the Office of the 
Comptroller of the Currency has stated that while lenders may consider 
risks and costs in setting the terms and conditions for loans, the 
procedures should be based on documented differences in risks and 
costs, rather than speculative or generalized assumptions. See Office 
of the Comptroller of the Currency, Guide to Mortgage Lending in Indian 
Country (Washington, D.C.: 1997). FCA took a similar position in the 
past, when it evaluated an institution's procedures for lending on 
Indian reservations. In that case, the institution's procedures 
required additional security in the form of government guarantees on 
any loan for which reservation land was pledged as collateral. The 
association based the additional security requirement in part on 
generalized concerns that Tribal courts were inadequate forums in which 
to recover collateral, rather than evidence regarding the courts of the 
specific Tribe in question. FCA ultimately determined that the 
institution's procedures were not consistent with the Equal Credit 
Opportunity Act, and required that the procedures be withdrawn.
---------------------------------------------------------------------------
Stakeholders Discussed Lender Partnerships, Loan Guarantees, and Other 
        Options to Improve Agricultural Credit Access on Tribal Lands
    Our review of literature and interviews with experts, Tribal 
stakeholders, FCS associations, Farm Credit Council representatives, 
and FCA officials identified the following options for improving access 
to agricultural credit on Tribal lands.

   Partnerships with local lenders. Tribal economic development 
        experts and Tribal stakeholders cited the importance of 
        commercial or government lenders partnering with Native CDFIs 
        and other Indian-owned lenders, which are the most capable of 
        navigating the challenges related to Indian agricultural 
        credit. According to these experts and stakeholders, if larger 
        commercial or government lenders worked with Native CDFIs or 
        other Tribal lenders (such as Tribal banks or economic 
        development corporations) to provide funds or conduct outreach, 
        the Tribal organizations could more efficiently reach Indian 
        Tribes and their members. They noted these organizations are 
        familiar with Tribal members and the administrative processes 
        for obtaining loans on Tribal land. Partnership with Tribal 
        lenders and other Tribal businesses also could support Tribes' 
        efforts to improve members' loan readiness, according to 
        literature we reviewed and a Tribal economic development expert 
        and a Native CDFI representative we interviewed.\55\
---------------------------------------------------------------------------
    \55\ The executive director of a Native CDFI has noted that because 
Native CDFIs are mission-driven, they offer development services--such 
as financial education and business training--that banks do not. See 
Tanya Fiddler, ``Working Together: Effective Partnerships between 
Native CDFIs and Banks Bridge the Financing Gap in Indian Country'' 
August 2013, accessed on March 21, 2019. https://www.occ.gov/
publications/publications-by-type/other-publications-reports/cdi-
newsletter/extending-credit-indian-country-aug-2013/indian-country-
ezine-article-7-working-together.html. In addition, a 2017 study on 
mortgage lending on Tribal lands similarly noted the importance of 
commercial lenders partnering with Tribes and local nonprofits serving 
Tribal members to provide homebuyer education. See David Listokin, et 
al., Mortgage Lending on Tribal Land.

      Commercial and government lenders may need to clarify whether 
        Tribal lenders with which they might partner meet their lending 
        requirements. For example, although FCS banks have authority to 
        lend to OFIs, which in turn can lend to FCS-eligible borrowers, 
        only certain types of CDFIs may qualify as OFIs.\56\ In 
        addition, this authority does not extend to long-term funding, 
        and thus cannot be used to fund agricultural real estate loans 
        made by OFIs.\57\ One FCS bank that commented on a 2004 FCA 
        rule noted the latter statutory limitation as a major 
        impediment to OFI program expansion.
---------------------------------------------------------------------------
    \56\ OFIs can include banks, credit unions, agricultural credit 
corporations, and certain other entities engaged in the making of loans 
to agricultural producers. 12 U.S.C.  2015(b)(1)(B) and 12 CFR  
614.4540. The preamble to an FCA rule confirms that CDFIs that are 
community development banks or community development credit unions 
could qualify as an OFI. 69 Fed. Reg. 29852, 29860 (May 26, 2004). 
However, most Native CDFIs operate as loan funds chartered as state 
corporations, the eligibility of which the preamble to the FCA rule did 
not address.
    \57\ 69 Fed. Reg. 29852, 29859 (May 26, 2004).

   Flexibility with collateral requirements. As noted earlier, 
        multiple stakeholders we interviewed discussed the challenges 
        related to collateralizing trust land. In addition, FCA 
        officials cited the need for a statutory change or 
        clarification of the requirement that long-term loans made by 
        FCS be secured by a first lien on interests in real estate.\58\ 
        They said that by removing or clarifying this requirement, 
        lenders would have authority to provide larger, longer-term 
        loans to creditworthy Tribes or Tribal members who cannot 
        mortgage their Tribal lands.
---------------------------------------------------------------------------
    \58\ Two FCS stakeholders called for statutory or regulatory 
clarification on whether leasehold interests in real estate can satisfy 
this statutory requirement. But as noted earlier, FCA already published 
a legal opinion to that effect (07-01).

   Guarantees. Some stakeholders we interviewed mentioned loan 
        guarantees as an option to improve access to agricultural 
        credit on Tribal lands. For instance, FCA officials and Farm 
        Credit Council representatives told us they had spoken with 
        leadership of the Native American Agriculture Fund (created as 
        part of the Keepseagle settlement) regarding the potential 
        establishment of a loan guarantee fund, such as a first-loss 
        fund, which would step in to purchase a loan in default (thus 
        substantially reducing credit risk to the lender). In addition, 
        three of the 11 FCS associations we queried identified 
        guarantees as a possible way to increase FCS lending to Indian 
---------------------------------------------------------------------------
        Tribes and their members on Tribal lands.

      FCS associations still face challenges in using guarantees. With 
        regard to the first-loss loan guarantee fund, FCS associations 
        still must adhere to the FCS statutory requirement for a first-
        position lien on interests in real estate for long-term loans. 
        According to an FCA official, although the first-loss loan 
        guarantee fund could mitigate repayment risk, a statutory 
        change or clarification would be necessary for FCS associations 
        to accept guarantees in lieu of real estate for long-term 
        loans. And as noted earlier, FCS loans are statutorily 
        ineligible for BIA's loan guarantee program. Two FCS 
        associations noted that removal of this restriction could 
        increase FCS lending on Tribal lands. Finally, FCA officials 
        stated that challenges FCS associations face in making loans 
        involving Tribal lands also can extend to Farm Service Agency 
        guarantees on those loans. In other words, to obtain such 
        guarantees, FCS associations must navigate issues around land 
        tenure, legal jurisdiction, and Tribal laws.

   Tribal options. In addition, stakeholders discussed the 
        following Tribal actions that could increase credit access for 
        Tribes and their members:

     Representatives of two FCS associations noted that 
            waivers of sovereign immunity (limited to specific 
            contracts) by Tribes may increase lending involving Tribal 
            lands, as it helps to enable lenders to enforce the terms 
            of loans made to Tribes. According to the Office of the 
            Comptroller of the Currency, some banks have negotiated 
            limited waivers of sovereign immunity (restricted to a 
            specific transaction). As noted earlier, Tribes may decide 
            that waiving sovereign immunity is not in their best 
            interest. In addition to the limited waivers of sovereign 
            immunity, representatives of three FCS institutions stated 
            that increased adoption of uniform commercial laws (such as 
            the Uniform Commercial Code) by Tribes could increase 
            lending involving Tribal lands.

     One Tribal economic development expert told us that 
            Tribes that adopted their own leasing regulations under the 
            HEARTH Act have seen substantially increased economic 
            development. As noted earlier, the HEARTH Act provides 
            Tribes with greater flexibility to enter into leases for 
            agriculture or other purposes. Once a Tribe's leasing 
            regulations have been approved by the Secretary of the 
            Interior, Tribes may negotiate and enter into agricultural 
            leases with 25 year terms without further approval by the 
            Secretary.\59\ The combination of longer lease terms and 
            the ability to conduct business outside of the BIA approval 
            process can expedite the process of obtaining a leasehold 
            mortgage on Tribal trust and restricted fee land. As of May 
            1, 2019, the Secretary had approved agricultural leasing 
            regulations for seven Tribes under the HEARTH Act.\60\
---------------------------------------------------------------------------
    \59\ 25 U.S.C.  415(h).
    \60\ In addition, the Secretary of the Interior approved the Navajo 
Nation's agricultural leasing regulations pursuant to other statutory 
authority, thus allowing the Tribe to lease its trust and restricted 
fee land for agricultural purposes without Secretarial approval. 25 
U.S.C.  415(e). We recently reported BIA's review and approval process 
for 42 proposed leasing regulations that Tribes submitted in 2012-2017 
often took at least a year. We recommended that Interior and BIA 
develop a clearly documented process with established time frames for 
each step in the process for reviewing proposed Tribal leasing 
regulations submitted under the HEARTH Act. Interior concurred with the 
recommendation but had not implemented it as of May 2019. See GAO, 
Indian Programs: Interior Should Address Factors Hindering Tribal 
Administration of Federal Programs, GAO-19-87 (http://www.gao.gov/
products/GAO-19-87) (Washington, D.C.: Jan. 3, 2019).
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Agency Comments
    We provided a draft of this report to FCA, Interior, and USDA for 
review and comment. FCA and USDA provided technical comments, which we 
incorporated as appropriate. In comments provided in an email, Interior 
officials noted that efforts to simplify the Secretary of the 
Interior's approval process could provide faster mortgage 
determinations and thus may result in expanded lending and production 
opportunities for Indian agricultural producers.
    We are sending copies of this report to the appropriate 
congressional committees, the Chairman and Chief Executive Officer of 
the Farm Credit Administration, the Secretary of the Interior, and the 
Secretary of Agriculture. In addition, the report is available at no 
charge on the GAO website at http://www.gao.gov.
    If you or your staff have any questions about this report, please 
contact me at (202) 512-8678 or [email protected]. Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this report. GAO staff who made key contributions 
to this report are listed in appendix II.


Alicia Puente Cackley,
Director, Financial Markets and Community Investment.
Appendix I: Objectives, Scope, and Methodology
    Our objectives in the report were to describe (1) what is known 
about the agricultural credit needs of Indian Tribes and their members 
on Tribal lands, (2) the barriers stakeholders and experts identified 
that Indian Tribes and their members on Tribal lands face in obtaining 
agricultural credit to meet their needs, (3) the Farm Credit System's 
(FCS) lending authority and lending and outreach activities on Tribal 
land, and (4) suggestions stakeholders have discussed to improve access 
to agricultural credit on Tribal lands.
    For the purpose of this report, we use the term ``Tribal lands'' to 
refer to reservations (including all land within the reservations' 
boundaries), trust land, allotments, and restricted fee land. In 
general, our report focuses on the agricultural credit needs of Tribes 
and their members in the lower 48 states.
    To describe what is known about the agricultural credit needs of 
Indian Tribes and their members on Tribal lands, we explored various 
potential data sources on agricultural loans that Indian Tribes and 
their members applied for or received. We reviewed available data from 
the Consumer Financial Protection Bureau and Department of Agriculture 
(USDA). For example, we obtained borrower-reported loan data from 
USDA's Agricultural Resource Management Survey, but for several data 
fields related to Indian producers on Tribal lands, sample sizes were 
too small or the coefficients of variation were too high to produce 
reliable estimates. We also reviewed provisions of the Equal Credit 
Opportunity Act, Federal regulations, and other legal documentation 
pertaining to collection of data regarding the personal characteristics 
of applicants for nonresidential loans.
    To describe what is known about Indian Tribes and their members' 
agricultural credit needs and the barriers they face in obtaining 
agricultural credit, we conducted a literature review. We conducted 
searches of various databases, such as EBSCO, ProQuest, Google Scholar, 
and Westlaw to identify sources such as peer-reviewed academic studies; 
law review articles; trade and industry articles; reports from 
government agencies, nonprofits, and think tanks; and Congressional 
transcripts related to Tribal agriculture, barriers to accessing credit 
on Tribal lands, and FCS. We identified additional materials through 
citations in literature we reviewed. In addition, we reviewed statutes 
and the Department of the Interior's Bureau of Indian Affairs' (BIA) 
regulations related to use and ownership of Tribal lands, including 
leasing.
    To describe FCS's authority and lending and outreach activities on 
Tribal lands, we reviewed statutes and regulations governing FCS, as 
well as written guidance issued by the Farm Credit Administration 
(FCA). We also reviewed the marketing plans of a nongeneralizable 
sample of 11 FCS associations (16 percent of the 69 FCS associations 
that lend directly to agricultural producers) whose territories 
included large Tribal land areas with high levels of agricultural 
activity, including the Tribes we interviewed (described below). We 
selected an additional FCS association but on closer review realized it 
did not have a significant amount of Tribal land in its territory; we 
therefore excluded this association from our analysis. For comparison 
purposes, we also reviewed three marketing plans from FCS associations 
that did not have significant Tribal populations in their territories. 
In addition to reviewing the marketing plans, we sent the 11 FCS 
associations a questionnaire about their lending and outreach to Tribes 
and their members and any challenges in making loans involving Tribal 
lands. We also asked these associations about any suggestions to 
improve access to agricultural credit on Tribal lands. We received 
responses from all 11 FCS associations, and followed up with some 
associations to clarify information they provided. While the sample 
allowed us to learn about many important aspects of FCS associations' 
lending and outreach to Tribes and their members on Tribal lands, it 
was designed to provide anecdotal information, not findings that would 
be representative of all of 69 FCS lending associations.
    To address all four objectives, we attempted to interview 
representatives of six Tribes. First, we selected these Tribes to 
represent five regions (Great Plains, Rocky Mountain, Northwest, 
Southwest) and a state (Oklahoma) that--according to experts we 
interviewed--have Tribes engaged in agricultural activity. Within these 
regions, we generally selected large Tribal land areas that have high 
levels of agricultural activity, as indicated by the USDA 2012 Census 
of Agriculture data.\1\ Specifically, we selected Tribes based on 
number of farms, land in farms, and market value of agricultural 
products. In addition, we selected one of the six Tribes because two 
experts recommended that we speak with them. For the six Tribes, we 
contacted Tribal government leaders and employees of the relevant 
government offices, such as the agriculture or Tribal lands 
departments.
---------------------------------------------------------------------------
    \1\ Department of Agriculture, 2012 Census of Agriculture: American 
Indian Reservations, Subject Series, Part 5, AC-12-S-5 (Washington, 
D.C.: August 2014).

   For two of the six Tribes, we interviewed employees of the 
        Tribal agriculture department. One of these interviews also 
        included representatives of the Native Community Development 
        Financial Institution (Native CDFI) that serves the 
---------------------------------------------------------------------------
        reservation.

   For the third Tribe, we received written responses from a 
        Tribal farm.

   For the fourth Tribe, we interviewed a representative of the 
        Native CDFI that serves the reservation.

   For this series of interviews, we only received information 
        relating to four Tribes. We did not obtain meetings with 
        relevant Tribal government officials for the last two Tribes.

    We also contacted farms or Native CDFIs associated with an 
additional three Tribes based on USDA data or recommendations from 
experts we interviewed. For one of these Tribes, we interviewed a 
Tribal farm employee and a representative of the Tribe's community 
development corporation. For the second Tribe, we interviewed a Tribal 
farm employee. For the third Tribe, we interviewed a representative of 
the Native CDFI that serves the reservation.
    In summary, we interviewed employees of two Tribal agriculture 
departments, employees of three Tribal farms, and representatives of 
three Native CDFIs and one Tribal community development corporation. 
Throughout this report, we refer to Tribal government employees, Tribal 
farm employees, or representatives of Native CDFIs or community 
development corporations serving a Tribe as ``Tribal stakeholders.'' 
Although the information we obtained from the Tribal agriculture 
employees allowed us to provide anecdotal Tribal perspectives, it is 
not generalizable to the 573 federally recognized Indian Tribes. In 
addition, the views of Tribal farm employees and Native CDFI and 
community development corporation representatives cannot be generalized 
to Tribes but illustrate views on needs, barriers, and other issues 
from the perspectives of the organizations.
    In addition, for all four objectives, we interviewed the following:

   Experts on agricultural and economic development on Tribal 
        lands. We interviewed subject matter experts on Tribal 
        agriculture and economic development from various 
        organizations, including advocacy and academia. Specifically, 
        we interviewed representatives of the following organizations: 
        the Center for Indian Country Development at the Federal 
        Reserve Bank of Minneapolis, First Nations Oweesta Corporation, 
        the Indian Land Tenure Foundation, the Indigenous Food and 
        Agriculture Initiative at the University of Arkansas, the 
        Intertribal Agriculture Council, and the Native American 
        Agriculture Fund. We selected these organizations based on 
        relevant publications, testimonies before Congress, or 
        recommendations from other experts. These organizations work 
        with a number of Tribes and thus could speak to general trends 
        or commonalities in Tribal agriculture and economic 
        development. Throughout the report, we refer to the 
        representatives of these organizations as ``experts.''

   Agency and trade group representatives. We interviewed 
        officials from FCA, USDA (including the Farm Service Agency, 
        Economic Research Service, and National Agricultural Statistics 
        Service), and BIA. We also interviewed representatives of the 
        Farm Credit Council, the national trade association for the 
        Farm Credit System.

    We conducted this performance audit from December 2018 to May 2019 
in accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe that 
the evidence obtained provides a reasonable basis for our findings and 
conclusions based on our audit objectives.
Appendix II: GAO Contact and Staff Acknowledgments
GAO Contact
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Staff Acknowledgements
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Director), Lisa Reynolds (Analyst in Charge), Miranda Berry, Tom Cook, 
Anne-Marie Fennell, John Karikari, Marc Molino, Kirsten Noethen, 
Barbara Roesmann, Jeanette Soares, and Farrah Stone made significant 
contributions to this report.
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                                 ______
                                 
                          Submitted Questions
Response from Hon. Thomas ``Tom'' J. Vilsack, Secretary, U.S. 
        Department of Agriculture
Questions Submitted by Hon. Alma S. Adams, a Representative in Congress 
        from North Carolina
    Question 1. Secretary Vilsack, with more than 5,700 operations, 
North Carolina ranks second in the U.S. for total poultry and egg 
production.
    As I've raised before, in a state where the population is 22 
percent Black, only 57 of farms have an African American principal 
producer. That's less than one percent.
    As you're aware, there are allegations of Black farmers being 
discriminated against through poultry contract grower relationships, 
and that some stakeholders are concerned that the final rule issued by 
the previous Administration does not go far enough to protect contract 
growers, particularly contract growers of color.
    Mr. Secretary, will you commit to continuing to work on this 
important issue to ensure Black farmers and other farmers of color are 
not discriminated against in their production contracts?
    Answer. Yes, I am fully committed to ensuring that farmers of color 
are not discriminated against in production contracts. To that end, we 
are hard at work preparing proposed rules under the Packers and 
Stockyards Act to set clear, enforceable rules of the road that protect 
Black farmers and farmers of color to the greatest extent possible. We 
have also announced a new enforcement policy, via Frequently Asked 
Questions, that addresses the problematic aspects of a Packers and 
Stockyards Act rule published by the previous administration. This new 
enforcement policy highlights USDA's intent to utilize other provisions 
of the Packers and Stockyards Act to the fullest extent of the law to 
protect producers from racial discrimination, retaliation, and denial 
of associational rights. Throughout this process, we are in contact 
with a wide range of stakeholders in the poultry industry to better 
understand their concerns and are committed to monitoring the facts on 
the ground to more quickly and better address these issues as they 
emerge. We invite those who are facing these challenges to contact us, 
including anonymously as appropriate. (https://www.ams.usda.gov/rules-
regulations/packers-and-stockyards-act/faq)
                               attachment
[https://www.ams.usda.gov/rules-regulations/packers-and-stockyards-act/
faq]




Frequently Asked Questions on the Enforcement of Undue and Unreasonable 
        Preferences under the Packers and Stockyards Act
August 2021
          9 CFR  201.211  Undue or unreasonable preferences or 
        advantages.\1\
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    \1\ https://www.ecfr.gov/cgi-bin/text-
idx?c=ecfr&SID=b74225c6eb76359a245b8953706e6916&
rgn=div5&view=text&node=9:2.0.1.1.2&idno=9#se9.2.201_1211.
    Editor's note: references annotated with  are retained in 
Committee file.
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          Packers and Stockyards Act 9 CFR  201-206 \2\
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    \2\ https://www.ecfr.gov/cgi-bin/text-
idx?c=ecfr&SID=b74225c6eb76359a245b8953706e6916&
rgn=div5&view=text&node=9:2.0.1.1.2&idno=9#se9.2.201_1211.
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          Visit the Packers and Stockyards Act webpage \3\
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    \3\ https://www.ams.usda.gov/rules-regulations/packers-and-
stockyards-act.
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General Policy
    Question: What is the Packers and Stockyards Act?

    Answer: The Packers and Stockyards Act (the P&S Act or the Act) 
promotes fairness and competition in livestock, meat, and poultry for 
the benefit of producers, growers, and the public. The Act also 
provides payment protection and prohibits deception and fraud in the 
livestock, meat, and poultry industries. The U.S. Department of 
Agriculture's (USDA) Packers and Stockyards Division (PSD), located 
within the Agricultural Marketing Service (AMS), is charged with 
enforcing the Act and protecting the rights of livestock producers and 
poultry growers under the Act.

    Question: Why did USDA develop a rule on undue and unreasonable 
preferences? Is it all that USDA will be doing on undue preferences?

    Answer: The 2008 Farm Bill (Title XI of the Food, Conservation and 
Energy Act of 2008)(P.L. 110-246), required USDA to write regulations 
under the P&S Act's provisions that prohibit packers, swine 
contractors, and live poultry dealers from engaging in undue 
preferences to some over others in the livestock and poultry 
industries. The rule ``Undue and Unreasonable Preferences and 
Advantages'' was finalized in December 2020 and became effective in 
January 2021. Since then, USDA has announced its intent to update those 
and other provisions through a series of three rulemakings under the 
P&S Act. However, until those new rulemakings are complete, the 
December 2020 final rule remains in effect. (USDA, ``USDA to Begin Work 
to Strengthen Enforcement of the Packers and Stockyards Act,'' \4\ 
Press Release, June 11, 2021.)
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    \4\ https://www.usda.gov/media/press-releases/2021/06/11/usda-
begin-work-strengthen-enforcement-packers-and-stockyards-act.

    Question: What are the criteria established in the December 2020 
---------------------------------------------------------------------------
final rule?

    Answer: The final rule established four criteria the Secretary of 
Agriculture will consider when determining whether conduct by packers, 
swine contractors or live poultry dealers represents an undue or 
unreasonable preference or advantage. Those criteria include whether 
the preference or advantage cannot be justified on the basis of a cost 
savings related to dealing with different producers, sellers, or 
growers; cannot be justified on the basis of meeting a competitor's 
prices; cannot be justified on the basis of meeting other terms offered 
by a competitor; and cannot be justified as a reasonable business 
decision. However, as elaborated below, the criteria are not exhaustive 
and not determinative. (Agricultural Marketing Service, USDA, ``Undue 
and Unreasonable Preferences and Advantages Under the Packers and 
Stockyards Act,'' \5\ Final Rule, December 11, 2020.)
---------------------------------------------------------------------------
    \5\ https://www.federalregister.gov/documents/2020/12/11/2020-
27117/undue-and-unreasonable-preferences-and-advantages-under-the-
packers-and-stockyards-act.

    Question: How will PSD enforce the criteria in the December 2020 
final rule? Will some criteria be weighed more heavily than others? Can 
---------------------------------------------------------------------------
other criteria be considered?

    Answer: Section 201.211 of the final rule lists the criteria for 
consideration and provides that ``the Secretary [of Agriculture] is not 
limited to those four . . . [T]he Secretary may also consider other 
factors relevant to each situation on a case-by-case basis.'' That is, 
the criteria are not exhaustive and not determinative. PSD will enforce 
the provisions of the regulation by reviewing the specific facts of 
each case to determine how it is handled. Certain circumstances will 
require some criteria to be weighted more than others, including 
criteria not specifically listed. The criteria listed in the final rule 
are not a safe harbor, and a finding regarding one of them will not 
eliminate potential liability under the P&S Act should other criteria 
suggest violations.

    Question: Do the criteria also apply to ``unfair, unjustly 
discriminatory or deceptive practices and devices'' that are prohibited 
in Section 202(a) of the Packers and Stockyards Act?

    Answer: No. The criteria were written to respond to the 2008 Farm 
Bill requirement that the Secretary develop criteria to consider when 
determining if an undue or unreasonable preference or advantage has 
occurred in violation of the P&S Act. Unfair, unjustly discriminatory, 
and deceptive practices and devices are not specifically included under 
these criteria.

    Question: How does PSD decide if an unfair, unjustly 
discriminatory, or deceptive practice or device has occurred in 
violation of the Act?

    Answer: PSD considers potential violations of Section 202(a) of the 
P&S Act on a case-by-case basis. Some conduct is deemed ``unfair'' 
under the Act, such as failing to timely pay for livestock and poultry 
purchases. (See Section 409, P&S Act.) Other conduct is ``unfair'' 
based upon enforcement cases and PSD regulations. PSD investigates and 
gathers evidence to decide if a violation has occurred. Additionally, 
many practices that PSD considers undue prejudices may also be 
evaluated by PSD as unfair, unjustly discriminatory, or deceptive 
practices under Section 202(a) of the P&S Act.

    Question: Is Packers and Stockyards Act analysis limited by the 
``rule of reason'' approach under antitrust laws such as Section One of 
the Sherman Act?

    Answer: The December 2020 rule states PSD may consider the ``rule 
of reason'' approach described in cases such as Chicago Board of Trade 
v. United States, 246 U.S. 231 (1918), but also that it is not limited 
by or to that analysis and it maintains a flexible approach. Like the 
Sherman Act, the statute is textually susceptible to both ``rule of 
reason'' type analysis, but also ``per se'' rules for certain types of 
conduct. The unique circumstances applicable to the markets where PSD 
investigates or has enforcement authority also inform the competition 
analysis in distinct and important ways, including allowing for 
simplified competitive effects analysis where common market 
characteristics inform consideration of specific types of conduct. In 
addition, the PSD has long taken the position that a violation of 
section 202(a) or (b) of the P&S Act may be established without proving 
an industry-wide injury to competition. Moreover, the December 2020 
final rule does not determine what evidence would be required or 
necessarily used in a court of law. The future rulemakings, mentioned 
above, are expected to elaborate on these points.
Discrimination and Retaliation
    Question: How would PSD handle a case where a packer, swine 
contractor, or poultry company withheld a contract offer or cancelled 
or terminated a contract on the basis of race, color, national origin, 
sex, religion, age, disability, political beliefs, sexual orientation, 
or marital or family status, where the producer or grower was capable 
of meeting the terms of the contract?

    Answer: PSD would investigate as, based on the information 
provided, the contract termination may have violated Sections 202(a) 
and/or 202(b) of the P&S Act. As the December 2020 final rule noted, 
``Issues of retaliation and racial discrimination typically would arise 
in complaints of undue or unreasonable prejudices or disadvantages.''

    Question: Is retaliation prohibited? For example, if a producer or 
grower makes public statements criticizing a packer, swine contractor, 
or poultry company, and the packer or poultry company in turn 
terminates an existing contract with the producer or grower, would that 
contract termination be an unfair practice?

    Answer: The December 2020 final rule noted, ``Existing law 
prohibits retaliation.. Issues of retaliation. typically would arise in 
complaints of undue or unreasonable prejudices or disadvantages.'' PSD 
will investigate allegations of coercion, intimidation, or retaliation 
against any producer or grower as termination of a contract under such 
circumstances may violate Sections 202(a) and/or 202(b) of the P&S Act.
Industry-specific Circumstances: Poultry
    Question: I have a poultry growing (broiler) house that does not 
have the latest technology that some of the other growers in the local 
area have. (A) When it came time to renew my poultry growing contract, 
the poultry company cut the number of birds placed on the farm, offered 
me a lower contract price, or threatened to terminate the contract, 
unless I upgrade my houses. Is this an undue or unreasonable prejudice 
or an unfair practice? (B) The growers with the upgraded houses have 
received a higher base price. Are they receiving an undue preference or 
advantage over me?

    Answer: It depends. (See Packers and Stockyards Act Regulation 
201.216.\6\)
---------------------------------------------------------------------------
    \6\ https://www.ams.usda.gov/rules-regulations/packers-and-
stockyards-act.

   In part (A), PSD could investigate whether this was an undue 
        or unreasonable prejudice or an unfair practice. For example, 
        decreasing the number of birds or your contract rate, or 
        threatening to terminate your contract, could result in PSD 
        investigating whether coercion or retaliation was present. PSD 
        could also investigate whether any higher pay offered by the 
        poultry company if the grower makes the upgrades is adequate 
---------------------------------------------------------------------------
        for the grower to reasonably recoup the cost of the upgrades.

   In part (B), PSD could investigate whether the poultry 
        company's payment of higher contract rates to the growers who 
        upgrade their houses was an undue preference. While PSD could 
        consider, for example, whether the upgraded housing results in 
        a cost savings to the poultry company through lower feed 
        conversion or lower bird mortality, other factors will also be 
        examined on a case-by-case basis and appropriately weighed to 
        determine if an undue preference was involved. PSD would 
        examine, for example, whether there is evidence of a pattern 
        and practice of racial discrimination, or whether benefits 
        available from the poultry company or its regular business 
        partners are available to growers, including those growers that 
        participate in associations.

    Question: My integrator recorded a delivery of 40,000 pounds of 
feed to me but delivered only one-half that amount, based on how the 
feed looks in my feed bins. Can they do that?

    Answer: A poultry company's failure to deliver the full amount of 
feed shown on the feed mill's scale ticket and recorded to a grower's 
account is a material breach of the contract and an unfair and 
deceptive practice in violation of the P&S Act. Note that it can be 
difficult to judge the weight of feed based on how it appears in the 
feed bin. Pelleted feed that weighs the same as starter (or crushed) 
feed may appear to take up more room in a feed bin when the weight is 
the same. The type and quality of feed ingredients can also affect how 
feed looks inside a feed bin.

    Question: Some growers have not received sufficient information 
from poultry companies to determine the accuracy of their pay. Could 
this be an unfair or deceptive practice?

    Answer: Yes. Regulations require that poultry growers receive all 
information necessary to calculate and verify their settlement pay. PSD 
would consider it an unfair and deceptive practice for a poultry 
company to refuse to provide a grower with the information and data 
used to determine compensation, upon the grower's request. This data 
would include, but is not limited to, feed conversion rates, feed 
analysis, origination, and any other factor that impacts pay. (See 
Packers and Stockyards Act Regulation 201.100(d).\7\)
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    \7\ https://www.ams.usda.gov/rules-regulations/packers-and-
stockyards-act.

    Question: The contract I got from the poultry company requires any 
disputes about my contract to be resolved in State A where the company 
is incorporated. My poultry farm is located in State B. Do I have to go 
---------------------------------------------------------------------------
to court in State A?

    Answer: No. The P&S Act requires that any disputes related to 
poultry growing contracts or swine production or marketing contracts be 
resolved within the federal judicial district in which the principal 
part of the performance takes place. In your example, any legal action 
such as a lawsuit must occur within the federal judicial district in 
State B where your farm is located. (See Section 209(a) of the Packers 
and Stockyards Act (7 U.S.C.  197b(a)).\8\)
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    \8\ https://www.ams.usda.gov/rules-regulations/packers-and-
stockyards-act.
---------------------------------------------------------------------------
Industry-specific Circumstances: Cattle
    Question: The beef packer that I sell fed cattle to routinely 
refuses to put a fixed price in the contract, but instead ties the 
contract to a spot market that trades and whose prices are reported 
several days later. The packer may not bid in that market, and there 
may not even be enough bidders in the market for there to be a reported 
price. Is that an unfair or deceptive practice?

    Answer: Based on the information provided, PSD may investigate to 
determine if the packer engaged in efforts to lower the spot market 
price. One factor that may be considered in the investigation is the 
level of regional concentration. Price manipulation violates the P&S 
Act.

    Question: A packer offers to buy cattle from my neighbor on a 
negotiated spot market live weight basis. The same packer will take my 
cattle only if I agree to sell them on its standard market formula. The 
cattle are the same quality. Is this a violation of the Packers and 
Stockyards Act?

    Answer: Based on the information provided, PSD would investigate 
whether the packer is consistently treating you less favorably than 
other similar producers and if that treatment rises to the level of an 
undue prejudice. PSD may also investigate whether the packer is 
providing a preference to your neighbor that cannot be justified as 
cost savings, meeting a competitor's price or terms, or as a reasonable 
business decision. In furtherance of policy set out in the Agricultural 
Fair Practices Act of 1967 (7 U.S.C.  2301 et seq.), PSD generally 
would not view cost savings to include circumstances where multiple 
producers can meet reasonable terms of delivery on a cooperative or 
aggregated basis.

    Question: The beef packer that I sell fed cattle to on a negotiated 
basis routinely offers higher negotiated prices for cattle of the same 
quality to a feeder whose cattle are certified as organic. My cattle 
are not certified as organic. Since the quality of the cattle, 
including yield grade, is the same as the organic cattle, does the 
premium paid for the organic cattle constitute an undue preference or 
advantage?

    Answer: Based on the information provided, no. Products with 
special characteristics, e.g., organic, generally have higher retail 
prices. Therefore, packers are willing to pay more for cattle that are 
certified as organic.
Industry-specific Circumstances: Hogs
    Question: I grow hogs on a contract basis. I believe that the waste 
from many of the neighboring growing structures is being handled 
improperly, resulting in what I believe could be air and water 
pollution violations. I spoke to my state legislator at a community 
town hall, and recently, I shared my concerns with a reporter. I think 
my swine contractor knows I have spoken up to the government and the 
media about the pollution. As my contract is nearing renewal time, if 
my swine contractor proposes a less favorable formula for my hogs, is 
this a violation under the Packers and Stockyards Act?

    Answer: Possibly. PSD would investigate if the swine contractor was 
retaliating against you based on concerns regarding redress of 
grievances through governmental agencies or legislative 
representatives, or with exercising freedoms of press or association, 
regarding compliance with environment laws. As the December 2020 final 
rule noted, ``Farmers have the right to file complaints regarding 
wrongdoing, speak with media and elected officials, and form and join 
farmer associations. If retaliation occurs, there is likely 
discrimination, which may be unlawful under the P&S Act or other 
laws.''
Further Engagement
    Question: How do I report what I believe may be a violation of the 
P&S Act?

    Answer: PSD has a toll-free hotline that you can call to voice 
complaints or concerns. You can make anonymous or confidential 
complaints. Although you will need to leave your name and contact 
information so that PSD can call you back, .PSD will not disclose the 
name of a person who is complaining without the person's authorization. 
The hotline number is 1-833-DIAL PSD (1-833-342-5773).
    You can also contact the PSD Headquarters Office at (202) 720-7051 
or [email protected], or any of the three PSD regional offices. 
You can reach the Eastern Regional office at (404) 562-5840 or 
[email protected], the Midwestern Regional Office at (515) 323-2579 
or [email protected], or the Western Regional Office at (303) 
375-4240 or [email protected].

    Question: Where can I find more information about how the Packers 
and Stockyards Act protects me? How can I offer views about what should 
be done?

    Answer:

   For general information about P&S Act and regulations, you 
        can visit https://www.ams.usda.gov/services/enforcement/psd.

   If you have a specific question, or wish to share your views 
        on regulations or on these FAQs, contact the Headquarters 
        Office at (202) 720-7051 or [email protected]. You may 
        also write to the Chief Legal Officer, Packers and Stockyards 
        Division, Rm. 2097-S, STOP 3601 1400 Independence Ave. SW, 
        Washington, D.C. 20250-3601.

    USDA may update Packers and Stockyards Act FAQs from time to time.

    Question 2. Mr. Secretary, I was glad to see USDA's press release 
last week, outlining the gaps in USDA's previous COVID-19 aid, and 
committing to distributing the new ``Pandemic Assistance for 
Producers'' more equitably.
    This issue is important to me--last Congress I introduced the Local 
and Regional Farmer and Market Support Act (Local Farmer Act), which 
would target COVID-19 aid directly to farmers of color and local and 
regional food producers and markets as they cope with the economic 
impacts of the coronavirus pandemic.
    I'd like to hear more about what USDA is envisioning in terms of 
its rules for new programs to ensure we're putting a greater emphasis 
on outreach to small and socially disadvantaged producers, specialty 
crop and organic producers. Is the agency considering setting-aside 
portions of these relief funds for farmers of color?
    Answer. Reaching beyond the traditional row crop producers to serve 
the full set of potential USDA customers is a top priority. But it 
isn't a simple task and will take time and a combination of actions.
    The pandemic assistance program is a good example of the challenges 
and opportunities. The first round of payments through the CFAP 1 
program was well suited to USDA's traditional customers and crops, but 
the program and rules were not tailored to all types of crops and 
especially many specialty crops were excluded. The next round of 
assistance, CFAP 2, did not include as many barriers for specialty 
crops, smaller scale livestock or diversified producers. But solving 
the eligibility issues were not enough to actually get underserved 
producers enrolled, as the previous Administration failed to conduct 
sufficient outreach to underserved producers.
    The Biden-Harris Administration recognized the gaps and disparities 
in the previous versions of pandemic assistance and re-opened the CFAP 
2 program in April 2021 and set about conducting the outreach and 
seeking partnerships with organizations serving underserved 
communities. This concerted effort has shown results--the previous 
Administration's sign-up only included 4% socially disadvantaged 
producers (based on race and ethnicity), the new signup from April-July 
saw this percentage increase to 11%, which further increased to 21% by 
September.
    USDA has been working to conduct broader outreach and establish a 
technical assistance network from the start. It is important to 
understand and acknowledge the additional hurdles faced by underserved 
producers and also to ensure existing targeted programs reach those 
they are intended to reach, whether they are limited resource, 
beginning, veteran, or socially disadvantaged. We need to streamline 
processes, build partnerships to help us examine how to make programs 
work better for underserved producers, and ensure we reach all of our 
eligible customers. It will also be critical to engage Congress and 
this Committee on how to address barriers that exist in statute. I look 
forward to working with you on this.
Questions Submitted by Hon. Bobby L. Rush, a Representative in Congress 
        from Illinois
    Question 1. Would you expand upon the concrete steps you are taking 
to foster trust and ensure the timely access to capital for Black 
farmers? What is the timeline for implementing any new policies?

    Question 2. Do you need any additional authorities from Congress to 
enact policies to directly help struggling Black farmers and to reverse 
the impact of decades of discriminatory practices at the USDA?
    Answer 1-2. USDA is committed to the values of equity and inclusion 
rooted in justice and equal opportunity for those we serve. We will 
seek out opportunities within the Department that help ensure 
historically underserved groups can more fully access and participate 
in programs and services and build a workforce that is more 
representative of America. USDA was provided over $1 billion from the 
American Rescue Plan, which provides funds and direction for USDA to 
take forward looking action to ensure historically underserved 
communities have the tools, programs and support they need to succeed. 
With these transformative funds, USDA will focus on creating 
opportunity for historically underserved producers through technical 
assistance and capacity building, access to land and credit, and access 
to markets and market development. I look very forward to working with 
you as we move forward in this important work.

    Question 3. Secretary Vilsack, it is my understanding that there is 
currently insufficient transparency regarding assistance to farmers 
based on race. To that end, I would like to know:
    Can you tell me the number of Black farmers who bought crop 
insurance policies in 2019 compared to the number of white farmers?
    Answer. USDA estimates that in 2019, 1,278 policyholders identified 
as Black, whereas 415,944 policyholders identified as White.

    Question 3a. Can you tell me how much Black farmers received in 
premium or income support compared to white farmers?
    Answer. USDA estimates that in 2019, $14.24 million in crop 
insurance premium subsidy was provided to policyholders identifying as 
Black, whereas $5.66 billion in premium subsidy was provided to 
policyholders who identified as White.
    USDA estimates that in 2019, farmers who identified as Black 
received:

   $15,142,361 in ARC-PLC payments.

   $30,937 in Livestock Indemnity Program (LIP) payments.

   $668,420 in Livestock Forage Program (LFP) payments.

   $27,753,850 in Market Facilitation Program (MFP) payments.

   $55,228,215 in CFAP payments (CFAP 1 and 2).

    USDA estimates that in 2019, farmers who identified as White 
received:

   $5,716,721,856 in ARC-PLC payments.

   $70,704,259 in Livestock Indemnity Program (LIP) payments.

   $105,818,499 in Livestock Forage Program (LFP) payments.

   $13,219,646,664 in Market Facilitation Program (MFP) 
        payments.

   $26,486,468,319 in CFAP payments (CFAP 1 and 2).

    Question 3b. Can you tell me how many Black farmers received farm 
ownership or operating loans in 2019 compared to white farmers and how 
much they each received?
    Answer. USDA estimates that in 2019, farmers identifying as Black 
received:

   51 Direct Farm Ownership loans with a value of $9,564,170.

   418 Direct Operating loans with a value of $19,796,537.

   8 Guaranteed Farm Ownership loans with a value of 
        $3,603,590.

   19 Guaranteed Operating loans with a value of $3,758,350.

    USDA estimates that in 2019, farmers identifying as White received:

   5,883 Direct Farm Ownership loans with a value of 
        $1,305,925,190.

   15,971 Direct Operating loans with a value of $953,093,109.

   3,599 Guaranteed Farm Ownership loans with a value of 
        $1,788,201,264.

   3,426 Guaranteed Operating loans with a value of 
        $1,010,660,556.

    Question 4. Given the decades of discrimination of Black farmers 
that has led the vast majority to have to sell their farms, would you 
support making data on subsidies and loans available to the public?
    Answer. It is important that we identify ways to quantify the 
impact of our efforts to root out systemic discrimination. With 
appropriate protections of personal information and confidential 
business information, sharing statistics may be appropriate. I would be 
happy to discuss this further with you.
Question Submitted by Hon. Gregorio Kilili Camacho Sablan, a Delegate 
        in Congress from Northern Mariana Islands
    Question 1. Pacific Islander farmers, like Black farmers, are 
included in the definition of Socially Disadvantaged, but do not seem 
to benefit from USDA funding streams like the Socially Disadvantaged 
Farmers and Ranchers and Veteran Farmers and Ranchers group (2501 
Program), why is that?
    Answer. The Section 2501 program provides grants to nonprofit and 
community-based organizations, universities, and tribal governments 
that in turn provide outreach and technical assistance to socially 
disadvantaged farmers and ranchers and veteran farmers and ranchers. As 
you point out, Pacific Islanders and Black farmers and ranchers are 
eligible beneficiaries of the program opposed to recipients of grant 
funds. Individual farmers and ranchers are not eligible to compete for 
this grant program but benefit from the expertise of the organizations 
and higher education institutions in providing needed outreach and 
technical assistance to the communities in need of such services. There 
are other programs to directly assist individual farmers and ranchers 
across the Department. Please visit: www.farmers.gov or www.usda.gov/
newfarmers.
    As USDA commits to taking full stock of how socially disadvantaged 
farmers and ranchers access our programs, we will be sure to evaluate 
outreach to these communities and the groups that serve them to ensure 
full understanding of eligibility, and how USDA can best help in 
creating access. I would welcome working with your office to address 
these challenges.

    Question 2. The National Agriculture Statistics service recently 
released the 2018 Census of Agriculture for the Northern Mariana 
Islands.
    How can that data be used to improve grant opportunities for the 
Rural Development Service, the Natural Resource Conservation Service, 
and the Farm Service Agency?
    Answer. The Census of Agriculture is an important tool for USDA to 
understand agricultural products throughout the United States and its 
territories. USDA uses census data to understand agricultural 
production and to provide a baseline for comparisons to identify trends 
over the years. Having high quality data allows us to be able to 
identify needs and gaps in services. It also allows for a baseline 
understanding of potential damages from typhoons and other natural 
disasters, helping farmers and ranchers justify loss claims. Having 
uniform data also allows us to compare benefits and services we are 
providing across territories and States, and as we continue to evaluate 
how we can more equitably distribute USDA's grant resources.

    Question 2a. Second, is the USDA willing to work with me and other 
Congressional Delegates from the territories to clarify how money is 
allocated and dispersed in the territories?
    Answer. Yes, we are interested in learning more about the needs of 
the citizens of the territories and how we can ensure they have access 
to USDA's important services.

    Question 2b. Third, while an Advisory Committee on Minority Farmers 
exists under Section 2501 of the Food, Agriculture, Conservation and 
Trade Act of 1990 and has goals to ensure socially disadvantaged 
farmers have equal access to USDA program--no Pacific island states or 
territories are represented on the Advisory Committee. Will the USDA 
work towards creating parity for farmers in the Pacific to also serve 
on the advisory committee on minority farmers?
    Answer. The Section 2501 program requires stakeholder input, 
including the Secretary's advisory committee on minority farmers. The 
nomination process is currently in progress. We are working to identify 
appropriate individuals for consideration on these important committees 
to serve from each region of the United States.

    Question 3. USDA Farm Service Agency (FSA) is considered a ``lender 
of last resort.'' In FY 2017 `Native Hawaiian or other Pacific Island' 
represented 0.2% of Direct Loans, and 0.1% of Guaranteed Loans. These 
numbers represent the lowest percentages of use for USDA FSA loans, 
what is the USDA doing to expand access to farmers in the Pacific, 
specifically in the Northern Mariana Islands?
    Answer. We want all farmers to have equitable access to USDA's 
important services. As we evaluate how and where we can do better, we 
will examine these issues and make specific recommendations to address 
how to improve access to farmers in the Pacific.

    Question 4. Relating to USDA COVID-19 Relief, the Coronavirus Food 
Assistance Program (CFAP) was designed to bolster the farm economy, but 
Pacific Islanders present 0.01% of MFP payments, compared to 26.53% 
among white farmers, and 0.08% among Black Farmers. Sections 1005 and 
1006 of the American Rescue Plan provide targeted and tailored support 
during the pandemic for socially disadvantaged farmers, including 
pacific islander farmers, what is the USDA doing to increase awareness 
of this funding stream for farmers in the pacific and in the Northern 
Mariana Islands?
    Answer. A key part of our efforts at ensuring equity in everything 
USDA does is ensuring that we improve outreach to disadvantaged 
producers so that they understand the range of services we provide. We 
are committed to working with you and community organizations who 
understand the unique needs of disadvantaged producers to ensure that 
farmers in the Pacific are aware of and can access USDA services.

    Question 5. Under the recently enacted American Rescue Plan Act of 
2021 there is funding available to create ``equity commissions that 
will address racial equity issues within the Department of Agriculture 
and its program,'' what will the USDA do to involve pacific island/
indigenous farmers in these efforts?
    Answer. The equity commission will be an important part of our 
efforts to ensure that all have access to USDA's programs and services, 
particularly by dismantling barriers historically underserved 
communities have faced, including pacific island/indigenous farmers. 
The commission will reflect a wide range of perspectives through its 
diverse membership from those whose mission is to serve or advocate for 
underserved communities, minorities, women, individuals with 
disabilities, individuals with limited English proficiency, rural 
communities, and LGBTQI+ communities. I will ensure that its efforts 
take the needs and perspectives of Pacific Island and indigenous 
farmers into account.
Question Submitted by Hon. Michelle Fischbach, a Representative in 
        Congress from Minnesota
    Question. Secretary Vilsack, your testimony in the hearing touched 
on the availability of land and credit to start a new operation or to 
continue a family tradition in farming. This is an important part of 
larger critical issue, where our next generation of farmers are going 
to come from. In terms of continuing the family tradition, I'm hearing 
consistently from constituents in my district about the Biden 
Administration's proposals to change the calculation of basis for the 
purpose of capital gains tax. Known as ``stepped-up basis'', a capital 
gains tax is currently assessed on the present value of an asset less 
the value at the time of death or at the transfer to the farmer that is 
being taxed, as opposed to when the property was acquired or inherited. 
This is important for lessening the burden of a the passing down of 
multi-generational farms as otherwise, that transfer takes on a 
dramatic tax liability through capital gains, even in cases with no 
intention of realizing the gain from when the asset was originally 
acquired. My constituents are concerned that the Biden Administration 
will eliminate this stepped-up basis, along with an increase in the 
capital gains tax rate in an upcoming tax proposal.
    Can you confirm whether this proposal is being considered and, if 
so, how this change would affect the ability for farms to be passed 
down to future generations including in socially disadvantaged 
communities?
    Answer. The President's American Families plan includes critical 
tax reform to ensure that the wealthy pay their fair share of taxes to 
finance essential investments in workers and families, including 
childcare, nutrition, higher education and more. One of those reforms 
includes a proposal to close the ``stepped-up basis'' loophole for 
wealthy estates so that large fortunes do not escape taxation. The 
proposal protects family farms, exempting farms that stay in the 
family.
Response from John W. Boyd, Jr., Founder and President, National Black 
        Farmers Association *
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    * There was no response from the witness by the time this hearing 
was published.
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Question Submitted by Hon. Jim Costa, a Representative in Congress from 
        California
    Question. As of 2017, 48 percent of farms operated by Black 
producers specialized in cattle production. Mr. Boyd, you mentioned 
that you raise beef cattle, alongside growing soybeans, wheat, and 
corn. How has been your experience been in the marketplace as a Black 
livestock producer and has that experience been similar or different to 
the other commodities you grow? How can USDA better support livestock 
producers color?
    Answer.
Question Submitted by Hon. Alma S. Adams, a Representative in Congress 
        from North Carolina
    Question. In the American Rescue Plan, Congress provided for new 
equity commissions to address racial discrimination at the USDA.
    We need individuals on that commission who bring fresh eyes to the 
problems at USDA and can speak to the barriers faced on small and 
beginning farms.
    Mr. Boyd, what are your thoughts on how to best set up the 
commission to be effective?
    Answer.
Response from Sedrick Rowe, Owner/Operator, Rowe Organic Farms LLC *
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    * There was no response from the witness by the time this hearing 
was published.
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Question Submitted by Hon. Jim Costa, a Representative in Congress from 
        California
    Question. Mr. Rowe, earlier in this hearing I shared with Secretary 
Vilsack how Black farmers in California don't trust USDA for loans and 
other services. You mentioned how community organizations helped you 
mitigate the lack of trust between USDA and Black farmers.
    How did these organizations help mitigate the trust gap and 
advocate for you at USDA?
    Answer.
Question Submitted by Hon. Ann Kirkpatrick, a Representative in 
        Congress from Arizona
    Question. Ms. Kirkpatrick. . . .
    My second question is for Mr. Rowe. I am inspired by your testimony 
today and by your decision to become a first-generation farmer. 
Further, I can only imagine the difficulty in not only starting a farm 
completely from scratch, but going through the process to ensure you 
are producing organic crops.
    From my conversations with farmers back home, I know that going 
through the organic certification process is something that scares a 
lot of farmers off, or they don't know where to start, even if they are 
already operating under USDA organic practices. Can you describe for us 
some of the reasons you chose to produce organically, and if you see an 
opportunity to help more Black farms through the USDA organic 
certification?
    The Chairman. I am going to have to ask if you might be kind enough 
to reply in writing. We are way past the time. I deeply appreciate your 
consideration. We want to get every Member in this important hearing.
    Answer.
Response from Shirley Sherrod, Executive Director, Southwest Georgia 
        Project for Community Education, Inc.
Question Submitted by Hon. Jim Costa, a Representative in Congress from 
        California
    Question. Ms. Sherrod, your testimony reflected many of the same 
things the Black farmers in my district shared.
    You mentioned that Black farmers need to be able to market their 
products and not be limited to any one market and that they have to be 
able to diversify their markets. As Chairman of the Subcommittee on 
Livestock and Foreign Agriculture, I'm especially interested in making 
sure we are expanding international markets for producers of color, in 
addition to domestic markets.
    What are 2-3 things that USDA can do to help producers to diversify 
their markets?
    Answer. When Black farmers are assured access to capital as well as 
technical assistance--for the most part, they are able to produce a 
quality product. The issue then becomes marketing. Most Black farmers 
depend on one or more of the following: (1) local markets, (2) 
farmers['] markets, (3) commercial markets through a middle person. 
These markets tend not to be stable and the volume is limited. What 
Black farmers need is a marketing system that they can control--a 
system that enables them to participate in local, regional, national 
and international markets. A system that also allows them to develop 
long-term mutually beneficial relationships within the global marketing 
arena.
    The key to this participation is a farmer owned and operated 
infrastructure that will include:

   Strategically placed processing/valued facilities.

   Refrigerated trucks.

   Strategically placed aggregation centers.

    This cannot be a short-term commitment by the USDA nor Black 
farmers and the institutions that support. I think it will require 
several meetings between USDA and key partners to develop a 
comprehensive strategy and timeline.

                                  [all]