Food

Will Obama's USDA Atone for Decades of Racism?

For decades, rampant racism blocked access to critical government farm loans for thousands of farmers. President Obama appears ready to change that.

Native American North Dakota ranchers George and Marilyn Keepseagle applied for their first loan from the U.S. Department of Agriculture back in 1975, hoping to buy higher quality livestock. George, now 69, remembers having the strange feeling that the county loan officer charged with evaluating their application didn't seem to want them to succeed.

Two decades later, after struggling to get USDA loans to help recover from storms, low cattle prices and other calamities, the Keepseagles have no doubt the county loan officers did not have their best interests in mind.

The Keepseagles allege the USDA's farm loan program unfairly forced them to sell 380 acres of George's family land in 1999, wreaking financial havoc on their lives and pushing them into foreclosure. They are the lead plaintiffs in a class-action lawsuit charging that tens of thousands of Native Americans suffered about a billion dollars in economic damage because of blatant discrimination at county USDA loan offices.

For a decade, scores of Native American, black, Latino and women farmers have been seeking damages in four separate lawsuits charging the USDA with rampant racial and gender discrimination in the agency's loan program. The cases garnered almost no attention under the Bush administration, but President Barack Obama has promised to clean up the USDA's sordid history, and plaintiffs in all four lawsuits hope they will soon see justice after decades of discrimination that took a devastating financial and emotional toll.

Marilyn Keepseagle, 71, says USDA officials refused to help her with loan applications or tell her about available programs. She says they withheld promised loans until after other farming payments were due, causing the couple to lose access to crucial supplies and legal farming rights.

Many of the Native American plaintiffs live in swaths of the country where tribal land and land privately held by Native Americans form a complicated pattern intermixed with land held by whites. Since the loan committees were primarily staffed by white men, plaintiffs say the loan process became a de facto forum for deep-seated resentment and racism toward Native Americans.

Montana rancher Luther Crasco testified that a loan officer told him, "You Indians are always getting free money and you don't pay taxes." He sought a loan for a sprinkler system but was denied, he said, because the loan officer thought he would turn around and sell it. Crasco, 66, is sure a white rancher would have gotten the sprinkler loan, no questions asked. He said he knows many Native Americans whose land was sold to white people after problems with USDA loans. "There goes part of your reservation," he said. "That is the ultimate goal of the FSA [Farm Service Agency, part of the USDA] -- to sell all the Indian land out. I'm sure of that."

When Nancy Carnley, the vice-chief of the MaChis Lower Creek Indian tribe in Alabama, visited the county loan office with her children and father, employees called them "injuns" and made "war whoop" noises, according to the lawsuit. Steven Defender, a Native American who served on one of the loan committees in North Dakota, observed firsthand the other committeemen tabling Native Americans' applications and using slurs like "prairie nigger."

Latino farmers likewise say racism and retaliation have been evident in the USDA process. Texas farmer David Cantu’s father had always made loan payments on time, Cantu said, but he was denied a USDA loan after attending a protest and speaking out about problems with the system in a listening session.

For farmers and ranchers who have already lost family land or moved on to other ways to make a living, a settlement would be a moral victory and a sorely needed financial boon. But it won’t restore more important things they’ve lost -- ties to the past, the love of working the land.

Larry Chavarria, a third-generation Latino farmer in California, still misses his land after USDA loan problems following winter storms forced him and his brother to give it up. Chavarria now works in a prison canteen, his brother as a tax preparer.

Claryca and Keith Mandan, 55 and 57, ceased their ranching operation on the Standing Rock Sioux reservation and were able to keep their home and the land in the family only through "extreme" measures after USDA loan denials.

"My husband's health has deteriorated significantly from all the stress of all this over the years," Claryca said. "We're talking about a 26-year period. A lot of plaintiffs are elderly now, their productive lifetimes have passed. We just learned of another person who passed away, who was very instrumental in the case. It’s harder every time we lose a plaintiff who died waiting for justice." 

Black Farmers' Victory Gives Others Hope

Black farmers celebrated an important victory on Feb. 18, when the Justice Department agreed to pay $1.25 billion to plaintiffs in a case known as Pigford II, an extension of the landmark class-action lawsuit named for North Carolina farmer Timothy Pigford. That case was settled in 1999, but was so poorly publicized that many thousands missed the initial filing deadline. Since the Pigford II farmers' claims are considered "untimely," Congress must approve their payouts. The 2008 Farm Bill allocated $100 million for Pigford II, but Congress still must approve the additional $1.15 billion.

During the Bush administration the USDA was flatly opposed to settling the Keepseagle case, according to attorneys. Last fall the Justice Department initiated negotiations, and lawyers now hope a meaningful settlement is on the horizon. Two other lawsuits filed by Latino and women farmers, named for plaintiffs Garcia and Love, have not been certified as class-actions, meaning those farmers' claims cannot be settled en masse by the Justice Department. But the farmers are hoping Congress will pass legislation to create a new administrative process that would allow individuals to seek damages. After a decade of inaction, momentum is finally building. In December, Rep. Rosa DeLauro, D-Conn., introduced legislation that would create a $4.6 billion fund compensating women farmers, and Sen. Robert Menendez, D-New Jersey, has advocated for the Latino farmers.

The USDA's farm loan program was created as an option of last resort for family farmers unable to secure credit from commercial banks. An important part of the program has long been targeting "socially disadvantaged" minority farmers and ranchers. But for thousands of minority and women farmers, the program has been the exact opposite of a lifeline. In thousands of cases in the 1980s and 1990s, the loan program actually became a death sentence for farms and ranches that had been in families for generations. Again and again, the USDA improperly denied loan applications and imposed outrageous terms on loans made to women and minority farmers. The result? Farmers from Florida to California to North Dakota were forced off their land.

The Pigford case was settled quickly in 1999, offering $50,000 to each farmer, in addition to debt relief. But plaintiffs still had to plead their cases individually in a complicated hearing process, and 81,000 of the first 94,000 claims filed were rejected. Thousands of others also missed the 1997 filing deadline. Barack Obama mentioned the case numerous times during his presidential campaign, and in 2008, joined members of the Congressional Black Caucus in a letter protesting the fact that USDA officials kicked out Government Accountability Office investigators who had come to investigate the failure to pay Pigford claims.

To date, about $1 billion has been paid out to Pigford claimants, and now it appears likely the Pigford II plaintiffs will be compensated. 

Native American farmers hope the Pigford II settlement is an indication that they too will finally be granted justice. Lead attorney Joe Sellers noted that there are many more Native American than black farmers and ranchers. The 2007 USDA census counted 32,938 black farmers and 61,472 Native American farmers, meaning the award for Native Americans could be substantially larger than the $2.25 billion designated for Pigford.

"We have to be mindful of the importance of negotiating meaningful relief that is not diluted by an unexpectedly large response from eligible farmers and ranchers," said Sellers.

At the November 5 tribal leaders summit at the White House, new Agriculture Secretary Tom Vilsack promised to address the Keepseagle case, and soon after, the Justice Department initiated negotiations. Sellers said he is "optimistic there will be a settlement because I believe this president is committed to ending the sorry history of the USDA." The case is in the U.S. District Court for the District of Columbia before Judge Emmet Sullivan.

The Keepseagle class includes all Native American farmers and ranchers who sought loans between 1981 and 1999 and filed complaints alleging discrimination. Expert witness Patrick O'Brien used standard USDA formulas to calculate the economic damage suffered by Native American farmers and ranchers at a minimum $775 million, noting the real number is likely much higher. O'Brien, an expert in agricultural economics and a  veteran of the USDA's Economic Research Service, found that Native Americans received only half the loans they should have between 1981 and 2007, a denial of $3 billion in deserved credit.

The legal road ahead is less certain for the Latino and women farmers, since neither have been granted class-action status. As a result, each farmer must pursue his or her claim individually through the courts, a nearly impossible proposition given the expenses and logistics involved.

Stephen Hill, attorney for the Latino farmers, says there are no significant differences between the discrimination suffered by his clients and the Native American and black farmers. There were originally 110 named plaintiffs in the Latino suit, mostly in the southwest and Pacific northwest, though a class could include many thousands. The government has asked the court to demand the plaintiff list be updated within 30 days, which would prohibit farmers from joining the group at a later date. Hill says this is unfair, since Pigford was opened up to claimants who missed the original deadline. 

That's where Congress comes in. The government could set up a new fund allowing Latino and women farmers to seek redress individually without having to go through the court system.

"Congress ought to be concerned that not just a chapter is closed with respect to USDA's ugly and ongoing history of discrimination, but that the entire sorry book is closed once and for all," Hill said. "That can only be accomplished by ensuring farmers who have suffered the identical discrimination as that suffered by black farmers be treated equally. Simply put, if there is to be justice for one victim group there must be justice for all victim groups. Any other result merely perpetuates the discrimination that has persisted unabated for decades at USDA."

A History of Pervasive Discrimination

USDA loans are meted out by county committees made up of local ranchers and farmers, who often have personal feelings about the applicants and a financial interest in the success or failure of their neighbors' operations.

Until more recent reforms, these regional committees would judge loan applications on criteria including the farmer's "character," "industry," "commitment" and education or experience. Critics say these were subjective judgments, and that disproportionately white officials evaluating the applications were influenced by racial and cultural prejudice as well as self-interest in making their decisions.

Surveys by the USDA show that the committees were made up primarily of white men. In recent years the committees have become more diverse, though still not demographically reflective of the farming and ranching population. 

Latino farmers were often forced to conduct negotiations in English, without being provided translators. New Mexico chili farmer Alberto Acosta had to travel 260 miles each way to meet with a loan officer, supplying and paying his own translator each time. Often when he arrived, the officer was too busy to meet with him. Officers often refused to deal with women farmers altogether, instead demanding to speak to their husbands. Some even requested sexual favors in exchange for loans.

Loan officers were allowed to require strict oversight of loans, meaning farmers would need to get an officer's signature on bank transactions and any significant purchases. Often this would require hours of driving – a costly and frequently impossible proposition that would often make farmers unable to buy seed or equipment when needed. The clear implication of this policy was that the farmers were not capable of managing their business on their own -- an offensive idea, especially to Native Americans who point out that their ancestors were farming long before white people came to the continent.

In 1997, the USDA's Civil Rights Action Team undertook a wide-ranging report in response to numerous complaints of racism, bias, lack of due process and other problems. The agency held listening sessions around the country and logged numerous complaints and examples, showing that racist, sexist and otherwise unjust decisions were in fact endemic in the system.

The USDA's civil rights survey found that when minorities were granted loans, they were often processed so slowly the farmers would not get their loan until planting season was over and it was too late. The loans were also sometimes arbitrarily reduced or never arrived even after being granted, leaving farmers to default on debt they had wracked up in anticipation of a promised loan. This could trap farmers in a vicious cycle in which future USDA and private loans were denied because of their debts or defaults. Farmers might lose their land to foreclosure, or the USDA would take the land and lease it back to them with the option to buy it back. But the land value would be set artificially high, the civil rights report charges, so the farmer would default, the land would go to auction and sell for much less, sometimes to a friend of the official overseeing the process.

"Once they finally processed the loan way late in the season, they might arbitrarily reduce it," said Hill. "So it’s not enough to even really help the farmer, but it's enough to get you in trouble as a debtor. It gets the farmer in distress, unable to manage the payments, and then instead of helping the farmer [the USDA loan committee] would say you need to liquidate."

Native American, Latino and women farmers have asked for a stay on foreclosures related to USDA discrimination. Native American farmers were granted a 90-day moratorium on foreclosures last year, which has since expired. The Pigford II settlement included a moratorium on foreclosures until claims are paid out.

Farmers who feel they were wronged by the system could file complaints with the USDA, but the USDA's civil rights report described the complaint system as a "bureaucratic nightmare" with massive backlog and scores of complaints going unanswered. And the Native Americans' lawsuit notes that "in many places the state or local official who was the subject of a discrimination complaint was the one to whom the farmer had to make the discrimination complaint."

"Complaining to the USDA is like complaining to the fox that is guarding your chickens," said George Keepseagle. "There's the fear of retaliation. You always have to go in with a smile no matter how they treat you." Claryca Mandan compared the USDA complaint process to "writing a letter to Santa Claus in the North Pole."

Farmers were often granted no damages, even when the USDA acknowledged discrimination. And for a spell during the Reagan administration, the civil rights division was simply not funded so that it essentially didn't even exist. The current administration has on numerous occasions stated its commitment to cleaning up messes of the past, and plaintiffs and their attorneys say they believe the commitment is genuine. Nevertheless, as the Pigford case has already shown, it will be a long and complicated process.

The plaintiffs' attorneys say they are thrilled that the wheels of justice are finally moving. But disparate treatment of the different groups and slow and arbitrary settlement of the cases could perpetuate the USDA's notorious record of discrimination, even as Obama and Secretary Vilsack try to turn over a new leaf.

Kari Lydersen, a regular contributor to AlterNet, also writes for the Washington Post and is an instructor for the Urban Youth International Journalism Program in Chicago.
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