When the CARES Act passed in March, Congress authorized billions of federal dollars for aid programs as a lifeline to farmers who have faced serious economic strain from the pandemic.
Any farmer applying for a loan must first be approved by the Farm Service Agency, which, along with the United States Department of Agriculture (USDA), has historically excluded Black-operated farms from accessing federal aid, foreclosed on businesses unable to pay back loans, and delayed access to previously approved funds for years.
As many farmers expect the aid to be insufficient anyway, some decide not to apply at all—this is especially the case for farmers of color who have experienced their loan applications being repeatedly delayed or denied.
Since the start of the pandemic, banks and other institutions, through the USDA, have doled out at least $512 billion in forgivable loans to more than 4.5 million borrowers. But farmers and advocacy associations alike are already noticing gaps in aid that reinforce the agency’s entrenched and muddy history of systemic racism.
“Packages were not made with all farmers in mind,” says Juli Obudzinski, deputy policy director of the National Sustainable Agriculture Coalition, an organization that works with thousands of farmers to advocate for federal policy reform. According to Obudzinski, the packages fail to address the needs of small-scale and minority farmers who were already struggling before the pandemic.
“It doesn’t matter how much money goes through the USDA,” says Cornelius Blanding, the executive director of the Federation of Southern Cooperatives, a nonprofit cooperative association made up of more than 20,000 Black farmers in the United States. “The packages are all going through a system where small and black farmers have always had a harder time accessing aid.”
Although the bulk of USDA funding was directed at mass-produced crops—soybean, cotton, oats, and wheat—the CARES Act set aside $9.5 billion to go in part to growers who produce specialty crops, which include certain vegetables, fruits, and nuts that are sold in local farmers’ markets, schools, and restaurants.
A range of other benefits were created or increased by the CARES Act to help farmers, including the Payroll Protection Program (PPP), Economic Injury Disaster Loans (EIDL), $14 billion for commodity farmers that lost markets due to the pandemic, and a total of $19 billion for the Coronavirus Food Assistance Program (CFAP), which was designed to provide immediate relief for primarily row crop farmers and ranchers who were directly impacted by the shutdown.
However, data now shows that a majority of the CFAP funding went to non-specialty commodity farmers, including large scale cattle producers, dairy farmers and corn farmers. On July 13th, the USDA opened up CFAP eligibility to forty more fruits and vegetables, making much needed room for more specialty farmers to apply for aid.
Each of these funds, whether a loan or grant, are funneled through the USDA. This makes them out of reach for farmers who do not have a relationship with a bank approved by the Farm Service Agency, or who do not have Internet access. Finding an approved bank is particularly difficult for those who live in credit deserts, such as in the South and in Tribal Areas, Obudzinski explains.
“If you do not have access to a bank,” Obudzinski says, “or you do not have a bank that has an existing relationship with SBA, you’re not getting that funding.”
As many farmers expect the aid to be insufficient anyway, some decide not to apply at all—this is especially the case for farmers of color who, as The Washington Post recently reported, have experienced their loan applications being repeatedly delayed or denied.
“Many of these farmers don’t have the time to do the paperwork and are trying to keep their businesses during the pandemic,” Blanding adds. “They are saying it’s just not worth it.”
Dorathy Barker grows fruits and vegetables and raises cattle on a ten-acre farm in Henderson, North Carolina. She is also one of the founders of Operation Spring Plant, a nonprofit that connects minority farmers to financial resources. Barker says that several of the Black and Native American farmers she works with have been discouraged from applying because of bad experiences with USDA aid programs in the past.
“A lot of Black, Native American, and poor white farmers in North Carolina have bad credit,” Barker says. “That doesn’t mean they should be denied funding when they need it now.”
One Black farmer told her that he was denied funding for a PPP loan from his lender because he was told he has bad credit. The farmer, who had only been farming specialty vegetables and livestock for less than five years, needed money to buy a refrigerator unit so that he could schedule drop-offs with local restaurants.
“A lot of Black, Native American, and poor white farmers in North Carolina have bad credit,” Barker says. “That doesn’t mean they should be denied funding when they need it now.”
Stanley Hughes, a third generation Black farmer in Hillsborough, North Carolina, operates Pine Knot Farms with his wife, Linda Beach. With the help of four employees, Hughes and Beach grow tobacco, collard greens, and their locally renowned sweet potatoes on 126 acres of land.
But like other small farms right now, Pine Knots runs on a tight budget, and they don’t have time to travel the extra distance to the stores and markets that are significantly further away now.
When Hughes applied for an EIDL a few weeks ago, his application was denied because it lacked all of the required information, even though Pine Knots has been operating for more than 100 years.
“We didn’t even know about this program,” Hughes says, adding that Pine Knots is only making about 50 percent of what it was before the pandemic. “We need federal assistance to walk us and other farmers through the applications because we do not understand the questions.”
In contrast, a white livestock farmer from Missouri who wanted to remain anonymous says his experience obtaining an EIDL was relatively smooth. With a 450-acre farm, operated by two to four employees, he applied for the grant in early May and received $3,000 in aid within a few days.
“Farming is important at every level,” Blanding says. “The agency needs to value diversity in farm size and diversity in races of all farm sizes. Until the system changes structurally, farmers will fall through the cracks.”
The Missourian’s farm has been in his family since the 1860s, and so has the seven-decade long relationship with the family’s FSA-approved bank. He noted that a relationship to an FSA accredited financial institution, along with access to a savvy accountant, is crucial when it comes to the first hurdle of accessing federal funds.
“A dearth of local lenders, especially those willing to work with small-in-acreage farmers, certainly limits the ability of small and minority farmers to take advantage of these programs,” he says. “All [of this] is compounded by the history of racism in federal farm programs.”
For Blanding, the nonprofit organization’s director, getting funding into the hands of Black rural farmers will only happen when federal agricultural agencies reckon with the racial disparities to which they have contributed.
“Farming is important at every level,” he says. “The agency needs to value diversity in farm size and diversity in races of all farm sizes. Until the system changes structurally, farmers will fall through the cracks.”