Debt relief for socially disadvantaged farmers

Section 1005 of ARPA provides for substantial debt relief for socially disadvantaged farmers. ARPA, through the Ministry of Agriculture, provides for debt relief of up to 120% of the farmer’s outstanding debt as of January 1, 2021.

Who is eligible?

ARPA uses the definition of socially disadvantaged farmers found in Section 2501 (a) of the Food, Agriculture, Conservation and Trade Act 1990, which means a farmer or rancher who is a member of a group whose members have been subjected to or ethnic prejudice because of their identity as members of that group. This definition includes African Americans, Native Americans or Alaskans, Hispanics or Latin Americans, and Americans of Asian or Pacific Island origin.

Which loans are eligible?

ARPA provides debt relief for two broad categories of agricultural loans: “direct agricultural loans granted by the Secretary [of Agriculture]”to the farmer or breeder and” agricultural loans guaranteed by the secretary [of Agriculture]”to the farmer or rancher. ARPA defines agricultural loan as” a loan administered by the Farm Service Agency under subheading A, B or C of the Consolidated Farm and Rural Development Act (7 USC 1922 and following.) “and” an agricultural storage facility loan from the Commodity Credit Corporation. “This includes, among others, direct agricultural loans from the USDA Farm Service Agency, loans guaranteed by the USDA and agricultural storage loans from the Commodity Credit Corporation.

What steps can you take now?

While the Department of Agriculture is still developing the procedures and guidelines for implementation, one thing that minority farmers with eligible unpaid farm debt can do at this time is to ensure that your ethnicity and your race are registered with the Ministry of Agriculture. To do this, submit a Form AD-2047, including your race and ethnicity in sections 6A and 6B. You can submit the form to your local USDA service center, which you can find here.

Other forms of support for socially disadvantaged farmers

In addition to debt relief, section 1006 of the law includes various allowances for grants, training and education. ARPA is allocating $ 1.01 billion for these additional programs. These funds are to be used to provide the following to farmers, ranchers, forest owners or other members of socially disadvantaged groups socially disadvantaged:

• Awareness raising, mediation, financial training, capacity building training, training and support for cooperative development, and other technical assistance on issues relating to food, agriculture, agricultural credit, agricultural extension, rural development or nutrition
• Grants and loans to improve access to land
• Creation of an equity commission to deal with racial equity issues within the Ministry of Agriculture and its programs
• Support for agricultural research, education and extension
• Additional funding for certain scholarships and programs to provide internships and federal employment pathways
• Financial assistance to socially disadvantaged farmers, ranchers or forest owners who are former agricultural loan borrowers who have suffered adverse actions or discrimination or prejudice in the programs of the Ministry of Agriculture

The Ministry of Agriculture is currently reviewing and collecting feedback to implement ARPA and will provide further guidance and information related to these programs.