Black farmers settle for $1.25B

by

Published: February 19,2010

Tags: agriculture, discrimination, USDA

WASHINGTON — U.S. Attorney General Eric Holder and Agriculture Secretary Tom Vilsack yesterday announced the successful resolution of the longstanding litigation known as Pigford II. The settlement agreement, which is contingent on appropriation by Congress, will provide a total of $1.25 billion to African American farmers who alleged that they suffered racial discrimination in U.S. Department of Agriculture (USDA) farm loan programs. The settlement sets up a non-judicial claims process through which individual farmers may demonstrate their entitlement to cash damages awards and debt relief.

Vilsack said, “We have worked hard to address USDA’s checkered past so we can get to the business of helping farmers succeed. Because this Administration firmly believed that a full and final class-wide settlement was possible, the Administration requested $1.15 billion in the 2010 budget, on top of the $100 million already provided by Congress, to facilitate a settlement. I now urge Congress to provide the funding necessary to ensure that that these farmers and USDA can close this sad chapter and move on. .

In 1999, the USDA entered into a consent agreement with black farmers in which the agency agreed to pay farmers for past discrimination in lending and other USDA programs. Thousands of claims have been adjudicated, but thousands of other claims were not considered on their merits because the affected farmers submitted their claims after the settlement claims deadline.

To address the remaining claims, Congress provided these farmers another avenue for restitution in the 2008 Farm Bill by providing a right to file a claim in federal court. The total amount offered by the federal government in the agreement announced yesterday includes the $100 million appropriated by Congress in Section 14012 of the Farm Bill.

Last May, President Obama announced his plans to include settlement funds for black farmers in the FY 2010 budget.

The settlement is contingent on Congress appropriating the $1.15 billion that the President requested. Following the appropriation, class members may pursue their individual claims through a non-judicial claims process in front of a neutral arbitrator. Claimants who establish their credit-related claims will be entitled to receive up to $50,000 and debt relief. A separate track may provide actual damages of up to $250,000 through a more rigorous process. The actual value of awards may be reduced based on the total amount of funds made available and the number of successful claims.

A moratorium on foreclosures of most claimants’ farms will be in place until after claimants have gone through the claims process or the Secretary is notified that a claim has been denied. The claims process agreed to by the parties may provide payments to successful claimants beginning in the middle of 2011.

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