Report Says Ag Lenders Discriminate
Women and minority farmers are consistently denied agricultural loans, according to a report released by the U.S. Government Accountability Office.
Farmers and ranchers rely on loans to buy land and purchase supplies and equipment. Most farmers in need of cash apply for credit through commercial banks, a network of lenders known as the Farm Credit System, or the U.S. Department of Agriculture Farm Service Agency.
Ashley Smith with Black Soil, an organization that aims to reconnect black Americans to agriculture. Smith said many black farm families face an uphill battle when it comes to obtaining agricultural credit to keep their operations running.
"So in 2012, the farm census reported there were 450 black farmers, growers and producers out of around 76,000, which brings you to about 1.4%," Smith said. "We have seen the firsthand experience of these discriminatory lending practices."
Lending-industry representatives and federal officials interviewed by the report's authors said socially disadvantaged farmers are more likely to operate smaller, lower-revenue farms, have weaker credit histories, or lack clear title to their farmland - all of which can make it difficult for them to qualify for loans.
Smith said it has been two decades since black farmers won a class-action lawsuit against the USDA for racist and discriminatory lending practices. Still, she said, the agency has plenty to account for.
"And then there's also been a recent study that has stated that the USDA distorted data to continue its discriminatory practices, so it's just very murky," she said.
The report acknowledged that some lending agencies have conducted outreach to socially disadvantaged farmers, but its authors said the effectiveness of these efforts is unknown.