Reopened black farmers settlement could cost USDA

In this Sept. 28, 2004 file photo provided by the National Black Farmers Association (NBFA), John W. Boyd Jr. (right) and Tony Walker of the NBFA lead a march riding a horse-drawn covered wagon past the offices of the U.S. Department of Agriculture in Washington, calling attention to issues with farm loans. When Congress reopened the government’s discrimination settlement with black farmers, lawmakers budgeted just $100 million for damages. With more than 70,000 potential claimants in the reopened settlement, it seems that amount may be far too small. (AP photo/NBFA, Roy Lewis)

Ben Evans

WASHINGTON — When Congress reopened the government’s discrimination settlement with black farmers, lawmakers budgeted just $100 million for damages. They probably should have handed over a blank check.

With more than 70,000 potential claimants, the liability could exceed $3 billion — three times what was paid out in the original 1999 agreement that settled a class-action lawsuit brought on behalf of thousands of black farmers against the U.S. Department of Agriculture (USDA).

The farmers, mainly from the South, alleged that local USDA offices routinely denied them loans, disaster assistance and other aid frequently given to whites — practices that often drove them out of business.

At that time, 22,500 farmers filed claims, and nearly two-thirds were awarded a total of $981 million in damages.

But an estimated 73,000 others were denied payments because they missed the deadline for seeking claims. Many said the six-month filing period was too short and that they were unaware of the settlement until it was too late.

The deadline was extended for nearly a year for those who could show extraordinary circumstances, such as illness. But only a small fraction of late claims qualified, and federal courts repeatedly denied subsequent requests to reopen the settlement.

The settlement was reopened thanks to legislation added to the farm bill passed in May that gives another chance to anyone who filed late claims. Supporters acknowledge that the $100 million was an arbitrary amount that will not come close to covering the actual cost of the settlements. Yet the measure ran into little opposition during the months-long debate on the farm bill, mainly because of the artificially low price tag.

“The reality is that we had to fix some dollar amount to this provision because that’s what the House rules require,” said U.S. Rep. Artur Davis, a Democrat from Alabama who was a lead sponsor of the proposal.

With a higher estimate, he said, lawmakers probably would have stripped the provision.

Just days after it passed, more than 800 people sued in U.S. District Court in Washington. Lawyers working on the case say they expect tens of thousands more.

An informational session hosted by Davis in mid-June in Tuskegee, Ala., drew more than 1,000 people.