USDA Secretary Tom Vilsack announced Thursday morning that his department would provide $67 million in loans to farmers struggling with heirs’ property issues.
Heirs’ property operators are farmers who have a family tie to their land but not a legal one. For instance, if a land owner died without a will, that land would be divided up among the owner’s heirs. Once they passed on, the land would be further divided among their heirs. While property might be in a single family’s control for generations, they don’t have legal title or claim to the land. That means they cannot easily sell the land or consolidate fractured acreages.
Issues with heirs’ property most significantly impact Black farmers in the South, although Latinx and Indigenous farmers have also dealt with its repercussions. After the Civil War, the federal Homestead Act gave Black families land, mainly across the South, and many of them became land holders for the first time. But since many Black people didn’t have access to legal services at the time, they often didn’t have official wills to legally pass down property. Instead, most property was simply inherited, or it changed hands through private deals. If landowners don’t have the right documentation for their land, it makes them more vulnerable to developers who can buy title out from under the families who have been working that land for generations. It also contributed to the racial wealth gap by stifling Black families’ ability to build generational wealth.
That became a bigger problem after President John F. Kennedy’s 1961 Agricultural Stabilization and Conservation Services came into effect. At the time, the USDA established a loan program to help farmers, but it disproportionately helped white farmers who used title loopholes to buy and aggregate vast tracts of land. The USDA recently called heirs’ property issues the “leading cause of Black land loss” in the country. Some estimates say that more than 95 percent of Black landowners have been displaced in the last century.
Today, approximately a third of Black-owned land in the South is considered heirs’ property, and this loan program is an effort to reverse the wrongs of the past administrations. At the funding announcement, Illinois Congresswoman Cheri Bustos was emphatic, noting that, in her district, there was only one Black farmer listed out of 9,600. “In the past, the USDA and our country did wrong by Black farmers, dead wrong,” Bustos said. “As someone who has proudly served the agriculture community for many years now, I’m here to say that it’s past time that we take steps to fix it.”
Georgia Senator Raphael Warnock also joined the call, calling the loan program a “critical step in the right direction.”
When asked, Vilsack said this loan program is not associated with the planned loans to Black farmers that were curtailed by courts earlier this year. Those loans were part of the Coronavirus Relief Package, while this program was conceived as part of the 2018 Farm Bill, although no work was done on it until 2021.
The Farm Service Agency will open the application window in late August, and intermediary lenders can apply for loans of up to $5 million, at a one-percent interest rate. Those intermediary lenders, such as co-ops, nonprofits and community credit unions, will then lend those funds out directly to farmers and families. The money will be used to help consolidate fractured land, pay legal fees to obtain title to land and costs associated with creating succession plans for their land.