Federal Court Says USDA Disaster Relief Program Can’t Discriminate Against White Farmers

Federal Court Says USDA Disaster Relief Program Can’t Discriminate Against White Farmers

The federal government may not discriminate against white farmers when it awards disaster aid, a federal court has ruled. Earlier this month, Judge Matthew Kacsmaryk of the Northern District of Texas temporarily blocked the United States Department of Agriculture (USDA) from making payments to farmers based on their race and sex under its 2022 Emergency Relief Program (ERP).

I thought I had seen the last of these lawsuits over the USDA’s blatantly discriminatory relief programs when the courts shot them down, one after another, during Covid three years ago. I wrote about one of those cases, Holman v. Vilsack, here.

In Holman, a white farmer sued the federal government over its program offering loan relief to “socially disadvantaged” applicants—i.e., Blacks and other minorities—while expressly denying it to similarly situated white farmers. That practice, he argued, violated his right to be treated equally under the law, and the court agreed.

Holman was then the latest in a line of lawsuits brought by non-minority plaintiffs who challenged the USDA’s race-based pandemic relief programs.  Its outcome reflected a judicial consensus that the government cannot rely on mere assertions of past “systemic racism” to justify present discrimination against Americans based on race.

But that didn’t stop them from trying again. In this month’s case, Strickland v. Vilsack, the USDA set up a disaster relief program to favor “socially disadvantaged” applicants under its 2022 ERP. Here, though, you have to drill down a bit to see how the agency awarded aid in a discriminatory way.

The devil is in the details. To carry out a policy of distributing less money, but to more farmers, the USDA set up a system called “progressive factoring” for calculating relief payments. The court explained:

Under a progressive-factoring model … farmers losing more recover less, while farmers losing less recover more. So, a farmer claiming losses of up to $2,000 may recover 100 percent of that loss, while a farmer claiming losses over $10,000 may recover only 10 percent of that loss.

…

Put simply, the more a claimant loses, the less he receives, while the less he loses, the more he receives.

In and of itself, progressive factoring was race-neutral, the court held. So far, so good—sort of.

The problem is that the USDA was not implementing the progressive-factoring calculus in a race-neutral way. So-called “socially disadvantaged” farmers were exempt from its adverse consequences. These included

(l) American Indians or Alaskan Natives;

(2) Asians or AsianAmericans;

(3) blacks or African-Americans;

(4) Hispanics or Hispanic-Americans;

(5) Native Hawaiians or other Pacific Islanders; and

(6) women.

Compounding the calculus further, the USDA also exempted insurance premiums from progressive factoring based on race and sex.

The bottom line for the white male farmers in this case was a ten-to-one disparity in the amount of financial aid awarded them: The plaintiffs each received only a tenth of what they otherwise would have received had they been of a different race or sex, the court observed.

The farmers claimed that Congress never authorized the USDA to base the amount of financial assistance provided by its programs on race and sex. That violated their Fifth Amendment rights to equal protection under the Constitution, and they asked the court to block the agency from implementing the program that discriminated against them for being born white men.

The court agreed, noting that “race-based classifications are presumptively unconstitutional,” a presumption the USDA failed to overcome when subject to strict scrutiny.

There was “little question,” the court held, that

ERP 2022, which is an ongoing program, is racially discriminatory. First, ERP 2022 applies progressive factoring, hurting farmers claiming large losses, and then exempts certain races from the adverse consequences. Second, ERP 2022 refunds insurance premiums and fees for certain races because the USDA believes that those races, qua race, are “more likely to lack financial reserves and access to capital.”

In fact, the USDA admitted that its program benefited women and minority farmers to the detriment of white male farmers. But it argued it had a compelling interest in remediating the effects of past discrimination—just as it had argued in the pandemic relief cases mentioned above.

Those arguments for “socially disadvantaged” benefits programs failed when challenged in the courts three years ago, and they failed again this month before Judge Kacsmaryk, who stopped the agency from awarding relief based on race and sex under the 2022 ERP while the farmers’ lawsuit plays out in court.

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