WASHINGTON, Oct. 16 -- A U.S. Department of Agriculture spokeswoman on Tuesday denied that the agency is deliberately delaying the payment of an out-of-court settlement with black farmers who claimed racial discrimination.
In 1997, black farmers took their case to the U.S. District Court for the District of Columbia, alleging racial discrimination and corruption by USDA officials in several areas, including the allocation of federal loans. The claimants alleged that black farmers were denied loans they were entitled to, or were charged interest on loans they had never received, because the money had been stolen by corrupt officials. The agency decided to settle out of court last year.
In the settlement, the USDA agreed to provide $50,000 to each farmer who provided substantial evidence of credit discrimination. It also agreed to provide additional - and much larger -- compensation by forgiving loans made to farmers affected by discrimination and corruption.
The angry farmers, some of whom attended the Million Family March in Washington on Monday, said the government is trying to force them out of business by continuing to charge interest on loans that they say will eventually be forgiven as part of the settlement.
"We think America needs to know these injustices as well as black America in particular," said Eddie Slaughter of Buena Vista, Ga. He is a member of the Black Farmers and Agriculturalists Association of America. Members of the association joined the march from North Carolina, Alabama, Georgia and Florida to protest.
The argument is about how the settlement will be paid out. The farmers association said the USDA is asking for each of its members to prove how much of the settlement they should receive.
Slaughter points out that compounded interest is driving up the level of indebtedness. "While the USDA is not paying the true farmers on the land, the interest on our debt is being compounded," he said. "If my debt (of just over $200,000) has grown by $20,000 over 18 months, what do you think the payments are like for people who owe $3 million?"
The language of the settlement also upsets members of the black farmers association because they say it shifts the burden of proof to them and USDA will not open its books so they can get the information they need to prove their case.
USDA spokeswoman Mary Beth Schultheis said a moratorium prevents the farms from being foreclosed on by the agency. She denied that the USDA was responsible for any delays, explaining that a third-party facilitator was appointed by the court to settle claims.
"The money does not come from USDA," she said. "It is mailed from the facilitator and funds come from the Department of Justice judgment fund."
The spokeswoman said a total of 7,803 claimants had been paid more than $390 million as of Oct. 5
"The facilitator (the legal services firm Poorman Douglas) decides on individual cases," Schultheis said. "They have identified 2,700 loans in 68 claimants for cancellation."
She said the USDA, Poorman Douglas and the Justice Department are working in cooperation to speed up the settlement process for black farmers.
Repeated calls seeking comment from Poorman Douglas were not returned.
The Black Farmers and Agriculturalists Association of America insists that the USDA has delayed the process to hurt farmers.
"We feelthat there is a double standard," said Slaughter. "There are people that have broken the law, not been reprimanded, when they have taken money and charged it to black farmers that black farmers never received."
One case involved William Miller of Marshallville, Ga. Miller owns 1,300 acres, some of which he bought and some he inherited. Miller says USDA officials claimed he owed $770,000 on a loan he never applied for or received. Miller said he was later forced to file for bankruptcy due to the debt and interest. He has received a letter from the USDA saying that the loan charged to him had been a mistake, but says has never received any compensation.
The association says farmers being put off their land is a threat to the entire nation.
"When they put us out of business, not only are your grocery bills going to go up, but all of your other bills are going to follow suit and your living expenses are going to double and triple," said Morris James, a member of the group's executive board.
Under the settlement, the money is to be paid out over five years. Association members said the USDA has held up their funds for 18 months, that 40,000 farmers are affected and that 1.5 million acres of land is in the balance. They said they were trying to raise $250,000 to stage a mock trial to highlight individual cases of discrimination.