Farmers discriminated against by USDA loan programs eligible for compensation

Published 2:54 pm Wednesday, December 27, 2023

In 2022, President Joe Biden signed the Inflation Reduction Act into law. Among the bill’s many provisions is one that may bring a windfall for some Kentucky farmers.

Section 22007 established the USDA Discrimination Financial Assistance Program, which allows farmers who faced discrimination when trying to get USDA farm loans before 2021 to apply for up to $500,000 in compensation.

The law set aside $2.2 billion for these reparations, which are available to farmers, ranchers and landowners.

More than 10,000 applications from White, Black, Hispanic, Asian and American Indian landowners, men, women and veterans have been submitted since the program launched in July, said Myles Caggins III, spokesman for Windsor Group LLC, an agency helping farmers apply for the program.


With the passage of the Inflation Reduction Act, the U.S. government acknowledged historic racial, gender and veteran discrimination by loan officers working for the U.S. Department of Agriculture.

This discrimination might include denying access to low-interest rate loans, loan servicing, grant programs and assistance provided to others.

Maybe it took a white farmer the typical 30-45 days to close a loan, while a Black farmer had to wait 18-24 months. Or a veteran farmer was denied a loan he needed to grow his crops for the season.

Agriculture requires quick liquidity to be productive, said Ashley Smith, Black Soil Kentucky CEO and leader of DFAP outreach in Kentucky. So these denials might have caused irreparable harm to a farmer’s business relationships or ability to financially support themselves.

Caggins told the story of a farmer in Georgia who applied for a loan in the early ’70s to expand his hog pen from 12 to 80 hogs. He was denied a loan, so his operation never grew.

That farmer was able to calculate his estimated loss based on the dollar value and lifecycle of a hog and the price of a hog over the years.

How does the application process work?

The 40-page DFAP application is a ten-step process, with four main parts, Caggins said. It is due Jan. 13, 2024.

First, farmers, ranchers and landowners will have to provide identification.

Second, they will have to prove that they own land, through documentation like property records, tax records, bills or a USDA farm registration number.

Third, they must prove they have applied for a USDA farm loan administered by the Farm Service Agency or its predecessor, the Farmers Home Administration.

They can use letters and copies of their application for this. If they’ve lost the paperwork over the years, the program will accept statements, usually with witnesses.

Fourth, and most importantly, applicants have to describe how the USDA’s discrimination impacted them financially.

Caggins said that the better farmers can tell their story and paint the picture of their losses, the better chance they have to recoup those losses.

“The people who will be reading these applications will be sitting very far away from any farmlands in places like Washington, D.C., and they’re just going to look at the stories and compare them against each other from North Carolina to Hawaii and Guam,” he said.

While the DFAP application is free and does not require a lawyer’s involvement, applicants may retain attorneys to help them tell their story.

Caggins emphasized that DFAP is not a grant, loan or settlement. Recipients of this money will not have to use it for any specific purpose or pay anything back. They can still be involved in lawsuits concerning USDA discrimination.


The USDA is using contractors to spread awareness of the program due to a historic lack of trust among farmers.

“If a USDA representatives came knocking at the door to say, ‘Hey, here’s a new program for you,’ farmers would be highly questionable or even have disdain or be turned off by them because that would probably be the same person who might have caused them the problems in the first place due to discrimination,” Caggins said.

Windsor Group is responsible for the 29 states east of the Mississippi River, including Kentucky. They hired state directors, including Smith, and have partnered with local organizations for the most effective outreach.

Smith said that her team has worked with several government agencies to find potential applicants.

They’ve also traveled from eastern to western Kentucky holding seminars and visiting churches, speciality agriculture stores and extension offices. The USDA gave them a list of 17 counties to focus on where they might find the target demographics.

“That’s what ag is all about—working together, being collaborative, meeting people where they are in their own community,” Smith said.

Visit for more information on how to apply and technical assistance.