A nonprofit publication of the Kentucky Center for Public Service Journalism

Government report shows agriculture lenders still discriminating against women, farmers of color

By Nadia Ramlagan
Public News Service

Women and minority farmers are consistently denied agricultural loans, according to a report released this month by the U.S. Government Accountability Office.

Farmers and ranchers rely on loans to buy land and purchase supplies and equipment. Most farmers in need of cash apply for credit through commercial banks, a network of lenders known as the Farm Credit System, or the U.S. Department of Agriculture Farm Service Agency.

The agrotourism organization Black Soil: Our Better Nature aims to reconnect black Kentuckians to their legacy and heritage in agriculture. (Tehran Jewell, owner and operator of A Taste of Jewell Farm/AgZinger, via PNS)

Ashley Smith is the co-founder of Black Soil: Our Better Nature, an agrotourism organization based in Lexington that aims to reconnect black Kentuckians to their legacy and heritage in agriculture. Smith said many black farm families in Kentucky face an uphill battle when it comes to obtaining agricultural credit to keep their operations running.

“So in 2012, the farm census reported there were 450 black farmers, growers and producers out of around 76,000, which brings you to about 1.4%,” Smith said. “We have seen the firsthand experience of these discriminatory lending practices.”

Lending-industry representatives and federal officials interviewed by the report’s authors said socially disadvantaged farmers are more likely to operate smaller, lower-revenue farms, have weaker credit histories, or lack clear title to their farmland – all of which can make it difficult for them to qualify for loans. However, the report noted despite these factors, women and minority farmers experience unfair treatment when applying for loans.

Smith said it has been two decades since black farmers won a class-action lawsuit against the USDA for racist and discriminatory lending practices. Still, she said, the agency has plenty to account for.

“And then there’s also been a recent study that has stated that the USDA distorted data to continue its discriminatory practices, so it’s just very murky,” she said.

The report acknowledged that some lending agencies have conducted outreach to socially disadvantaged farmers, but its authors said the effectiveness of these efforts is unknown.

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