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Black Farmers Discrimination Lawsuit Could Cost USDA Billions

posted on July 4, 2008

Hello, I'm Paul Yeager. Mark Pearson is off this week. It's official... the best-known stock market index in the world is now a bear market.

A late sell-off Wednesday pushed the Dow Jones Industrial Average down 20 percent below its October high of over 14,000 to meet the standard definition of a bear market.

General Motors led the Dow's retreat into "bear country," plummeting 74 percent since the index posted its all-time high last October. But GM isn't the only blue chip stock hemorrhaging red ink.

Fellow Dow components Citigroup and Bank of America each have tumbled more than 50 percent over the same period as losses and write-downs at the world's largest financial institutions topped $400 billion following the collapse of the U.S. mortgage market.

The Dow trended slightly higher in a holiday-shortened session Thursday. But soaring fuel prices continue to weigh heavily on investors. Crude oil and gasoline both set record highs again this week, reminding motorists that 4th of July or not, America is anything but "independent" of foreign oil.

The price tag also appears to be rising on a landmark civil rights settlement between black farmers and the Agriculture Department.

Black Farmers Discrimination Lawsuit Could Cost USDA Billions

The ongoing legal battle between black farmers and USDA could reach unprecedented financial costs in coming years. A provision in the recently enacted farm bill guarantees black farmers a new opportunity to apply for financial damages against the Department of Agriculture.

Despite an initial price tag of $100 million, some lawmakers now budget the potential figure of courtroom damages at more than $3 billion. The mounting costs could heap additional financial pressure on the farm bill and the U.S. government. But one of the bill's original framers, Iowa Senator Charles Grassley, disputes both the $3 billion price tag and the notion that justice for black farmers should be measured financially.

Sen. Charles Grassley, R – Iowa: "There are thousands of black farmers that in a sense haven't got justice. The amendment is not to guarantee them any money it's just to open the courtroom door once more to see if they have a case."

Grassley says the $100 million figure was not misleading but he would have preferred a higher estimate in the farm bill.

Citing widespread, long-term racial discrimination against black farmers by USDA officials, thousands of African-Americans won a landmark settlement more than 10 years ago. While some applicants received a $50,000 tax-free payment, the vast majority never received a dime from the federal government. An investigation by the Environmental Working Group estimates more than 90 percent of applicants – nearly 65,000 Africans Americans - were denied payment. An overwhelming number of farmers were dubbed "late filers" by USDA when their applications trickled into office inboxes after a 180-day deadline.

John Boyd, President – National Black Farmers Association: "How many times is it gonna take for the United States Department of Agriculture to know that we mean business and we're not gonna stop until they get off the dime and settle these cases."

John Boyd, President of the National Black Farmers Association, or NBFA, has spent much of the past 10 years calling on USDA to reopen the landmark lawsuit for additional applicants. The NBFA claimed victory when Congress approved the 2007 farm bill but it's still unclear how many farmers will actually receive federal damages.

Iowa Republican Charles Grassley told Market to Market this week that black farmers legislation may be under attack from congressional leaders and USDA.

Sen. Charles Grassley, R – Iowa: "Quite frankly despite considering the fact the Department of Agriculture didn't want us to do this and there were members of Congress that didn't want it but they really didn't have the guts to stand up and say so. They didn't want to appear to be against the cause of civil rights for black farmers so nothing was said. But behind the scenes I think there are bureaucratic as well as congressional efforts to denigrate it because they think justice is done. Obviously, I disagree with that."

Lawyers involved in the new USDA settlement say it remains unclear how courts will organize and disperse any damages.


Tags: African Americans agriculture Congress farmers government markets news USDA Wall Street