AFRICAN-American farmers lost roughly $326 billion worth of acreage during the 20th century, adding to the racial wealth gap in the United States, a new study has revealed.
Between 1922 and 1997, Black farmers in 17 US states lost their lands due to discriminatory policies of the US Department of Agriculture (USDA) and state-sanctioned violence and intimidation leading to the forced sale of their land.
The racism unleashed by the government intensified the rate at which African-Americans lost their ownership of rural lands, says the first study to quantify the present-day value of that loss.
Land and home ownership provide crucial opportunities to build wealth in the US and ‘the current racial wealth gap represents the intergenerational compounding of discrimination,’ said Dania Francis, economist at the University of Massachusetts-Boston and lead author of the study.
‘It’s important to put a numerical value on it that should be the measure we use when thinking about reparations,’ said Francis. ‘We’re actually empirically estimating the dollars that left the Black community.’
The present value of the land loss is akin to the market capitalisation of Target Corp., Starbucks Corp. and Ford Motor Co. combined as of January 2022, the paper showed.
It’s also a conservative estimate because it didn’t take into account the land Black households could have reinvested in business and education, Francis said.
‘While other Americans at the time were able to build wealth, through land ownership and homeownership, those black families whose land was dispossessed didn’t have that opportunity.
‘When huge groups of African Americans were denied that opportunity, it speaks to the intergenerational wealth gap that opened up in part due to this type of land loss,’ Francis said.
Dr. Darrick Hamilton, an economics professor at The New School and one of the study’s authors, said it was ‘not just theoretical, but empirical’, adding that these are ‘real losses that occurred’.
In 1919, African American farmers owned more than 16 million acres of land and the number has declined to 4.7 million acres according to recent consensus.
According to the census available regarding black farmers at the time, African American farmers represented more than 14 per cent of America’s farming population.
The number has fallen to less than one per cent in the most recent agricultural consensus in 2017.
Black farmers express their outrage over the ‘abysmal failures’ of the US government to eradicate systemic racial discrimination in society.
The number $326 billion is a conservative estimate according to the report authors, in part due to the fact that multiplier effects were not taken into account.
The American Rescue Plan Act has recently tried to provide debt relief to farmers of colour, however it has been currently stalled in court because white farmers argue the plan is discriminatory.
It was set up in 2021 to purchase food and agricultural commodities and to provide grants and loans for small to medium-sized food processors and distributors, partularly during the pandemic.
Meanwhile, analysis by Politico of US Agriculture Department (USDA) data published in 2021 showed that USDA programmes were still biased against Black farmers despite US President Joe Biden’s promises of fighting systemic racism and social injustice in US society.
Black rights advocates say Biden’s promise to make up for decades of racial discrimination in federal assistance to farmers by forgiving loans to Black farmers has shown ‘abysmal failures’.
USDA granted loans to only 37 per cent of Black applicants last year in one programme that helps farmers pay for land, equipment and repairs but accepted 71 per cent of applications from white farmers, according to the analysis by Politico.
In a grant programme to help producers weather the coronavirus pandemic, farmers of colour received less than one per cent of the payments even though they make up five per cent of all US farmers.
‘Black farmers and their advocates say that plan, while welcome, won’t fix the ongoing problem: Agriculture Department programmes are still biased against them,’ according to Politico’s investigation on the data.
‘These data affirm what our elder farmers have been saying about the US Department of Agriculture for decades,’ said Tracy Lloyd McCurty from the Black Belt Justice Centre Black rights advocacy group which represents Black farmers. It reveals the ‘abysmal failures’ of the government in dismantling pervasive racial discrimination against Black farmers.
Carolyn Jones, a Black farmer and executive director for the Mississippi Minority Farmers Alliance complained that the process put in place by USDA was not only racially biased but also complex.
‘The process put in place keeps you from being able to apply,’ Jones complained.
She cited issues including overly complex applications, a lack of access to a competitive market and outright discrimination as other obstacles that Black farmers faced.
A recent article in the Washington Informer reports a wider problem than that of dispossessed farmers. It says that most Black people have not implemented the appropriate strategies to secure and preserve generational wealth, and this leads to loss of property and also political power.
‘It’s not even just leaving something behind for our progeny,’ explained Jasmine Tyler, professor of the practice at the McCourt School of Public Policy at Georgetown University, where she’s also the executive director of the Policy Innovation Lab.
‘Of course, our ancestors could barely dream of survival in most cases, let alone having the actual ability to leave something behind,’ she said. ‘The hope of life itself was basically the inheritance that we were afforded.’
Inheritance, commonly referred to as generational wealth, refers to any assets passed down from one generation to the next – anything of value, including investment accounts like stocks and bonds, savings accounts, life insurance policies and cash. Cars, real estate, jewellery, businesses, and even heirlooms also count – anything of monetary value qualifies.
The transfer of wealth across generations, most commonly through property, is a significant vehicle for maintaining intergenerational wealth.
However, research shows that because African Americans start with less, they have less, if anything, to pass on to their children and grandchildren.
According to the 2019 Survey of Consumer Finances, the median wealth of a white household was $181,400, compared to just $20,700 for the median wealth of a Black household.
On average, a Black household owns around 11 per cent of the wealth of an average white one. Even when considering the slightly better measure of income ratio, a significant difference exists. The median income of Black households ($38,700) is only 58 per cent of the median income of white households ($67,200).
Gary Cunningham, president and CEO of Prosperity Now, a think tank with a mission to ‘ensure everyone in our country has a clear path to financial stability, wealth and prosperity,’ said the numbers are frightening when looking at Black generational wealth.
‘All of our research shows that it will take over 200 years for Blacks to equal the wealth that whites have today,’ Cunningham said. ‘In fact, we did a report several years ago that showed that by 2050, Blacks will have zero wealth. So, unless we do something very different, that pattern will continue.’
Tyler pointed to several ways that whites have maintained generational wealth.
‘We’ve long known that handing down assets is a way to maximise the general wealth of others. In addition, the avoidance of inheritance taxes was the route to not only solvency and financial success but also (to) accessing and wielding power,’ Tyler said.
And with that economic power came access to political strength, as well. Tyler said it’s not inconsequential that voter suppression often occurs in Black communities as they begin to secure financial prosperity. History shows that stripping Blacks of wealth often led to politicians who were in power who failed to represent the needs of Black communities who were also being deprived of political access.
‘We are not able because of the lack of generational wealth to compete with the political machines of the majority class, whether they be Democrat or Republican, in America’s two-party system,’ Tyler said. ‘That undermined power is experienced as a cumulative effect or cumulative undermining as fortunes continue to grow for the wealthy and the privileged, whether that’s through new privilege or through generational privilege, based on race and class.’
Tyler said the challenge extends beyond just homeownership and good jobs as the systems that protect the power and wealth of majority citizens have not held up for Blacks.
‘Sadly, studies show that African Americans who are able to generate wealth or at least have achieved homeownership, often fall back in future generations because of the challenges of everyday Black life,’ she said.