Department of Agriculture

Improvements in the Operations of the Civil Rights Program Would Benefit Hispanic and Other Minority Farmers Gao ID: GAO-02-942 September 20, 2002

The Farm Service Agency (FSA) runs a direct loan program that provides loans to farmers who are unable to obtain private commercial credit to buy and operate farms. FSA is required to administer this program in a fair, unbiased manner. GAO found that during fiscal years 2000 and 2001, FSA averaged 4 days longer to process loan applications from Hispanic farmers than it did for non-Hispanic farmers: 20 days versus 16 days. However, the processing times in three of the four states with the highest number of Hispanic borrowers was faster that it was for non-Hispanic borrowers in those states. FSA's direct loan approval rate was somewhat lower for Hispanic farmers than for non-Hispanic farmers nationwide--83 and 90 percent, respectively. The Department of Agriculture's (USDA) policies for staying foreclosures when discrimination has been alleged depend on the method used to lodge complaints. When an individual has a discrimination complaint accepted by USDA's Office of Civil Rights (OCR), FSA's policy is to automatically issue a stay of foreclosure until the complaint has been resolved. A GAO survey revealed that during fiscal years 2000 and 2001, FSA foreclosed on the loans of 600 borrowers nationwide. Although Hispanic farmers make up 4 percent of the agency's direct loan portfolio, 3 percent of these foreclosures involved Hispanic farmers. OCR has made modest progress in the length of time it takes to process discrimination complaints. USDA requirements direct OCR to complete its processing up through the investigative phase of complaints within 180 days of acceptance. It does not, however, have a time requirement for all of the phases of complaint processing.

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