Judge throws out farmers’ lawsuit
FARGO, N.D. (AP) – A federal judge has thrown out a lawsuit filed by farmers across the country over the government’s attempt to recoup millions of dollars from bailouts written in the late 1980s. While the bailout contracts are “poorly drafted and confusing,” they do say the farmers owe the government at least some of the amount by which their land increased in value since the deals were struck, U.S. District Judge Rodney Webb wrote Tuesday.
The farmers’ lawyers will review Webb’s decision with their clients before deciding whether to appeal, attorney Courtney Koebele said Wednesday. The dispute hinges on a 1987 law that restructured or wrote off billions of dollars in farm loans. It has been credited with saving 23,000 farmers from foreclosure during the 1980s.
The lawsuit said the federal Farm Service Agency began asking for a total of $4.3 million from farmers in 1999. The agency asked each farmer for half the amount of money by which that farmer’s land increased in value from 1989, the year it agreed to write off loans above the actual value of the land.
The farmers contended they had to share only appreciation money if they sold their land or quit farming within the 10-year term of the contracts; otherwise, the deals would simply expire and they would owe nothing. The Agriculture Department, which oversees the FSA, said the contracts, called shared appreciation agreements, came due 10 years after they were signed – or sooner, if the farmers left the land.
In his decision, Webb said the 1987 Agricultural Credit Act was intended to help struggling farmers write down debt “and in return USDA would receive a portion of the increased value of the land.”
Webb also agreed with the government that it should be paid if a farmer quit the land or when the contract came due.
“In either event, recapture will take place; the only question is when,” he wrote. He also said there was nothing to support the farmers’ argument that the amount owed could be capped.
The lawsuit lists as plaintiffs more than 100 farmers from Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, North Dakota, South Dakota, Tennessee and Wisconsin.
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On the Net:
FSA: http://www.fsa.usda.gov