The Indian Tribal Land Acquisition Loan Program and the Highly Fractionated Indian Land Loan Program are two federal programs designed to provide land-related assistance to Native people. The Land Acquisition Loan programs provides financing to help Tribes become owners of additional property within reservations. This program is financed and serviced by the Farm Service Agency with funding from Congressional appropriations as part of the USDA budget.
The Fractionated Indian Land Loan Program helps Tribes, Tribal entities, and Tribal members alleviate the problems caused by fractionated interests on tribal lands. This program is financed through revolving loan funds from the Agency and serviced through the approved intermediary lender.
Background
Indigenous land ownership in the U.S. today is the direct result of a long history of violence, court rulings, and Congressional actions, beginning with the introduction of European concepts of private property with colonization and including authorizing wars, passing laws, annexing territories, and breaking treaties. This land loss occurred disproportionately on high-quality land. According to the 2017 USDA Census, Indigenous people make up less than 2 percent of farmers and own less than 6 percent of farmland.
From Regaining Our Future:
“Because of the General Allotment Act of 1887 (also called the Dawes Act), reservation land was divided up and allotted to individual tribal members. When an allottee died, ownership of the allotted parcel was divided up among all the heirs, with each Indian heir receiving an undivided interest in the parcel. With the passing of each generation, the number of owners of such a parcel of land has grown exponentially, resulting in hundreds of owners of each parcel. The resulting highly fractionated ownership of much Indian land today reduces the usefulness and value of the land and increases administrative costs to the U.S. government and the tribes. Amendments to current programs could reduce the waste and expense burden on the individual owners, the tribes and the federal government by encouraging individual Indians to purchase and consolidate highly fractionated lands, funding local financing intermediaries and ending duplicative appraisal requirements.
The Highly Fractionated Indian Land Loan Program was reauthorized in Section 5402 of the 2014 Farm Bill and amended to enable it to run more effectively. Congress allowed the authorized funds under that program to be delivered in loans through an approved intermediary relending organization and authorized the Secretary to make direct loans. The program expands eligibility of the program to individuals. These new provisions were sought after FSA conducted tribal consultation in efforts to find ways to improve the ability of the program to reach its original purposes. The 2008 Farm Bill authorized this program at $10 million annually, but those funds were never utilized due to the structure of the program. The 2014 Farm Bill sought and achieved changes to the program delivery which have since gone into effect with the passage of new regulations and the selection of the first annual relending entity. The intent of the program is to be a useful tool to consolidate lands for agricultural purposes within Indian Country.”
Recommendations
(1) Expand funding for, and effectively implement, the Indian Tribal Land Acquisition Loan Program and the Highly Fractionated Indian Land Loan Program, which provide financing for costs related to land purchase and help address fractionated property interests.
(2) Amend and expand the Indian Land Acquisition Program to provide loans for individual Indians to purchase highly fractionated lands. The existing program is open only to the Indian tribes and tribal corporations established pursuant to the Indian Reorganization Act.
(3) Operate these programs as grant programs rather than loan programs to facilitate access to land for Tribes and Tribal members.