The Trump administration enabled multimillion-dollar payments to some large operators in this year’s round of trade war payments by obliterating the usual limits on farm subsidies, said the president of the National Farmers Union, which believes payments should reflect the production levels of family farms. Mammoth trade payments will inspire congressional criticism and jeopardize support for farm programs in the future, said NFU president Roger Johnson on Thursday.
“This is a big pile of money. That is the point,” Johnson told reporters, referring to President Trump’s offer of up to $14.5 billion in cash payments to farmers and ranchers, along with an additional $1.5 billion that will be used to buy and then donate surplus foods and on cost-share funds to develop new overseas markets for U.S. exports.
Payments through the Market Facilitation Program (MFP) would be larger than federal spending on traditional crop subsidies and crop insurance combined. The administration designed the Trump tariff payments on its own and will pay for them out of a multibillion-dollar reserve fund. On Wednesday, the USDA began sending payments to producers. More than 200,000 applications have been filed since enrollment opened on July 29.
“You will have multimillion-dollar payments to farmers that will be made public,” said Johnson, noting that urban lawmakers will complain, “None of my guys got a nickel.” Agriculture is the only sector of the economy to get trade war payments. The stopgap payments may turn lawmakers against farm supports, said Johnson.
The USDA set a maximum MFP payment of $500,000 per person or legal entity for this year’s production, with limits of $250,000 apiece for three production categories: field crops, specialty crops, and hogs and dairy. The $250,000 limit is twice the usual $125,000 limit per person for crop subsidies. Usually, people making more than $900,000 a year are ineligible for payments, but the USDA said they would be allowed to receive an MFP payment if three-quarters of their income is from agriculture.
“No matter the size of the farmer, everyone qualifies,” said Johnson.
Normally, spouses are automatically eligible for USDA payments, so a married couple could receive $1 million if they have a large enough operation. In addition, some farmers are partners in more than one farm business.
A Missouri soybean and cotton farm, Deline Farms Partnership, received nearly $988,000 in Trump payments for 2018 crops, said the Environmental Working Group last week. Two other Deline operations were also on EWG’s top 10 list. “Combined, the three Deline farm businesses have received more than $2.8 million through the bailout,” said the green group. Payments for 2018 had a nominal limit of $375,000 based on a payment of $125,000 for each of the three production categories. Overall, 54 percent of payments under the 2018 program went to 10 percent of recipients, according EWG.
The NFU, the second-largest U.S. farm group, contends that the farm program should be focused on family-size farms. “We believe payment limits should be directed to persons actively engaged in production agriculture and/or personal management, and be realistic, meaningful, transparent, and enforceable,” said the group in a policy statement. “We support directing farm program benefits to the production levels of family farm operators in such a way as to reduce government costs while furthering the sustainability and diversity of our family farms, our rural communities, and our natural resources.”
Reformers have tried for years to tighten the eligibility rules for farm subsidies. Iowa Sen. Chuck Grassley was thwarted in the 2018 farm bill when he tried to limit payments to farmers, their spouses, and one manager per farm. Instead, the farm bill widened the circle of eligible recipients to include nieces, nephews, and cousins.