The Trump administration should immediately reform its multibillion-dollar trade-war bailout for farmers and ranchers so money flows to the producers who are hurt the most and aid is focused on family-sized farms, said Senate Democrats on Tuesday. In a 12-page report, Senators said the administration is “picking winners and losers between regions and crops” and unduly helping big operators by setting a $250,000 maximum payment, double the usual limit.
“The administration must improve its trade assistance program prior to the next potential payments in November and January,” said 17 Democrats, including the party’s leadership team in the Senate, in a letter to Agriculture Secretary Sonny Perdue.
“Criticism is easy,” said a USDA spokesperson. “The fact of the matter is that USDA has provided necessary funding to help farmers who have been impacted by unjustified retaliatory tariffs.” Sixty percent of Market Facilitation Program payments — the official name for Trump tariff payments — have gone to the Midwest “and the top 5 recipient states from the 2019 MFP program are Illinois, Iowa, Kansas, Nebraska and Minnesota, which directly refutes the claims made in this report.”
As of Tuesday, the USDA has disbursed $6.8 billion in trade-war payments on this year’s production, including $6.5 billion for row crops such as corn, soybeans and cotton, $245 million for livestock and dairy, and $67.3 million for so-called specialty crops that include cranberries, grapes, sweet cherries, ginseng and six types of nuts.
Perdue said last week that a second tranche of payments would be issued later this month or in early December. Up to $14.5 billion is available for cash payments to producers for this year’s crops and livestock. The administration offered half of the money, $7.25 billion, in the first tranche, with two additional tranches of $3.6 billion each to follow in November and January “if conditions warrant.”
“While farmers in the Midwest and northern Plains have been affected the most, Southern farmers received the highest payment rates,” said the Democratic report. “Payments (were) made to billionaires and foreign-owned companies, including $90 million to JBS, a Brazilian company … There is growing concern that some of the damage to export markets will either be permanent or take decades of investment to recover.”
Trade-war payments are being sent to 2,901 counties, with 193 counties having payment rates of $100 an acre or higher. “Of these 193 counties, over 95 percent are in Southern states,” Georgia, Mississippi, Alabama, Tennessee and Arkansas, said the Democrats in saying payments were skewed. Soybeans, grown chiefly in the Midwest, suffered a larger decline in price than did cotton, grown almost exclusively in the South. In addition, they said, payment rates may be dramatically different, more than $100 an acre in some instances, for adjoining counties under USDA’s formula that apportions payments among counties in relation to estimated agriculture export losses.
House Agriculture chairman Collin Peterson raised two points in a letter to Perdue that were echoed by Senate Democrats: Dairy payments are based on a farm’s historical production rather than current production and the MFP does not cover all commodities damaged by the trade war. Peterson wrote to Perdue on Nov. 1 to offer his help in improving MFP. The stopgap payments are appreciated, he said. “However, I am hearing from producers in my district regarding the inequities that have been create in the operation of the MFP program.”
The National Farmers Union, the second-largest U.S. farm group, said the bulk of trade-war payments might go to big operators because the maximum payment is $250,000 per farmer, compared to $125,000 in the farm program. The USDA also allowed the largest operators, with more than $900,000 in annual adjusted gross income, to receive MFP payments if most of their income is from farming, “paving the way for millionaires to claim an even larger share of assistance,” said the NFU.
The report, “President Trump’s ‘aid not trade’ policy,” is available here.