This week's White House budget proposal to cut crop insurance by 31 percent and to tighten eligibility rules for farm subsidies would save less in 10 years than the administration spent to mitigate the impact of the Sino-U.S. trade war on 2018 and 2019 farm production, said an economist.
Farmers are eligible for up to $500,000 apiece for the hurricanes, wildfires, floods and other disasters they faced in 2018 and this year, including Hurricane Dorian last weekend, said the USDA on Monday, with $3 billion in aid available. As it did in July for Trump tariff payments, the USDA set the maximum disaster payment at double the Congressional limit for farm subsidies.
Farmers and ranchers will receive a projected $10.7 billion in Trump tariff payments this year, the major reason that direct federal payments will amount to 22 percent of net farm income, say USDA economists. The trade war payments would be twice as large as last year's $5.1 billion, when the administration created the stop-gap Market Facilitation Program to mitigate the impact of the Sino-U.S. trade war on the agricultural sector.
Lawmakers are complaining about "all this welfare going to farmers" during the trade war and they might balk at providing more aid if there is a farm crisis, said House Agriculture chairman Collin Peterson in a broadcast interview. "It undermines us," said Peterson. "If we need to do something, it is going to make it very much more difficult to get political support to respond."
The Trump administration has spent notably less than commonly described on its package to mitigate the impact of the trade war on 2018 agricultural production. This year’s version may come closer to the $16 billion maximum trumpeted by the president because of more accommodating payment rules.
For the second time in 14 months, President Trump announced a multibillion-dollar government intervention to prop up the farm sector, a prominent casualty of the Sino-U.S. trade war. The first bailout, announced in April 2018, has sent around $8.3 billion in cash to growers so far; the new rescue will buy "agricultural products from our Great Farmers, in larger amounts than China ever did, and ship it to poor & starving countries in the form of humanitarian assistance," the president said on social media.
When Congress passes disaster bills, the government commonly compensates growers for loss of crops and livestock with the proviso they buy crop insurance in the future so they are protected against catastrophic damage. Companion bills filed by Democrats in the House and Senate would go a step farther by giving farmers the money to pay for the policies — a "terrible" expansion of the federally subsidized program, says a small-farm advocate.
Congress is expected to send President Trump a farm bill this week that makes nieces, nephews and first cousins of farmers eligible for crop subsidies, a setback in the decades-old drive to control farm spending. Farm groups learned of the decision ahead of the formal release of the final version of the bill. House and Senate negotiators signed the so-called conference report on Monday, the first step toward a final vote on the $87 billion-a-year bill.
With the farm bill potentially days away from congressional approval, House and Senate negotiators are ready to let distant relatives of farmers qualify for crop subsidies, said an ag lobbyist. Agricultural leaders in Congress hope to release details of the 2018 farm bill early this week, which would open the path to a final vote in each chamber in a matter of days.
Iowa Sen. Chuck Grassley feigned shock on Thursday that House and Senate negotiators did not want his farm subsidy reform in the final version of the five-year farm bill. “Surprise, surprise, surprise,” he said scornfully.