U.S. Markets open in 5 hrs 58 mins

Majority of Trump’s Trade Aid Went to Biggest Farms, Study Finds

Mike Dorning
Majority of Trump’s Trade Aid Went to Biggest Farms, Study Finds

(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. 

More than half of the Trump administration’s trade-war aid for farmers went to just one-tenth of the recipients in the program, according to an analysis of payments by an environmental organization.

Eighty-two farming operations received more than $500,000 each through April under the U.S. Agriculture Department’s Market Facilitation Program, according to the Environmental Working Group, which analyzed records it obtained through the Freedom of Information Act covering $8.4 billion in payments.

One farm, DeLine Farm Partnership of Charleston, Missouri, has so far received $2.8 million in trade aid payments, according to the analysis.

Senate Finance Committee Chairman Chuck Grassley of Iowa, a Republican who has long favored payment limits on farm subsidies, said the findings show the need for “hard payment caps” on the assistance.

Trade aid and other farm subsidies are “meant to help people over humps beyond their own control,” Grassley told reporters. “Some large farmers do have the benefit of having resources to get over those humps without government help.”

Roger Johnson, president of the National Farmers Union, the nation’s second-largest general farm organization, said the way the Trump administration has allotted trade aid “provides the means for the largest farms to get even larger,” at a time when the number of mid-sized family farms is declining.

“We are disappointed that USDA did not use its discretion to focus this aid on family farmers and ranchers who need it most,” added Johnson, whose organization says it represents about 200,000 farmers and ranchers.

The Trump administration has announced a new $16 billion round of trade aid for farmers this year as the trade dispute with China continues.

Acreage Planted

While the initial set of trade aid was based on crops produced, the new aid payments are to be tied to the acreage planted, making more explicit “the bigger the farm, the bigger the government check,” the environmental group said. The organization regularly analyzes and publishes detailed databases on federal farm subsidy payments, often highlighting disparities in aid.

The U.S. Department of Agriculture said in a statement that the program “is designed to provide a level of support that’s proportionate to a farm’s size and success.” It added, “Payments were made based on a producer’s individual production -- the more acres they farm and bushels per acre they produce, the more assistance they receive.”

“To our knowledge, USDA’s payments have all been made in accordance with our published regulations and existing procedures,” the department said.

The environmental organization, which published a searchable database of trade aid recipients on its website Tuesday, said the top 1% of farmers were paid an average $188,000 while the bottom 80% averaged less than $5,000.

Trade aid payments are capped at $125,000 per person in each of three categories of commodities: one for soybeans and other row crops; one for pork and dairy; and one for cherries and almonds.

‘Deeply Flawed’

Still, farms set up as corporations or partnerships can exceed those limits. Relatives and partners who don’t live or work on a farm can collect payments as long as they help make management decisions such as what to plant, said Scott Faber, senior vice president for government affairs for the environmental organization.

The organization also found that thousands of farm trade aid recipients live in the nation’s largest cities.

“When Market Facilitation Program payments continue to overwhelmingly flow to an elite group of the largest farms, wealthy landowners and city residents with no real connection to the day-to-day operations on the land, it’s clear the program is deeply flawed and not delivering aid to those farmers in desperate need,” said Donald Carr, a senior adviser to the group.

The analysis and searchable database covers payments to more than 563,000 participants in 2018 through April 2019. Illinois received the largest share of the market facilitation payments, totaling $1.1 billion through April, followed by Iowa, which received $979 million, and Minnesota, which received $676 million.

The database only covers payments made directly to farmers. Last year’s $12 billion farm trade assistance package also included other programs, including commodity purchases and export promotion assistance.

(Updates with Johnson comment beginning with sixth paragraph.)

To contact the reporter on this story: Mike Dorning in Washington at mdorning@bloomberg.net

To contact the editors responsible for this story: Joe Sobczyk at jsobczyk@bloomberg.net, Laurie Asséo, Justin Blum

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.