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Farmers reaping U.S.-aid bounty

Payouts flowing to cover losses from trade policy, virus hit by The New York Times | October 14, 2020 at 2:06 a.m.
A farmer in Monroe County near Brinkley harvests rice on last month. (Arkansas Democrat-Gazette/Staton Breidenthal)

WASHINGTON -- For the American farmers President Donald Trump is seen as counting on for support, the government money is flowing faster than ever.

Federal payments to farmers are projected to hit a record $46 billion this year as the White House funnels money to Trump's rural base in the South and Midwest, and the gush of funds has accelerated in recent weeks.

Farmers have been hit hard by the double whammy of trade policies and the coronavirus pandemic. According to the American Farm Bureau, debt in the farm sector is projected to increase by 4% to a record $434 billion this year and farm bankruptcies have continued to rise across the country.

Farmers are not the only constituency benefiting from the president's largesse: He has promised $200 prescription drug cards to millions of senior citizens, approved $13 billion in aid to Puerto Rico, which could help his prospects in Florida, and he directed the Agriculture Department to include letters signed by him inside millions of food aid boxes that are being distributed to the poor.

But few have gotten more help than the agriculture sector, which this year is expected to receive the largest government contribution to farm income since its previous record in 2005, according to the University of Missouri's Food and Agricultural Policy Research Institute. The breadth of the payments means that government support will account for about 40% of total farm income this year. If not for those subsidies, U.S. farm income would be poised to decline in 2020.

"There are both economic and political motivations for these payments," said Patrick Westhoff, who directs the University of Missouri's agriculture research center.

Last week, the Office of Special Counsel determined that Trump's agriculture secretary, Sonny Perdue, had improperly used his position to push the president's reelection by promising more help for farmers.

And at an August event in North Carolina, Perdue promoted Trump's reelection during remarks about the Farmers to Families Food Box Program, saying: "That's what's going to continue to happen -- four more years -- if America gets out and votes for this man, Donald J. Trump."

Perdue has been ordered to reimburse the government for the costs associated with his attendance at the event. In its response to the Office of Special Counsel, the Agriculture Department said that Perdue did not "encourage attendees to vote for a candidate or party or advocate for a partisan political group."

More money for farmers will soon be on the way. Congress recently agreed to replenish an Agriculture Department fund that Trump has used to disburse nearly $30 billion to farmers at his discretion with tens of billions of additional dollars. The Trump administration negotiated with Democrats to ensure the money was included in a short-term bill to fund the federal government, with the White House agreeing to more funds for child nutritional assistance in exchange.

TARIFFS, CORONAVIRUS

Farmers have been clobbered financially during the past two years, as Trump's trade wars with China and Europe led to tariffs on U.S. agricultural exports, including corn, soybeans, lobsters and peanuts. Then, this year, the pandemic interfered with global supply chains, and restaurant and hotel closures sapped demand. Farmers were forced to dump milk into manure pits and destroy millions of pounds of beans and cabbage.

Not all farmers received special payouts during the past three years, but the Trump administration has recently moved to ensure that those in critical states do not miss out.

That includes the tobacco industry, which was prohibited from receiving any of the trade assistance because of legal restrictions against subsidizing the sector. In September, the Agriculture Department quietly shifted some of the funds that were allocated to its Commodity Credit Corp. fund -- which legally cannot subsidize tobacco -- into a separate account that can bankroll the crop. Tobacco farmers will get up to $100 million in payments, easing some of the financial pain that has as been felt particularly hard in the battleground state of North Carolina.

[RELATED » Interactive: Economic impacts of covid-19 » arkansasonline.com/economy/]

SMALL FARMERS

The administration's efforts have not erased the economic malaise and frustration among U.S. farmers, who have seen sales fall and bankruptcies rise. The overall payouts have been large, but they have not always gone to the farmers who need them most. Critics, including Democrat and Republican lawmakers, have argued that small farmers have missed out on the bulk of the bailout, while large and some foreign-owned farms have benefited.

A Government Accountability Office report in September found that the bulk of $14.5 billion in farm aid from 2019 went to big farms in the Midwest and Southern states, including Perdue's home state of Georgia.

"I do not believe that this president has been a true friend to farmers," said Sen. Debbie Stabenow of Michigan, the top Democrat on the Senate's agriculture committee, who accused Trump of "subverting the law" in the way he had doled out farm aid.

In a statement, Perdue denied that the money was being deployed for political purposes.

"President Trump is once again demonstrating his commitment to ensure America's farmers and ranchers remain in business to produce the food, fuel, and fiber America needs to thrive," he said.

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