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Senate Democrats see farm-aid pay as unfair

September 16, 2020 at 2:21 a.m.

Farmers in U.S. Agriculture Secretary Sonny Perdue's home state of Georgia received the highest average payments last year under President Donald Trump's trade aid program, the Government Accountability Office found in a report released Monday.

Senate Democrats said the findings confirm their long-standing complaints that Trump's $28 billion trade aid program was unfair to family farmers in the Midwest because farms in the South got higher average payments and a large portion of aid went to bigger farms.

It also found that eight of the top nine states -- measured by average payments per acre of farmland -- were in the South, a region at the heart of Trump's political base. More generous payment rates for cotton and sorghum, which are grown in Southern states, were part of the reason for the disparity, the report said.

Georgia led the nation with payments of $42,545 per farmer versus a national average of $16,507 per farmer and $119 per acre versus a national average of $57 per acre in last year's trade aid program, the GAO found.

"It's just not been fair," said Sen. Debbie Stabenow of Michigan, the top-ranking Democrat on the Senate Agriculture Committee, who along with other Democrats requested the investigation. Perdue "certainly put together a program that favored the crops in his home state."

In terms of overall payment totals, however, substantial amounts of farm aid were deployed outside the South. According to the Government Accountability Office, more than $1 billion apiece went to Minnesota, Iowa, Illinois and Kansas.

Rural voters are a key constituency for Trump as he heads into the November election, and government aid has become an increasingly important source of income for farmers during the financial stresses of the coronavirus pandemic, the trade war with China, a commodity glut and wild weather. Trump has drawn overwhelming support in Southern states and his dominance of rural areas was crucial to his narrow victories last time in critical Midwest swing states.

The accountability office's report didn't draw any conclusions about the propriety of how aid was distributed.

A Department of Agriculture spokesperson said in an emailed statement that aid payments were "based on trade damage, not based on region or farm size." A follow-up statement accused Senate Democrats of trying to twist the data.

In the midst of his trade fights with China, Europe, Canada and Mexico, Trump moved to lessen the blow to farmers, who were targeted for retaliation by those countries after the United States imposed tariffs on foreign metals and Chinese goods.

China, in particular, apparently tried to inflict pain on American farms by limiting imports of soybeans, corn and pork. Farm income has been weak across the United States since the trade war began, with bankruptcies rising.

Trump responded by greenlighting payouts for farmers hurt by his trade war, but that effort quickly became a sensitive political issue as Democrats accused the president of essentially paying off his core supporters to pursue his policy goals.

On a conference call on Monday, Sen. Sherrod Brown, D-Ohio, accused Trump of neglecting the Midwest by allocating so much money to Southern farms.

"He's betrayed Midwestern farmers, just like he's betrayed Midwestern autoworkers," Brown said.

The USDA statement said the Midwest region received more than 68% of overall aid payments, with the top five recipient states Iowa, Illinois, Minnesota, Texas, and Kansas.

Stabenow said Midwestern states have "more individual farms" and the higher payments per farmer and per acre in the South suggest "deep regional inequities with Southern farms benefiting more than other regions."

She said that the next installment of farm aid for pandemic relief should include congressional instructions on distribution rather than giving Perdue a "blank check."

"While the Democrats in Congress have been launching false attacks about USDA's MFP program for months, they have yet to offer concrete ideas on how to make the program stronger," said Alec Varsamis, an Agriculture Department spokesman, referring to the program's formal name, the Market Facilitation Program.

A study by Kansas State University economists published in May found cotton farmers were dramatically overpaid under the trade bailout, with a 2019 payout that was 33 times the estimated financial impact of tariff disputes with China and other nations. Georgia is the nation's second-largest producer of cotton after Texas, a large state where a various crops are grown.

The economists found growers of many other commodities also were overpaid, with corn farmers paid 1.4 times estimated trade losses and soybean farmers 2.4 times estimated trade losses.

The accountability office said the top 25 farms in the program received the largest payments -- an average of $1.5 million per farm in trade aid last year.

The USDA defended the portion of aid given to larger operations.

"Large farmers account for 10% of all farms, but those farmers operate 52% of total farmland and generate 79% of the total value of production," according to the USDA statement. "As a result, trade impacts on these farmers was relatively greater, which means they received higher payments."

Information for this article was contributed by Mike Dorning of Bloomberg News and by Alan Rappeport of The New York Times.


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