Yet another dust-up is surrounding USDA's ag aid program — and that still another Government Accountability Office report has found wide differences among states and regions and crops in government aid.
Senate Democrats told Bloomberg that the GAO's findings “confirm their long-standing complaints that the administration's $28 billion trade aid program was unfair to family farmers in the Midwest since farms in the South got higher average payments. Also, a large portion of the aid went to bigger farms.
“It's just not been fair,” said Senator Debbie Stabenow, D-Mich., the top-ranking Democrat on the Senate Agriculture Committee. Secretary Perdue “certainly put together a program that favored the crops in his home state.”
Rural voters are a key constituency for the Trump administration as the president heads into the November elections. Government aid has become an increasingly important source of income for farmers amid the financial stresses of the coronavrius pandemic, the trade war with China, a commodity glut and wild weather.
The independent GAO investigation was requested by Senator Stabenow in February after she raised concerns about unfairness and mismanagement of the USDA Market Facilitation Program. Stabenow joined Sen. Sherrod Brown, D-Ohio, and producers to announce the report and discuss the findings.
“From the start, I've been concerned that the Trump Administration's trade payments have picked winners and losers and left smaller farms behind,” said Senator Stabenow. “By favoring Southern farms but providing no help to our cherry growers, USDA has not treated Michigan farmers fairly.
She called the uneven treatment a “pattern that we're continuing to see in USDA's COVID-19 relief program. And she called on the administration “to stop playing favorites and start helping the farms hit the hardest.”
She also called the administration's trade policy with China. and its continued efforts to undercut the Renewable Fuel Standards “mismanaged” and argued that the “administration has betrayed the small farmers who need help the most.”
She noted that eight of the top nine states with the highest payments per acre were in the South. The program paid farmers in Michigan an average of $54 per acre, compared to farmers in Georgia who received an average of $119 per acre, she said. Georgia leads the nation with average payments of $42,545 per farmer, more than double the average payment in Michigan of $15,367.
The payments for certain crops like cotton, which is primarily grown in the South, far exceeded payment rates for others. Less than 10% of payments went to farms that produced specialty crops, dairy, or hogs. “Most Michigan specialty crop producers were not even eligible for direct assistance,” she said.
In addition, she argued that large farms benefitted far more than smaller ones. USDA doubled the maximum payment from the current programs from the $125,000 per person the earlier program allowed to $250,000 per person this time around—a shift that directed more dollars to the largest farms and ignored smaller ones that were struggling. As a result, the top 1.3% of payment recipients received an additional $519 million.
GAO also found that the top 25 farms received an average of $1.5 million per farm, whereas the average Michigan farmer received $15,367.
She concluded that “instead of providing more support for the 9,852 largest farms, USDA could have targeted funding to the thousands of small and beginning farmers that are often more vulnerable to market swings.”
Senator Stabenow's criticisms are not new and she notes that continuing analyses show continued bias in the program. “Kansas State University researchers agreed with these findings in an economic analysis of the distribution of trade assistance, finding that cotton payments were 33 times more than the estimated trade damage,” she said.
A USDA spokesperson said the aid payments were “based on trade damage, not on regions or farm size.” A follow-up statement accused Senate Democrats of trying to twist the data.
She says the “next installment of farm aid for COVID-19 relief should include congressional instructions on distribution rather than giving Perdue a “blank check.”
USDA defended the portion of aid given to larger operations that “account for 10% of all farms, but operate 52% of total farmland and generate 79% of the total value of production. As a result, trade impacts on these farmers were relatively greater, so they received higher payments.”
So, we will see. Certainly, as generation after generation of voters increasingly lose touch with their ag roots — if any — expensive programs to subsidize and protect agriculture are likely to become increasingly difficult to pass. These trends also appear likely to lead to a type of agriculture defined more by social objectives than productivity and efficiency — trends producers should watch closely as they intensify, Washington Insider believes.