11.12.19

Senate Democrats Unveil New Report Detailing How Trump Administration Mismanaged Payments to Farmers for Trade Damages

New data shows how payments create deep inequities, benefiting farms that have experienced less trade damage

WASHINGTON – A group of Senate Democrats, led by U.S. Senator Debbie Stabenow (D-MI), Ranking Member of the U.S. Senate Committee on Agriculture, Nutrition, & Forestry, and Senate Democratic Leader Chuck Schumer (D-NY), released a new report detailing how the Trump Administration is picking winners and losers in their attempt to aid farmers affected by President Trump’s turbulent trade agenda. The data shows that in the wake of the trade uncertainty created by the President’s actions, the $25 billion in mitigation payments to help farmers has been distributed unevenly across the country, benefitting some regions more than others.

Specifically, the new report outlines that while farmers are in dire need of assistance, the Administration’s Market Facilitation Program (MFP) has treated farmers unfairly by, among other things, sending 95% of the top payment rates to southern farmers, who have been harmed less than other regions, and helping farms owned by billionaires as well as foreign-owned companies, including awarding $90 million in purchase contracts to a Brazilian company. In light of the report’s findings, the Senators also sent a letter to Agriculture Secretary Sonny Perdue, urging the U.S. Department of Agriculture (USDA) to improve its trade assistance program to better support small farmers and pursue a focused trade policy to rebuild the markets American farmers have lost.

“Farmers need help to stay afloat as this Administration’s erratic trade actions continue to harm our agricultural economy,” Senator Stabenow said. “The problem is USDA’s flawed aid formula is a short-term solution that picks winners and losers, while failing to adequately help the farms hit the hardest.”

“This report shows that as America’s farmers are grappling with extreme uncertainty caused by President Trump’s chaos, the Trump administration is using a flawed formula that helps big, wealthy farms and billion-dollar foreign-owned companies, while small farms get left behind,” Senator Schumer said. “The USDA must stop picking winners and losers, and ensure all of America’s farmers get the help they need—not just a lucky few.”

Over the past two years, President Trump has pursued a chaotic approach to trade that has created unprecedented uncertainty for American agriculture. While farmers are in dire need of assistance, according to an analysis of USDA data, the Administration’s Market Facilitation Program (MFP) has treated farmers unfairly by:

  • Picking Winners and Losers between Regions and Crops:

95% of top payment rates have gone to southern farmers, who have been harmed less than other regions

  • Helping Wealthy Farms and Foreign Companies Instead of Small Farms:

Payments made to billionaires and foreign-owned companies, including $90 million to JBS, a Brazilian company

  • Failing to Recover Market Access:

No long-term investment or plan for rebuilding markets

While farmers in the Midwest and Northern Plains have been affected the most, Southern farmers have received the highest payment rates. Looking at the first round of 2019 MFP payments per acre, the five top states are in the South. Additionally, the USDA trade assistance does nothing to target assistance to small and medium-sized farms that are most vulnerable to trade damage. The report also raises concerns that the Administration lacks a long-term strategy to rebuild the markets they have lost.  Highlights from the report include:

  • Farmers in Georgia have already received over $50 per acre in the first round of 2019 payments, while farmers in 34 other states received $25 per acre or less, including 14 states that received $10 per acre or less.
  • Both cotton farmers and soybean farmers received payments for the 2018 crop, despite the fact that cotton prices have increased while soybean prices have decreased.
  • All of the counties in Wyoming and the majority of counties in states including Montana and Colorado got the minimum payment rate. Farmers in these counties will get no payments from the second or third installments of 2019 MFP.
  • The Trump Administration ignores any trade damage not related to its own chaotic trade actions and largely shuts out specialty crops and forestry from direct assistance.
  • Instead of taking steps to support small and beginning operations, USDA doubled the payment limit for row crops payments from $125,000 to $250,000. This change will concentrate payments even more in the large complicated farming conglomerates.

In the bipartisan 2018 Farm Bill, Congress provided balanced support to help farmers manage market instability across the country and provided permanent support for USDA export market development programs. The Senators raised concerns that the Administration’s policy upends this careful compromise, replaces income from markets with government payments, creates vast inequities, and does not address the actual trade damage to farmers who have been hit the hardest.

 

Seventeen Senators signed the letter to Perdue urging him to correct the inequities in the trade assistance payments: U.S. Senators Debbie Stabenow (D-Mich.), Chuck Schumer (D-N.Y.), Dick Durbin (D-Ill.), Tina Smith (D-Minn.), Patrick  Leahy (D-Vt.), Gary Peters (D-Mich.), Tammy Duckworth (D-Ill.), Robert Casey (D-Penn.), Sherrod Brown (D-Ohio), Tammy Baldwin (D-Wisc.), Patty Murray (D-Wash.), Kirsten Gillibrand (D-N.Y.), Kamala Harris (D-Calif.), Amy Klobuchar (D-Minn.), Jeff Merkley (D-Ore.), Maria Cantwell (D-Wash.), and Ron Wyden (D-Ore.).

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