Stabenow: No more freedom for USDA after GAO report confirms MFP criticisms
Senate Agriculture Committee ranking member Debbie Stabenow, D-Mich., said Monday she would oppose giving more money to the Trump administration’s Agriculture Department to make special payments to farmers without more congressional control over it.
Stabenow made the statement after the Government Accountability Office confirmed her analysis that the Trump administration’s Market Facilitation Program had disproportionately benefited Southern farmers, that payment rates for some crops were much higher than other crops, and that large farms got bigger payments than smaller farms.
At Stabenow’s request, GAO, the investigative arm of Congress, on Monday issued a report on the 2019 Market Facilitation Program, which was set up to make payments to farmers whose products were affected by the Chinese government’s tariffs that were imposed in reaction to tariffs that President Donald Trump imposed on Chinese products.
GAO found that:
• USDA made $14.4 billion in MFP payments to about 644,000 farming operations in 2019, but that the payments varied dramatically by region and crop.
• Average payments by state per individual ranged from a high of about $42,500 in Georgia to less than $2,000 in Rhode Island.
• Payments for nonspecialty crops accounted for about $13.5 billion or about 94 percent of total MFP payments for 2019 and average 2019 MFP payments ranged from a high of $119 per acre in Georgia to a low of $15 per acre in Maine, Utah, Montana, Wyoming, and Alaska.
• Farming operations that produced specialty crops accounted for about $274 million or about 2% of total MFP payments for 2019 and dairy and hogs operations accounted for about $566 million or about 4 percent of total MFP payments for 2019.
• USDA’s Farm Service Agency distributed about half of the specialty crops payments to farming operations in California and about half of the dairy and hogs payments to farming operations in Iowa, Minnesota, California, Wisconsin, and Illinois.
• FSA paid the 25 farming operations that received the highest MFP payments for 2019 about $37 million.
• The average MFP payment per farming operation for 2019 was $22,312 but varied by county, ranging from $44 to $295,299.
• FSA distributed approximately $519 million in additional MFP payments for 2019 compared with 2018 because of increased payment limits. Farming operations in Texas received approximately 22% of all additional payments. Farming operations in five states — Texas, Illinois, Iowa, Missouri, and Minnesota — received almost half of all additional payments.
The Trump administration had complete discretion in developing the formulas because the money came from the Commodity Credit Corporation, a line of credit that USDA has at the Treasury Department. Total spending under the CCC is limited to $30 billion per year unless Congress provides more money.
In a telephone press conference, Stabenow said she also has concerns about payments made under the Coronavirus Food Assistance Program.
When she raised concerns about the MFP and CFAP programs, USDA “didn’t listen,” Stabenow said. Now the Republicans have made plans to provide USDA another $20 billion in coronavirus aid, but Stabenow said she is reluctant to provide the aid without congressional proposed controls.
Stabenow said she also wants assurances that there will be enough money in the CCC for regular farm programs in the coming fiscal year.
Stabenow noted that the Trump administration says the Midwest got the most in total payments, but Stabenow said that is logical because there are more farmers in the Midwest.
But Stabenow added, “per farmer, per acre the South hit the jackpot.” She said she was particularly bothered by the fact that farmers in Georgia, the home state of Agriculture Secretary Sonny Perdue, got the highest payments.
Stabenow said that if she had been secretary she would have been concerned about the perception it created, and that when she chaired the agriculture committee she tried to be fair to all crops.
Asked if Perdue had benefited his own state, Stabenow said, “He certainly put together a program that favored the crops in his state.”
“We are here to say our farmers need help, the administration needs to stop playing favorites and operate programs that are fair to all farmers,” Stabenow said.
Sen. Sherrod Brown, D-Ohio, who is the ranking member on the Senate Agriculture Commodities, Risk Management, and Trade Subcommittee and joined Stabenow on the call, noted that the Trump administration’s “chaotic trade policy has contributed to the downturn in prices” and made the MFP program necessary.
Trump “has betrayed Midwestern farmers just as he betrayed Midwestern auto workers,” Brown said.
Senate Minority Whip Dick Durbin, D-Ill., said, “Today’s report confirms that the secretary of agriculture, a former Georgia governor, used USDA’s trade-aid program to favor, per acre, cotton growing Southern states over soybean growing states like Illinois.”
“Illinois farmers experienced far more financial damage from this president’s erratic trade approach with China, but ended up with the short end of the stick. The Trump administration must explain itself.”
Don Gregory, a Michigan cherry and apple farmer, and Gary Wertish, president of the Minnesota Farmers Union, both said Midwestern farmers had not been treated well in the MFP.
“We have to be focused on those farms that need the most help,” Stabenow said. “We have a tremendous hunger crisis in the country, we need to be paying attention to families who are in desperate need of food.”
Stabenow noted that GAO’s investigation is continuing, but said she did not know what else it would investigate.
Thomas Cook, a GAO official, said in an email to The Hagstrom Report, “GAO will evaluate the strengths and limitations of USDA’s methodologies for estimating trade-related damages and how those methodologies affected the damage estimates for the Market Facilitation Program in 2018 and 2019.”
“GAO also is looking at USDA’s distribution of MFP payments, by type of producer, commodity, and state and county, along with how those payments compared to what they would have been under the 2018 farm bill’s payment caps.
“Furthermore, GAO will assess the extent to which USDA verified producers’ compliance with income and other eligibility requirements for MFP in 2018 and 2019.”
GAO noted in the report that it had provided a draft to USDA for comment and that USDA provided technical comments, which were incorporated into the report.
Asked to react to the report, a spokesman for Agriculture Secretary Sonny Perdue provided a series of maps illustrating the payments and said: “China and other nations have not played by the rules for a long time, and President Trump is the first president to stand up to them and send a clear message that the United States will no longer tolerate unfair trade practices”
“USDA acted quickly to assist America’s farmers and ranchers — of all sizes and for all market outlets — to ensure they continue to produce enough food, fuel, and fiber to feed ourselves and the world. 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.
“MFP was crafted to assist farmers from unfair and illegal trade damages from China and other countries — it was not designed to be a general farm bill program. It was also designed to make sure farmers who are most impacted receive the most aid. For example, cotton and sorghum received higher MFP payments because they had significantly higher trade damages per unit of production compared to other MFP commodities.
“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. As a result, trade impacts on these farmers was relatively greater, which means they received higher payments.
“MFP payments are made based on trade damage, not based on region or farm size. More than 650,000 farmers across the United States have received payments under the 2019 MFP program. To date, the Midwest region has received more than 68% of the funds, the top five recipient states are Iowa, Illinois, Minnesota, Texas, and Kansas and farms with less than 100 acres received an average of $59.68 per acre while farms with more than 2,500 acres received an average $48.64 per acre.” ❖
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