Trade assistance payments disproportionately benefitted large-scale and southeastern operations
WASHINGTON — A government program intended to support farmers and ranchers affected by trade disputes disproportionately benefitted large-scale and southeastern operations, according to a minority staff report published by the U.S. Senate Committee on Agriculture, Nutrition, and Forestry.
The U.S. Department of Agriculture program, known as the Market Facilitation Program, compensated most commodity grain producers based on a single county rate per planted acre. National Farmers Union initially expressed concern that the payment disparities among counties would put some farmers at a financial disadvantage, a fact that has been confirmed by the report. Although farmers in the North, Midwest, and West have experienced the greatest harm from trade disputes, 95 percent of counties receiving the highest payment rates are based in the southeast. Even in adjacent counties, payment rates sometimes vary by two to three times.
“Farmers in every county have been affected by withering export markets,” said NFU President Roger Johnson. “Yet these county payment rates arbitrarily have helped farmers in some counties much more than others. If you’re unlucky enough to live in a county with a low payment rate, you may have received just a third of the assistance that your next-door neighbor got — for no apparent reason at all.”
NFU was similarly worried that the vast majority of trade assistance would flow to the largest operations rather than more vulnerable small- and medium-sized operations; by some estimates, more than half of the first tranche of payments went to just one-tenth of the recipients. Since then, USDA doubled the payment limit for row crops from $125,000 to $250,000 and loosened income restrictions, paving the way for millionaires to claim an even larger share of assistance.
With the number of mid-sized farms already rapidly declining, Johnson was perturbed that MFP would accelerate the alarming trend of farm-level consolidation. “During times of financial difficulty like these, bigger farms with more equity have a cushion to protect them from low prices and bad weather. But smaller operations might not be able to withstand more than a few hard years in a row,” Johnson said. “A successful food system is a diverse food system, with farms of all types and sizes. Unfortunately, USDA’s preferential treatment of larger operations will likely contribute to the ongoing homogenization of American agriculture.”
Flaws aside, these programs are just a temporary solution to the very long-term damage inflicted on the United States’ trade relationships. “Trade assistance payments are not an economically sustainable way for farmers to make ends meet,” said Johnson. “Though assistance payments have proved critical to the immediate financial stability of family farmers and ranchers, their continued success depends on stable markets and fair prices. Farmers work hard to feed, fuel, and clothe America — and they should be able to make a living doing just that. We urge President Trump to work with Congress to establish policies that ensure that farmers no longer have to depend on outside help just to stay in business.” ❖