The Trump administration last week revealed details of a $16 billion aid package for farmers hit in the U.S.-China trade war, with key provisions meant to avoid large corporations scooping up big payouts at the expense of small farmers.
According to a report released Tuesday by the nonprofit Environmental Working Group (EWG), most of the $8.4 billion given out so far in last year’s farm bailout went to wealthy farmers, exacerbating the economic disparity with smaller farmers.
An EWG analysis found that the top one-tenth of recipients received 54 percent of all payments. Eighty-two farmers have each so far received more than $500,000 in trade relief.
One farm, DeLine Farm Partnership of Charleston, Mo., has so far received $2.8 million.
The top 1 percent of recipients of trade relief received, on average, $183,331. The bottom 80 percent received, on average, less than $5,000, EWG said.
The Agriculture Department said in a statement that the program is designed to provide a level of support that’s proportionate to a farm’s size and success. Payments were based on production. The more acres they farm and bushels per acre they produce, the more assistance farmers receive.
“To our knowledge, USDA’s payments have all been made in accordance with our published regulations and existing procedures,” the statement said. “USDA follows producer eligibility protocols that are established by Congress for other farm safety net programs.”
In a year of trade tariffs, natural disasters and weather problems, and depressed commodity prices, EWG senior analyst Anne Schechinger said, that some of these farmers could be quadruple-dipping from federal aid programs.
They may be receiving money from either or both rounds of the trade relief, agricultural-risk coverage and price-loss coverage, as well as crop insurance (especially for those farmers who were unable to plant and took “prevent plant” insurance payouts) and finally money from the disaster relief bill.
“These programs are designed to give the most subsidy money to the biggest farms; we don’t dispute that,” Schechinger said. “But for these huge farms that are making tons of money each year, is that really something taxpayers should be subsidizing while smaller farmers struggle?”
In 2018, payouts to individual farmers hurt by the trade war with China were capped at $125,000; this time the cap has been raised to $250,000 per person or legal entity, with a cap of $500,000. Still, Schechinger said, farmers can get around this easily.
“If your farm partnership has 20 people, each person could take $125,000. You only have to be ‘actively engaged’ in farming, and that is a super vague qualification. It could mean that you call in once a year to a shareholder meeting.”
Some agricultural economists say that changes to the second round of trade relief payments will further favor the largest farmers by linking payments to the number of acres, not the number of bushels or bales produced.
In his weekly agricultural conference call Tuesday, Sen. Charles E. Grassley (R-Iowa) said the EWG findings were in line with his own views about farm programs.
“There should be a cap on them because 10 percent of the farmers get 70 percent of the benefits of the farm program. The farm program is meant to help people over humps beyond their own control,” he said. “Some large farmers do have the benefit of having resources to get over those humps without government help.”
According to EWG, nearly 28,000 farms have received payments from farm subsidy programs for 32 years straight. Total subsidy payments across all programs in 2018, including the trade relief package, totaled more than $18 billion.