U.S. Senate Democrats are alleging that President Donald Trump’s administration is unfairly doling out its trade assistance to the detriment of Midwestern farmers, a claim the U.S. Department of Agriculture is denying.
Fifteen Democrats, including eight Democratic members of the Senate agriculture committee, criticized the USDA’s trade assistance program on Tuesday with a new report, “President Trump’s ‘Aid Not Trade’ Policy.” The report argues that Trump’s administration is favoring southern farmers and wealthy farms over farmers in the Midwest and Northern Plains who have been harder hit by the trade war and tariffs.
Farmers need help amid the Trump administration’s “erratic trade actions,” but the problem is that the “flawed” trade aid formula “picks winners and losers, while failing to adequately help the farms hit the hardest,” said U.S. Sen. Deb Stabenow, the Michigan Democrat and minority ranking member of the Senate agriculture committee who led the report.
Senate Minority Leader Chuck Schumer of New York added, “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.”
South Dakota members of Congress’ agriculture committees touted the need to pass the U.S.-Mexico-Canada trade agreement to give farmers market certainty in light of the report on Tuesday.
U.S. Sen. John Thune, who sits on the Senate’s agriculture committee, is reviewing the report, but he has said all along that the trade aid is “a short-term Band-Aid,” according to his spokeswoman Katie Lingle.
Democrats and Republicans have proven that they can work together to pass a Farm Bill and make progress on the USMCA trade agreement, U.S. Rep. Dusty Johnson said, adding, “I wish this report had more of that bipartisan spirit and less political grandstanding.”
The USDA puts the average-sized U.S. farm at 443 acres and the report points out that the differences in trade payment rates mean a farmer who planted all 443 acres could receive $6,645 or $66,450 in trade aid depending on which county they’re located. However, “putting every producer in a 443-acre box isn’t an honest analysis of the data,” said Johnson, a member of the House agriculture committee.
As of Oct. 1, South Dakota producers have received more than $219 million in trade assistance, for which producers can apply through Dec. 6, according to USDA data.
Likewise, the USDA took issue with the report’s analysis of its formula in its denial of the allegations on Tuesday. The federal agency appreciates the feedback in the report, but the USDA has provided the funding necessary to help farmers impacted by the tariffs, according to a USDA statement.
Farmers receive the trade assistance, administered through the USDA’s Market Facilitation Program, based on payment rates per county. The report argues that the payment rates haven’t been distributed equally between regions and counties and the top five states who received the largest county rates were Georgia, Mississippi, Alabama, Tennessee and Arkansas. South Dakota received more than $20 per acre while Georgia received more than $50 per acre in the first round of the payments, according to the report.
In the first round of the payments, 193 counties have payment rates of $100 or more and 95 percent of those counties are located in the south, according to the report. A total of 402 counties have the minimum payment rate of $15 and 77 percent of those counties are located in Midwest and other regions.
Southern crops such as cotton didn’t have a price decline while farmers in the Midwest and Northern Plains have been hit by lower national soybean prices and higher transportation costs to reach alternative markets, according to a letter 15 Senate Democrats sent to Agriculture Secretary Sonny Perdue along with the report.
The Democrats’ report also argues that the program is benefiting wealthy farms and foreign-owned companies instead of small farms and beginner farms, which are more vulnerable. The USDA “has done nothing to target assistance” to small and beginner farmers, according to the report.
“With the average age of farmers in the U.S. close to 60, we cannot afford to let the chaos created by the lack of a trade strategy drive the next generation of farmers out of business,” the report states.
But the USDA says its payments are made based on trade damage, not based on region or farm size and more than 560,000 farmers across the United States have received trade assistance program. The USDA considered the total amount of money received by producers in each state rather than the per-county rate.
“To date, the Midwest region has received more than 60 percent of the funds and the top five recipient states from the 2019 MFP program are Illinois, Iowa, Kansas, Nebraska and Minnesota, which directly refutes the claims made in this report,” according to the USDA’s statement.
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