Trump trade aid payments benefited large, Southern farms: watchdog report

Commodities & Futures
© Reuters. FILE PHOTO: Democratic U.S. Senator Debbie Stabenow addresses the Detroit Economic Club in Detroit © Reuters. FILE PHOTO: Democratic U.S. Senator Debbie Stabenow addresses the Detroit Economic Club in Detroit

By Christopher Walljasper

CHICAGO (Reuters) – Farmers from the U.S. Southeast, primarily those growing crops like cotton or sorghum, received larger trade aid payments from the federal government in 2019 than those in other parts of the country, a government watchdog agency said on Monday.

President Donald Trump’s administration rolled out various subsidy schemes to compensate farmers for lost sales during a tariff war with China, and the programs were frequently criticized for favoring some farmers over others.

While many farmers back Trump, dissatisfaction from farmers in swing states like Wisconsin or Michigan could play a role in November’s presidential election.

The non-partisan Government Accountability Office found farmers in Georgia received the most money per acre, with an average of $ 119.00 per acre, versus an average of $ 54 per acre across the country.

U.S. Senator Debbie Stabenow of Michigan, who requested the nonpartisan GAO’s report, noted that Georgia is also the home of Secretary of Agriculture Sonny Perdue.

“He certainly put together a program that favored the crops in his state,” said Stabenow, a Democrat. “Per farm, per acre, the South hit the jackpot, with Georgia leading the nation.”

The USDA, in response to a Reuters request for comment on the GAO report, said Stabenow and Senate Democrats “continue to twist the data to support a false narrative,” according to an agency spokesperson.

The department did not explain why the GAO’s 2019 data presented a false narrative, but pointed to an average of trade aid to farm states from both 2018 and 2019.

Cotton farmers received payments equaling 40% of their projected value, while most other crops received 25% or less in 2019, according to the GAO report.

USDA said cotton and sorghum received higher payments because of higher trade damages “per unit of production” compared with commodities such as soybeans, hogs and corn.

Large farms also benefited from the program, with the top 25 farms receiving an average of nearly $ 1.5 million per farm. More than 70% of these large farming operations are at least partially in the South, according to the GAO report.

While no additional rounds of trade aid payments are planned after the United States and China signed a Phase 1 trade agreement in January, some industry experts expressed concern about potential inequities in coronavirus aid for farmers.

“This program (the trade aid) sets a bad precedent for future farm policy,” said Gary Wertish, president of the Michigan Farmers Union.

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