betcha' there's lots of fraud goin on.
MO GUBMINT!
‘Here’s your check’: Trump’s massive payouts to farmers will be hard to pull back
The president was already spending double his predecessor to spare farmers the cost of his trade war. Now the price is reaching unsustainable levels.
A farmer harvests corn near Burlington, Iowa. | Scott Olson/Getty Images
By RYAN MCCRIMMON
07/14/2020 04:30 AM EDT
http://api.addthis.com/oexchange/0....=https://politi.co/2OtrWvH&pubid=politico.com
Government payments to farmers have surged to historic levels under President Donald Trump as the Agriculture Department floods the industry with cash to stem the financial losses from Trump’s tariff fights and the coronavirus pandemic.
But as agriculture grows more reliant on unprecedented taxpayer support, farm policy experts and watchdog groups warn the subsidies are growing too big and too fast, with no strings attached and little oversight from Congress — and that Washington could have a difficult time shutting off the spigot.
The massive payments have been a political boon to Trump in farm country — he tweeted in January that he hoped the money would be “the thing they will most remember” — but risk creating a culture of dependency, as farmers and ranchers work the bonus subsidies into their financial plans when making large, up-front investments in seed, feed and farm machinery.
“It’s a big problem for agriculture because it’s not sustainable,” said Anne Schechinger, senior economics analyst at the Environmental Working Group, a nonprofit watchdog organization. “It’s really difficult once you’re giving farmers this much money to then take away those [payments].”
It’s a problem for taxpayers, too: The size, speed and lack of scrutiny of the payments should concern the public, says Neil Hamilton, emeritus professor and former director of Drake University’s Agricultural Law Center.
“It’s just, ‘Here’s your check.’ There’s an incredible amount of trust that [farmers] will use it wisely,” he said. “But at the end of the day, it’s your and my tax money. It’s not a crazy idea to ask what the public’s getting from this, or could the public expect more for it.”
For example, the University of Missouri’s Food and Agricultural Policy Research Institute in June released its baseline estimates, showing government farm payments falling from at least $32.8 billion this year to $16.6 billion in 2021. Barring a strong economic recovery, the drop-off would leave a gaping hole in many farmers’ bottom lines: According to FAPRI’s analysis, net farm income would sink from $90.6 billion in 2020 to $79.4 billion next year, a far cry from the 2013 peak of $139 billion.
For some farmers, the lost income could be the difference between staying in business or closing up shop. With less money coming in amid Trump’s trade war, a growing number of farmers started falling behind on their loans; the rate of delinquencies hit an eight-year high in the first quarter of 2020, according to S&P Global Market Intelligence.
That’s also a problem for the broader rural economy, from community banks and farm equipment makers to non-agricultural businesses that still rely on the sector to keep money flowing to the area.
The heartland’s reliance on steady farm income means the recurring debates in Washington over extending farm rescue payments for yet another year are likely to continue.
“It’s one more source of uncertainty, and this is a time of a lot of uncertainty,” Westhoff said. “How much more complicated can we make this for producers?”
Pressure for more farm payments
Early this year, before the coronavirus started spreading in the U.S., industry groups and farm-state lawmakers were already calling for USDA to extend the trade bailout program for a third year — even though Trump had just signed a phase one pact with China that he touted as a historic win for U.S. agriculture, effectively voiding the main reason for another bailout.
Among those seeking another round of tariff relief payments in 2020 was the American Farm Bureau Federation. The powerful farm lobby group, which welcomes Trump as a regular guest at its annual gatherings, came out in support of more payments after some internal debate about whether the aid was still needed this year.
“We feel like we’ve crossed the deep part of this [trade war], but let’s trust but verify,” Dale Moore, the Farm Bureau’s executive vice president, said of the group’s thinking at the time.
Perdue repeatedly urged farmers not to plan on any more trade aid, arguing that the direct payments weren’t meant to become a permanent price-support program. But he was overruled by a Trump tweet promising farmers more bailout money if the agreement with China and the NAFTA 2.0 deal with Canada and Mexico didn’t soon pan out.
“You have an election in November that could put a very different dynamic in the White House on this,” said Glauber, the former USDA chief economist.
Trump tweeted last November, even though U.S. businesses and consumers are paying for the duties rather than China.
That has bought the president significant support in rural America.
“The crossbar that President Trump’s team set, in terms of the number of times I’ve heard the president say ‘farmer, rancher,’ is fairly unusual,” Moore said. “Whether or not a different president would pay as much attention to agriculture as President Trump has, I can’t answer that question.”
Democrats have also stepped up their outreach to rural voters since being almost wiped out across the Midwest in 2016. It’s unclear if their renewed focus on farm policy would carry over into the White House if Biden wins in November.
So far, Biden's campaign has laid out an agriculture and rural policy platform that includes boosting farm exports and avoiding the tariff fights that have battered the industry under Trump. Biden has also hit the president specifically for the bailout payments in campaign ads. One spot features an Iowa farmer who says of Trump’s trade policy: “We’re going to screw you over and pay you off with somebody else’s money.”
The Trump administration has also faced accusations of using the trade bailout to shore up the president’s political standing with a key constituency.
“There’s definitely a connection between his supporters and the people who are getting the money from these huge payments,” said Schechinger of the Environmental Working Group. “I’m not going to say that he created [the trade bailout] to give money to his voters, because we can’t really prove that. But we do know that his base was largely in rural areas, and that is where this money has gone.”
There’s definitely a connection between his supporters and the people who are getting the money from these huge payments
Hamilton, the former Drake Agricultural Law Center director, said it’s “hard to see it as anything but political vote-buying” in battleground states like Iowa and Wisconsin that have received the bulk of the payments.
“Iowa’s kind of ground-zero in terms of the impact on soybean sales to China, or half of our ethanol plants being offline,” he said. “Look at where the payments are going. … Iowa’s probably a fairly important state in terms of the president’s hopes and plans for how he gets reelected.”
On the other hand, he said, there appears to be widespread support for the farm payments in Congress, including among farm-state Democrats. “They’re not going to say, ‘Stop the payments,’ right?” Hamilton said. “Everybody’s happy to receive them.”
The swelling of farm bailout program stands out as the defining feature of Trump’s farm policy. The record payments have overshadowed the president’s efforts to rewrite agricultural trade deals, rebalance biofuel policies between farmers and oil interests and overhaul clean water protections, meatpacking regulations and more.
“The top [issue] has to be the fact that you had record farm spending over these years,” Glauber said. “Most of it — the non-Covid stuff, the trade war in particular — was self-inflicted.”
Glauber, who spent more than three decades at USDA until 2014, said he doesn’t fault farmers who sorely need the financial help — or Perdue and the agency officials who were directed by the White House and Congress to quickly come up with complex farm rescue plans. But he said the aid should be considered “in a more rational way,” including more direction from lawmakers about how to divvy up the money among the many sectors of agriculture.
“They’re essentially giving [USDA] a blank piece of paper and saying, ‘Here’s a bunch of money. You decide how to spend it,’” he said. “The bigger question is, if you’re spending all this money, how do you wean yourself off it?”
MO GUBMINT!
‘Here’s your check’: Trump’s massive payouts to farmers will be hard to pull back
The president was already spending double his predecessor to spare farmers the cost of his trade war. Now the price is reaching unsustainable levels.
A farmer harvests corn near Burlington, Iowa. | Scott Olson/Getty Images
By RYAN MCCRIMMON
07/14/2020 04:30 AM EDT
http://api.addthis.com/oexchange/0....=https://politi.co/2OtrWvH&pubid=politico.com
Government payments to farmers have surged to historic levels under President Donald Trump as the Agriculture Department floods the industry with cash to stem the financial losses from Trump’s tariff fights and the coronavirus pandemic.
But as agriculture grows more reliant on unprecedented taxpayer support, farm policy experts and watchdog groups warn the subsidies are growing too big and too fast, with no strings attached and little oversight from Congress — and that Washington could have a difficult time shutting off the spigot.
The massive payments have been a political boon to Trump in farm country — he tweeted in January that he hoped the money would be “the thing they will most remember” — but risk creating a culture of dependency, as farmers and ranchers work the bonus subsidies into their financial plans when making large, up-front investments in seed, feed and farm machinery.
“It’s a big problem for agriculture because it’s not sustainable,” said Anne Schechinger, senior economics analyst at the Environmental Working Group, a nonprofit watchdog organization. “It’s really difficult once you’re giving farmers this much money to then take away those [payments].”
It’s a problem for taxpayers, too: The size, speed and lack of scrutiny of the payments should concern the public, says Neil Hamilton, emeritus professor and former director of Drake University’s Agricultural Law Center.
“It’s just, ‘Here’s your check.’ There’s an incredible amount of trust that [farmers] will use it wisely,” he said. “But at the end of the day, it’s your and my tax money. It’s not a crazy idea to ask what the public’s getting from this, or could the public expect more for it.”
For example, the University of Missouri’s Food and Agricultural Policy Research Institute in June released its baseline estimates, showing government farm payments falling from at least $32.8 billion this year to $16.6 billion in 2021. Barring a strong economic recovery, the drop-off would leave a gaping hole in many farmers’ bottom lines: According to FAPRI’s analysis, net farm income would sink from $90.6 billion in 2020 to $79.4 billion next year, a far cry from the 2013 peak of $139 billion.
For some farmers, the lost income could be the difference between staying in business or closing up shop. With less money coming in amid Trump’s trade war, a growing number of farmers started falling behind on their loans; the rate of delinquencies hit an eight-year high in the first quarter of 2020, according to S&P Global Market Intelligence.
That’s also a problem for the broader rural economy, from community banks and farm equipment makers to non-agricultural businesses that still rely on the sector to keep money flowing to the area.
The heartland’s reliance on steady farm income means the recurring debates in Washington over extending farm rescue payments for yet another year are likely to continue.
“It’s one more source of uncertainty, and this is a time of a lot of uncertainty,” Westhoff said. “How much more complicated can we make this for producers?”
Pressure for more farm payments
Early this year, before the coronavirus started spreading in the U.S., industry groups and farm-state lawmakers were already calling for USDA to extend the trade bailout program for a third year — even though Trump had just signed a phase one pact with China that he touted as a historic win for U.S. agriculture, effectively voiding the main reason for another bailout.
Among those seeking another round of tariff relief payments in 2020 was the American Farm Bureau Federation. The powerful farm lobby group, which welcomes Trump as a regular guest at its annual gatherings, came out in support of more payments after some internal debate about whether the aid was still needed this year.
“We feel like we’ve crossed the deep part of this [trade war], but let’s trust but verify,” Dale Moore, the Farm Bureau’s executive vice president, said of the group’s thinking at the time.
Perdue repeatedly urged farmers not to plan on any more trade aid, arguing that the direct payments weren’t meant to become a permanent price-support program. But he was overruled by a Trump tweet promising farmers more bailout money if the agreement with China and the NAFTA 2.0 deal with Canada and Mexico didn’t soon pan out.
“You have an election in November that could put a very different dynamic in the White House on this,” said Glauber, the former USDA chief economist.
Trump tweeted last November, even though U.S. businesses and consumers are paying for the duties rather than China.
That has bought the president significant support in rural America.
“The crossbar that President Trump’s team set, in terms of the number of times I’ve heard the president say ‘farmer, rancher,’ is fairly unusual,” Moore said. “Whether or not a different president would pay as much attention to agriculture as President Trump has, I can’t answer that question.”
Democrats have also stepped up their outreach to rural voters since being almost wiped out across the Midwest in 2016. It’s unclear if their renewed focus on farm policy would carry over into the White House if Biden wins in November.
So far, Biden's campaign has laid out an agriculture and rural policy platform that includes boosting farm exports and avoiding the tariff fights that have battered the industry under Trump. Biden has also hit the president specifically for the bailout payments in campaign ads. One spot features an Iowa farmer who says of Trump’s trade policy: “We’re going to screw you over and pay you off with somebody else’s money.”
The Trump administration has also faced accusations of using the trade bailout to shore up the president’s political standing with a key constituency.
“There’s definitely a connection between his supporters and the people who are getting the money from these huge payments,” said Schechinger of the Environmental Working Group. “I’m not going to say that he created [the trade bailout] to give money to his voters, because we can’t really prove that. But we do know that his base was largely in rural areas, and that is where this money has gone.”
There’s definitely a connection between his supporters and the people who are getting the money from these huge payments
Hamilton, the former Drake Agricultural Law Center director, said it’s “hard to see it as anything but political vote-buying” in battleground states like Iowa and Wisconsin that have received the bulk of the payments.
“Iowa’s kind of ground-zero in terms of the impact on soybean sales to China, or half of our ethanol plants being offline,” he said. “Look at where the payments are going. … Iowa’s probably a fairly important state in terms of the president’s hopes and plans for how he gets reelected.”
On the other hand, he said, there appears to be widespread support for the farm payments in Congress, including among farm-state Democrats. “They’re not going to say, ‘Stop the payments,’ right?” Hamilton said. “Everybody’s happy to receive them.”
The swelling of farm bailout program stands out as the defining feature of Trump’s farm policy. The record payments have overshadowed the president’s efforts to rewrite agricultural trade deals, rebalance biofuel policies between farmers and oil interests and overhaul clean water protections, meatpacking regulations and more.
“The top [issue] has to be the fact that you had record farm spending over these years,” Glauber said. “Most of it — the non-Covid stuff, the trade war in particular — was self-inflicted.”
Glauber, who spent more than three decades at USDA until 2014, said he doesn’t fault farmers who sorely need the financial help — or Perdue and the agency officials who were directed by the White House and Congress to quickly come up with complex farm rescue plans. But he said the aid should be considered “in a more rational way,” including more direction from lawmakers about how to divvy up the money among the many sectors of agriculture.
“They’re essentially giving [USDA] a blank piece of paper and saying, ‘Here’s a bunch of money. You decide how to spend it,’” he said. “The bigger question is, if you’re spending all this money, how do you wean yourself off it?”
