Farm bailout payments intended to offset the impact of President Donald Trump’s trade war have instead flowed to more than 1,000 persons who live in the nation’s largest cities, according to a report by the Environmental Working Group on Nov. 19.
The bailout recipients, the latest batch of what EWG calls “city slickers” for taking federal subsidies without living or working on a farm, are eligible for the payments because they satisfy the U.S. Department of Agriculture’s loose definition of being “actively engaged” in farming.
EWG based its report on 87,704 payments by the USDA totaling $356 million through Oct. 31. The green group said that 1,142 of the recipients, slightly more than 1 in 100, live in the 50 largest United States cities.
The payments detailed in the data released to EWG through a Freedom of Information Act request represent only a tiny fraction of the almost $5 billion in payments expected to come. The EWG list includes nine residents of San Francisco, four residents of Los Angeles, five residents of New York City and four residents of Washington, D.C.
Some $1.13 billion has been paid to producers so far, said the USDA, which has received 242,239 applications, though it has not yet processed them all. The USDA initially declined to identify the recipients, so the EWG filed a public records request.
In addition, EWG said it found 85 cases in which payments exceeded the USDA limit of $125,000 per person for crops or livestock for a combined limit of $250,000. The largest payment, $439,120, went to Red Gum Planting Co., a soybean farm in Ferriday, Louisiana.
“What’s more, Red Gum Planting Co. and other bailout recipients remain eligible to receive commodity subsidies, crop insurance subsidies and other forms of federal assistance in the rest of this year and beyond,” said EWG, which maintains a farm subsidy database that has tracked $369 billion in commodity, crop insurance, disaster and conservation payments since 1995. The group advocates larger spending on land stewardship programs.
Under the Market Facilitation Program, which went into operation after Labor Day, producers of cotton, corn, milk, hogs, soybeans, sorghum and wheat are eligible for up to $4.7 billion in compensatory payments. The MFP was created to offset the impacts of retaliatory tariffs imposed by China.
Agriculture Secretary Sonny Perdue says a second tranche will be available before the end of the year. The USDA is expected to announce details, including payment rates, in early December.
A USDA spokesman told the Farm and Environmental Reporting Network the payments were made appropriately because applicants met the actively engaged in farming test. People are eligible for subsidies if they supply land, equipment or capital to a farming operation and if they provide labor or management.
Sen. Chuck Grassley, R-IA, who says some large farmers designate relatives as managers to evade payment limits, won inclusion of language in the 2018 Senate farm bill to restrict subsidies to farmers, their spouses and one manager per farm. By contrast, the House farm bill would also make nieces, nephews and cousins eligible for subsidies, and it would remove payment limits on some types of corporate farms.
When asked about Louisiana’s Red Gum Planting Co. and other recipients of large payments, the USDA spokesman said that when farms are operated as a joint venture or a limited partnership, each member of the operation qualifies for up to $125,000 in aid.
“Every payment…has to be attributed to an actively engaged individual,” Grassley said in response. “The purpose of this amendment in the farm bill is to make sure these payments go to family farmers and not to Wall Street bankers.”
The USDA bases the Trump tariff payments on a farmer’s production records. Soybean growers are expected to receive $3 of every $4 in aid, reflecting the loss of exports to China, which used to buy one-third of the U.S. crop. Corn and dairy groups have complained about the size of their payments—1 cent a bushel for corn and 1 cent a gallon for milk.
The MFP is not directly funded by Congress but is instead funded through the Commodity Credit Corp., which can borrow up to $30 billion from the Treasury.
Larry Dreiling can be reached at 785-628-1117 or email@example.com.