To combat losses from the coronavirus pandemic and President Donald Trump’s tariff wars, farmers have received historic payouts from the government, Politico reports.
The Agriculture Department has infused cash into the industry to help keep it afloat at record amounts with little strings attached or congressional oversight, according to farm policy experts.
Experts told Politico that subsidies provided to farmers are growing quickly and without much oversight, which could result in officials having a hard time pulling back on the payments in the future.
Since Trump took office, direct aid to farms has grown from $11.5 billion in 2017 to more than $32 billion this year. This year’s funding is an all-time high with the possibility of more aid still to come.
The amount spent in aid to farms totals about two-thirds of the cost of the entire Department of Housing and Urban Development and more than the Agriculture Department’s $24 billion discretionary budget, according to a Politico analysis.
“It’s a big problem for agriculture because it’s not sustainable,” Anne Schechinger, a senior economics analyst at the Environmental Working Group, a nonprofit watchdog organization, told Politico. “It’s really difficult once you’re giving farmers this much money to then take away those [payments].”
Neil Hamilton, emeritus professor and former director of Drake University’s Agricultural Law Center, said the payments should concern taxpayers.
“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.”
The spending frenzy began in mid-2018 when the USDA gave money to farmers and ranchers to help ease the financial crunch they felt from Trump’s trade war. The industry faced increased tariffs that tanked agricultural exports and commodity prices. Farm sales to China dropped from $19.5 billion in 2017 to just $9 billion the next year. Farm bankruptcies jumped nearly 20% last year.
The bailout has cost more than $23 billion and it was never appropriated by Congress. Rather, the money was distributed through the USDA’s Commodity Credit Corporation, a Depression-era agency that can borrow from the U.S. Treasury to help stabilize the farm economy.
“The administration picked these trade fights promising agriculture that this would lead to some better world at some point,” Hamilton said. “Rather than suffering any consequence for the ill-conceived strategy, they just said, ‘Hey, let’s tap the bank. We’ll buy our way out of this.’”
Now facing the coronavirus pandemic, the USDA is handing out $16 billion in farm rescue payments on top of the standard subsidies. And the push to bump up funding isn’t over. Lawmakers are considering adding as much as $50 billion to Agriculture Secretary Sonny Perdue’s coffers in the next stimulus package to help producers impacted by supply chain disruptions.
“It’s hard rolling back these things,” said Joseph Glauber, senior fellow at the International Food Policy Research Institute and former USDA chief economist. “The headlines are going to scream when [USDA] puts out a February 2021 farm income forecast that doesn’t show any ad hoc payments. Those will be ripped out of the balance sheet.”
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