Trump tariff bailout goes to biggest farms
Top 1 percent got average of $183,000, while bottom 80 percent averaged $5,000
By Ted Cox
A new study using government data charges that federal farm subsidies meant to make up for losses suffered in President Trump’s trade wars over the last two years went overwhelmingly to the largest U.S. farms — and that concentration held firm in Illinois.
The Washington, D.C.-based nonprofit Environmental Working Group released the study Tuesday, drawing on data it said it received from the U.S. Department of Agriculture in requests under the Freedom of Information Act.
According to the study, more than half of the $8.4 billion distributed to U.S. farms last year and through this April in the so-called Farm Market Facilitation Program went to just 10 percent of recipients, “the country’s biggest and most successful farmers,” according to a story reported by Reuters on Wednesday. The top 1 percent received an average of more than $180,000, while the bottom 20 percent of recipients averaged less than $5,000.
The Trump administration distributed $12 billion in the first round of payments under the Market Facilitation Program, with up to $16 billion committed in the second round this year — as Trump’s trade war with China persisted — the bulk of that, $14.5 billion, in direct payments to farmers.
“Farm bailout payments designed to offset the impacts of President Trump’s trade war have overwhelmingly flowed to the largest and most successful farmers,” EWG reported.
According to the group, the first round of payments was based on production, this year’s second round on acreage — both benefitting big farms and corporate agriculture.
“The bigger the farm, the bigger the government check,” EWG stated.
The group charged that big farms found ways to work around the supposed maximum payment in last year’s first round, stating, “Although USDA initially said it would place a $125,000 cap on MFP payments, the department chose to apply rules that allow relatives who do not contribute meaningful work on the farm to receive farm payments, allowing many farm businesses to evade the cap.” It charged that “thousands of residents of the nation’s largest cities received MFP payments.”
This year’s second round “also increased the maximum amount of aid per individual or legal entity to $500,000 from $125,000 in the package last year,” according to Reuters.
The study found that Illinois farmers have received $1.1 billion from the Market Facilitation Program over the last year-plus. According to the USDA data, $1 billion went to soybean farmers, $21 million to corn growers, and $17 million to hog farmers. It found that Gingerich Farms in Lovington was the top recipient last year, with $750,000, and Sam Beetz & Sons in Mendota was the top recipient so far this year with $582,000.
They were two of 82 farms nationwide that received more than $500,000 in the tariff bailout.
The national trend on concentration of payments held steady in Illinois, where the top 1 percent got 11 percent of all payments at an average of $159,000, the top 20 percent got 74 percent of the payments at an average of $54,000, and the remaining 80 percent got an average of $4,716.
The study found that “MFP payments continue to leave out minority farmers,” and the New Food Economy used that as a jumping-off point to find that the bailout “has almost exclusively benefitted white men and their families, who appear to be disproportionately upper-middle-class or wealthy. These payments further entrench already drastic inequalities in agriculture, along racial, ethnic, gender, and class lines.”
Trump boasted last year in an appearance at the U.S. Steel Granite City Works that his tariffs had revived the U.S. industry. But even then he recognized that China had responded with retaliatory tariffs aimed at agriculture goods and the farmers who produce them, who tended to support Trump nationally in 2016. “China tried to hurt the American farmer because that way they would hurt me," Trump said. He tried to bolster farm support by urging unity of purpose, saying, "We're going to stick together and win together.”
Trump tweeted, “Trade wars are good, and easy to win.” Yet the trade war has persisted, and the latest negotiations broke off Wednesday with The New York Times reporting that “American and Chinese negotiators finished talks … with little progress toward ending a trade war that has shaken the world’s economic confidence and rattled markets.”
Some Illinois farm groups have resisted the subsidies. Last year, Illinois Soybean Growers pushed for “trade, not aid.” According to the study, soybean farms were nevertheless the main bailout recipients in Illinois. The Illinois Farm Bureau has been more receptive, but earlier this year IFB President Richard Guebert Jr. said, “Farmers are on the front lines of this trade war and are sacrificing their livelihoods and it hasn’t gotten better. We are sitting on a huge inventory of grain while our export markets are diminishing.” He added, however, “If this trade uncertainty lingers, we will certainly be looking to the Trump administration for another round of market-facilitation payments.”
Newsweek reported last week that Illinois farmers were increasingly critical of Trump and the trade war. “We are very appreciative of the administration and USDA Secretary Sonny Perdue's efforts to financially assist farmers who have been harmed by retaliatory tariffs for more than a year,” Guebert said in a statement, but he added, “We would much rather have our trade agreements back in place.”
Wednesday’s report warned that the tariff bailout payments pushed total U.S. farm subsidies above $18 billion last year, adding, “This means that, in combination, these payments could exceed World Trade Organization caps on farm subsidies, potentially opening a new front in Trump’s trade war.”