As the election nears, the federal spigot is flowing with agricultural subsidies. Most estimates of the funding President Donald Trump is promising peg this year’s amount at about $40 billion. …
As the election nears, the federal spigot is flowing with agricultural subsidies. Most estimates of the funding President Donald Trump is promising peg this year’s amount at about $40 billion. The New York Times is estimating it could go as high as $48 billion.
The assistance is surely appreciated. Agriculture is operating on razor thin margins, and farmers are aging. The industry isn’t offering the opportunity it once did, and young people, eager for lucrative careers, are looking to other industries in other states.
This is no knock on the farmers who avail themselves of federal funding. They need it. But as with anything coming down from Washington, the money is a stew of big government politics as usual.
Trump’s critics have zeroed in on this sudden surge in farm support — much of which comes from outside the traditional channels, such as the five-year Farm Bill — as a means to shore up support from his base. While many of these critics are motivated more by a support for Democrat presidential candidate Joe Biden than any serious scrutiny of federal waste — and would praise the funding if it came from Biden — they do have a point.
Farmers are a key voting bloc for the president. At an election rally in Wisconsin in September, Trump announced an additional $13 billion in coronavirus relief for U.S. farmers and ranchers, which more than doubled federal assistance to the industry.
The Times reports that, as a result of subsidies included in the current Farm Bill and those coming through Trump’s executive order, two out of every five dollars American farmers receive this year will come directly from taxpayers.
In 2018, critics of Trump’s trade tariffs warned that targeted countries would respond with retaliatory tariffs of their own. The subsequent trade war would hit farmers hard, and sure enough, that’s what happened.
As with many problems the federal government creates, the federal government came up with a solution that involves spending more taxpayer money. (Little side note: the national debt now sits at over $27 trillion.) The government created the Market Facility Program (MFP) to compensate farmers for the low prices resulting from the trade war.
However, much of this funding isn’t going to the farmers who need it the most. According to an analysis by the Environmental Working Group, the top 1% of farms in terms of revenue, received 16% of MFP payments, with the average total payment for any farm in that category being $524,689. The bottom 80% of farms got just 23% of the payments, for an average of $9,190 per farm. The analysis also found that thousands of the recipients of the money lived in cities or on golf courses.
A report by the Government Accounting Office found that eight of the 25 farms that received the largest payments through the MFP qualified under what’s called “active personal management.” To fit that category, all a recipient needs to do is dial into a few shareholder conferences every year.
In August, the USDA released new rules that would redefine “active personal management” as 500 hours per year, which is considerably less than your average farmer puts in. And these new rules apply only to traditional farm subsidy programs and not the MFP or the Coronavirus Food Assistance Program, which has provided billions to farmers impacted by the pandemic.
It should be noted that, according to EWG’s farm subsidy database, since 1995, federal subsidies going to Wyoming producers are overwhelmingly paid out to family farms. In Park County, the only recipient that isn’t a family farm is the Farm Service Agency, which provides payments to family farms.
While farmers are benefiting from the funding and might not survive without it, a deeper look at where the money is going shows that for every dollar the fed spends well, several more is wasted. We’d be better off if a lot less of our paychecks went to Washington.