GAO backs Durbin on Trump tariff bailouts

Government watchdog finds largest payments went to farmers across the South, not Midwest soybean growers

Soybeans grow earlier this summer in central Illinois. A new report from a government watchdog charges that Illinois soybean farmers received smaller payments on average in President Trump’s bailout for his trade war with China than farmers across the South. (One Illinois/Ted Cox)

By Ted Cox

A new government watchdog report confirms charges repeatedly made by U.S. Sen. Dick Durbin that President Trump’s tariff bailout payments went disproportionately to rich cotton farmers across the South and not Midwest soybean growers who bore the brunt of the trade war with China.

The General Accountability Office executed an audit earlier this year at the request of U.S. Sen. Debbie Stabenow of Michigan and completed it late last month, and Durbin joined in formally releasing it to the public on Monday. It found that while Illinois farmers received $1.5 billion in tariff bailouts through the Trump administration’s Market Facilitation Program just last year, about 10 percent of the total distributed, the average payment to the more than 75,000 Illinois farmers who received them was less than $15,000. That ranked Illinois dead center at 25th among the 50 states in the size of the average payment. By contrast, the average payment to a Georgia farmer was $43,000, $36,000 to a Mississippi farmer, and $32,000 to farmers in North Dakota, which also saw a concentration of large payments.

According to the GAO, the payments allotted more than half the projected 2019 market price for sorghum and 40 percent of the projected market price for cotton, but just a quarter of the projected market price for soybeans — the crop hardest hit by Trump’s trade war with China — and barely 4 percent of the projected market price for corn.

Durbin touted the report’s findings Monday, issuing a statement saying: “Today’s report confirms that the secretary of Agriculture, a former Georgia governor, used (the department’s) trade-aid program to favor, per acre, cotton growing in Southern states over soybean growing in states like Illinois. Illinois farmers experienced far more financial damage from this president’s erratic trade approach with China, but ended up with the short end of the stick. The Trump administration must explain itself.”

A news release issued by Durbin’s office charged that “the data in the GAO report confirms previous findings that the Trump administration picked winners and losers between regions, crops, and farms in its attempt to assist farmers harmed by President Trump’s turbulent trade agenda.”

Durbin charged last November that the bailouts were going disproportionately to Southern cotton farmers, and he repeated the charge in February after the final round of MFP payments went out, saying, “Illinois soybean farmers need this trade aid because of the financial losses they’ve incurred. But once again (the U.S. Department of Agriculture) has overcompensated Southern cotton growers, whose market losses are small and whose prices have gone up, with more aid on a county-by-county basis than Illinois’s soybean farmers.”

By acre, last year, in bailout payments made for “nonspecialty crops” including soybeans and corn, Illinois ranked 11th among all states, at $71 an acre, but Georgia, Mississippi, and Puerto Rice all topped $100 an acre on average.

(General Accounting Office)

A GAO map of the nation showed almost all of Illinois getting between $50 and $75 an acre, with pockets in central Illinois getting between $75 and $100. But the top payments of $100 or even more than $150 an acre went to counties across the South, west Texas, New Mexico, Arizona, and portions of California.

Illinois received just 3.6 percent of the bailout payments allotted for specialty crops, dairy, and hogs, while California got more than a quarter of the money distributed in that category, and Iowa collected more than 10 percent of the total.

The Environmental Working Group, an independent government watchdog that distributed the report Monday, cited the GAO as saying the MFP bailouts “created deep regional inequities, funneled money to large agricultural operations instead of smaller farms, and favored certain crops over others.”

That grassroots group also took issue with requirements in the MFP that “farmers have to provide either ‘active personal labor,’ with people actually working on the farm, ‘active personal management,’ with people spending time managing the farm, or a combination.” According to the group, “The GAO found that last year, of the top 25 farms that received the largest payments in 2019 — a total of $37 million in taxpayer dollars — eight qualified for government checks through ‘active personal management.’ This means that none of these recipients did any actual farm labor, yet they received $11.6 million in government payments.”

Anne Schechinger, senior economic analyst with the group, called the USDA’s definition of active personal management “incredibly vague,” pointing out, “People with minimal ties to farms can — and do — receive huge payments from the federal coffers just by dialing into a few shareholder conference calls a year, without ever having to set foot on the farm or get their hands dirty.

“The GAO’s new report shows just how the MFP program has exacerbated the existing divide between the haves — people who know how to exploit the federal subsidy system — and the have-nots — small farmers who are actually harmed by shifts in the agricultural economy, including Trump’s capricious and unnecessary trade war,” she added. “The USDA must do more to ensure that these federal dollars flow to struggling small farms, and not large, wealthy farms that milk the system for a taxpayer-paid windfall.”

According to the Environmental Working Group: “The GAO report reinforces EWG findings showing how giant loopholes in farm subsidy programs have allowed taxpayer dollars to flow to ‘city slickers’ living in major American cities.” It added that the Farm Service Agency had recently tightened the “active personal management” loophole, but the new standard was never applied to the Trump trade bailouts.