President Donald Trump announced another round of “cash” bailouts for farmers, tweeting, “Our great Farmers will recieve [sic] another major round of ‘cash,’ compliments of China Tariffs, before Thanksgiving. The smaller farms and farmers will be big beneficiaries. In the meantime, and as you may have noticed, China is starting to buy big again. Japan deal DONE. Enjoy!”
But the reality is a lot less promising for Iowa farmers than the president’s tweets indicate. The bailouts come in the middle of a trade war with China, that has left the Ag industry struggling. But the offer is a lot like cutting off someone’s legs and then putting cast on their ankles. The promised cash is a much-needed boost for farmers, but here is the thing: the money is part of a federal aid package. The money Trump is tweeting about is part of the USDA’s Market Facilitation Program (MFP) and is 25 percent of the expected payout, in addition to the 50 percent they’ve already received. The MFP is administered through the USDA, which has paid out $6.69 billion to 564,181 producers in total. Iowa is one of the top five recipients of this program money, which is designed to reduce the impact of foreign retaliatory tariffs.
In sum, the program is funded by the American taxpayers, not China.
And the fund itself is nearing its tipping point because of the trade war. Because of the $12 billion in aid given out last year and the $16 billion added this year to offset the price of the trade war, the MFP is close to capping out.
Here is the other thing: The money doesn’t benefit all farmers. Until recently, the MFP payments have been linked to crop production. But this 2019 round of bailout money is linked to acreage. The Des Moines Register reported in July that the lax rules on bailout money have allowed farmers and their families to collect more than the $500,000 cap, writing, “Loopholes in USDA’s programs have enabled farmers and managers with little on-farm contact to exceed the cap. In Iowa, for example, two farms received more than $600,000 in payments in the first aid package.”
While the bailout money makes a good momentary distraction from impeachment proceedings. The reality is, throwing cash at farms will not solve the fundamental problems caused by Trump that are undercutting our farmers and our Ag economy.
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