Thousands of farmers got more than $100,000 each. And the payments are based on production the bigger the farm, the bigger the payments. According to studies by several independent economists, the USDA is paying farmers roughly twice as much as the actual harm that they suffered from the trade war. To me, that's a problem," he says.Īlso, the payments are quite generous. "The sector that is hurt the most, and which would normally complain, all of a sudden it's assuaged by these payments. The decision to start the trade war was costly, he says, and the Trump administration, by tapping the federal Treasury, is avoiding the political fallout from that decision. Glauber sees a risk of "moral hazard" - a situation in which someone is shielded from the consequences of poor decisions. Some people have raised questions about whether using the Commodity Credit Corp. "What's unique about this is, didn't go through Congress," Glauber says. already gave it the authority to spend this money. Yet the USDA created this new program out of thin air it decided that an old law authorizing a USDA program called the Commodity Credit Corp. The auto industry bailout was fiercely debated in Congress. Glauber says it deserves more attention, for a whole collection of reasons.įor one thing, it's an enormous amount of money, more than the final cost of bailing out the auto industry during the financial crisis of 2008. "I was surprised that it didn't attract more attention," says Joe Glauber, the USDA's former chief economist, who's now a senior research fellow at the International Food Policy Research Institute. The announcement aroused little controversy. He knows that they're fighting the fight and that they're on the front lines," Secretary of Agriculture Sonny Perdue told reporters while announcing the aid package. "President Trump has great affection for America's farmers and ranchers. Department of Agriculture simply sent him a check to compensate him for the low prices resulting from the trade war. Government-subsidized crop insurance covered some of the losses from flooding. Some of the aid came from long-familiar programs. The soybeans that he did manage to grow had fallen in value China wasn't buying them, in retaliation for the Trump administration's tariffs. When I visited in early July, many of his fields near New Madrid, Mo., had been flooded for months, preventing him from working in them. The money flowed to farmers like Robert Henry. Farm subsidies jumped to their highest level in 14 years, most of them paid out without any action by Congress. In 2019, the federal government delivered an extraordinary financial aid package to America's farmers. It's the highest level of farm subsidies in 14 years. Farmers got more than $22 billion in government payments in 2019. A farmer operates a combine to harvest soybeans in Wyanet, Ill.
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