Trade

The Largest Farms Exploit Loopholes in Trump’s Bailout

JM Ashby
Written by JM Ashby

Trump's bailout for American farmers harmed by his trade war and China's retaliatory tariffs are ostensibly intended to aid smaller family farms that have been pushed to the brink of bankruptcy, right?

That's the image we're suppose to conjure in our heads, but evidence has mounted that most family farms have received small and sometimes insulting amounts of aid and the Associated Press now reports that some of the largest farms in the country have exploited loopholes to collect more money from Trump's bailout than intended.

Trump's bailout included a limit on the amount of money that any single farm would be eligible for -- the idea being that a cap would increase the total number of farmers who could receive funds -- but the largest farms have applied for and received multiple payments at the same address.

Some owners have received multiple payments by making claims at multiple subsidiaries and business entities which actually represent one single farm.

From the Associated Press:

The government paid out nearly $2.8 million to a Missouri soybean-growing operation registered as three entities at the same address. More than $900,000 went to five other farm businesses, in Indiana, Illinois, Tennessee and two in Texas. Three other farming operations collected more than $800,000. Sixteen more collected over $700,000. And the data list more than 3,000 recipients who collected more than the $125,000 cap.

Recipients who spoke to AP defended the payouts, saying they didn’t cover their losses from the trade war, and they were legally entitled to them. U.S. Department of Agriculture rules let farms file claims for multiple family members or other partners who meet the department’s definition of being “actively engaged in farming.” [...]

The numerous ways around the $125,000 caps mean that millions of subsidy dollars flow to “city slickers who are stretching the limits of the law,” said Scott Faber, senior vice president of government affairs at the Environmental Working Group, which has long tracked federal farm subsidy programs, and criticizes them as biased toward big producers and promote environmentally damaging farming practices. Urban dwellers might play only a small role in an operation without ever setting foot on the farm because of the loose definitions for who qualifies, he said.

This raises some eyebrows, but so does this: the Department of Agricultural has still only spent $8.6 billion of Trump's initial $12 billion bailout according to the Associated Press which confirmed the number with the USDA.

Applications for Trump's first bailout were opened in September of 2018 and it's now July of 2019.

Agricultural Secretary Sonny Perdue has promised farmers that a second bailout is coming and Trump has even called for a third bailout, but they still haven't finished the first one.

National farm income dropped by nearly as much ($11.8 billion) as the full value of Trump's first bailout (which hasn't even fully paid out) during the first quarter of 2019 and has likely already dropped more than the total value of his second nascent bailout.

A bailout is no replacement for access to China's market of 1.4 billion potential consumers.

  • Draxiar

    So government “handouts” are okay when YOU’RE the ones suffering but for anyone else, well, they’re just moochers living off the system, right?

    Don’t get me wrong here, I sympathize with the farmers suffering from trumps stupidity (yes, despite the fact that they likely voted for the fuckwit…a “city slicker” mind you…although the karma flying around this is juicy) but for people to come out and say that subsidizing farmers for the loss of business is okay but everyone on welfare is just lazy (this is a general attitude that is often spoken) seems very double-standardish to me.

  • Aynwrong

    “city slickers who are stretching the limits of the law,”

    Somebody needs to tell slick here that it wasn’t “city slickers” that put Trump in the White House and stood with him as he jacked the farmers that slick represents out of their most lucrative market.

    “Recipients who spoke to AP defended the payouts, saying they didn’t cover their losses from the trade war, and they were legally entitled to them.”

    The Doctrine of Personal Responsibility™ strikes again.

    If a farmer that voted for Trump knowing that he was promising a trade war that will directly harm their business and causes them to need what conservatives under any other circumstances would call a “government handout” in order to keep from going under, than I have to assume that it is something else entirely about Trump’s governance that they find so appealing. So appealing in fact, that these people are willing to risk their and their family’s financial futures in order to have it.

  • muselet

    This always happens with farm subsidies: agribusiness concerns big enough to have a legal department find and exploit every ambiguous phrase in the law and regulations to get more than their fair share. This ploy is just a little bit more brazen than usual.

    Of course, it doesn’t help that this administration is filled with incompetents.

    –alopecia

    • notanncoulter

      are the ‘ambiguous phrases’ a feature or a bug?
      is it because we have incompetents running nearly the entire gubmint or is is because we have grifters running nearly the entire gubmint? [those are not mutually exclusive conditions]

      • muselet

        Bit of both, I suppose.

        Plus, in my admittedly limited experience, it is nigh-on impossible for a legal document to be written in an unambiguous way, no matter how diligent the author is. Legal language is excruciatingly precise in some ways and infuriatingly sloppy in others. There are always loopholes and exploitable ambiguities to be found if one looks hard enough.

        (I’m not attacking lawyers on this count, by the way. All specialized professional language is baffling to the uninitiated. Reading scientific papers, for example, is an ordeal if you aren’t familiar with the lingo.)

        In this specific case, I think we’re seeing the consequences of regulations written in bad faith being interpreted by corporate lawyers acting in bad faith.

        –alopecia