When news broke that Gov. Jim Justice’s family farms had received the maximum payout ($125,000) in federal subsidies for soybeans and corn as relief from the effects of the trade war with China, the reaction from critics was quick, expected — and off the mark.
Certainly, there are legions of small farmers whose financial standing is far more precarious than the governor’s and other large-scale operators. Justice is, after all, a wealthy man with significant holdings in coal mining, the hospitality industry and agriculture. While he would have been able to weather the storm of depressed commodity markets better than most, his farm operations, just like the little guy with a fraction of acres under production and no other means of cash flow, were eligible, too, for federal relief.
But don’t blame Justice for taking advantage of the rules of the road. If you are ticked off that the federal bailout — using taxpayer dollars — is exacerbating the economic disparity between large and small farmers, save the outrage for loopholes in the legislation and President Trump’s trade war with China.
The administration’s first round of bailouts has distributed $8.4 billion — with most of it going to big-time agribusinesses. The nonprofit Environmental Working Group (EWG) issued a report that found the top one-tenth of recipients has received 54 percent of all payments. Eighty-two farmers have each received more than $500,000 in trade relief. And — take a deep breath — one farm in Missouri has received $2.8 million.
Further, the top 1 percent of recipients of trade relief received, on average, $183,331. The bottom 80 percent? Less than $5,000, EWG said.
And all of that is in the plan. The federal program is designed to provide support proportionate to a farm’s size and success. The more acres of corn and beans and the more bushels per acre, the more assistance farmers receive. To the rich go the rewards.
If this song and dance all sounds and looks too familiar, we would remind you that 83 percent of benefits of the president’s tax relief law a couple of years ago went to the wealthiest among us. It’s just how this administration rolls.
And because our country’s economic elites have better lawyers and lobbyists wandering the halls of Congress, loopholes in the relief program permit some farmers to quadruple-dip from federal aid programs.
Not only has this been a year of punishing trade tariffs, it has also been one of natural disasters and weather anomalies that have kept thousands of acres out of production and commodity prices depressed.
As such, farmers may be receiving money from either or both rounds of the trade relief, agricultural-risk coverage and price-loss coverage — in addition to crop insurance and money from the disaster relief bill.
Farmers are a proud and independent lot and are not fond of being on federal welfare. They want access to open markets, and they want government to get out of their way.
But this trade war has been a disaster. U.S. farm exports to China were down by $1.3 billion during the first half of the year. The president’s trade war is, in part, responsible for pushing the delinquency rates for commercial agricultural loans in both the real estate and nonreal estate lending sectors to a six-year high. In the past year ending in June, there were a total of 535 Chapter 12 farm bankruptcy filings, up 13 percent. In Kansas and Minnesota, bankruptcy filings reached the highest levels of the past decade.
And then there is this: In a Fox News interview, Patty Edelburg, vice president of the Washington-based National Farmers Union, said, “We’ve had a lot more bankruptcies going on, a lot more farmer suicides.”
Contrary to the president’s hubris, trade wars are neither “good” nor “easy,” as he has said.
Here, in a nutshell, is the damage this president has wrought: From 2000 to 2017, U.S. agricultural exports to China increased by 700 percent. From 2017 to 2018, U.S. agricultural exports to China fell more than 50 percent. The newest set of data will certainly show further erosion.
The taxpayer tab for the president’s folly will hit $28 billion before the year is out — making the president’s response twice as expensive as the 2009 bailout of Detroit’s Big Three automakers, which cost taxpayers $12 billion.
And this was of his own making.
So before putting a target on Justice’s back for going after and receiving what was rightfully his, you might want to shift your sights to D.C.