The increase in payment limits for the 2019 version of the Market Facilitation Program allowed large farming operations to collect an additional $519 million over the 2018 program, the Government Accountability Office reported Monday.
Some 22% of that amount went to 1,605 farms in Texas, according to the GAO report requested by Sen. Debbie Stabenow of Michigan, the ranking Democrat on the Senate Agriculture Committee.
MFP was created in 2018 by the Agriculture Department to compensate farmers for the impact of retaliatory tariffs imposed by China. For 2019, USDA doubled the payment limit from $125,000 to $250,000.
About 10,000 farms nationwide, 1.3% of the total program recipients, benefited from the higher limit. The Texas farms collected $114.9 million as a result of the higher limits, followed by the $44.1 million that went to Illinois and $30.9 million that went to Iowa.
The GAO, the nonpartisan investigative arm of Congress, also found the 25 farms that received the largest payments from the program shared a total of $37 million, led by one southern operation that collected a total of nearly $2.1 million. Ten different individuals associated with the operation, which produces corn, cotton and sorghum, qualified for payments.
The report didn’t identify the operations by name and only disclosed the region where they were located.
The second largest 2019 MFP beneficiary, which has operations in the South and Midwest, received $1.98 million.
“From the start, I’ve been concerned that the Trump administration’s trade payments have picked winners and losers and left small farms behind,” said Stabenow.
“Unfortunately, the Trump administration’s unequal treatment of farmers is a pattern that we’re continuing to see in USDA’s COVID-19 relief program,” she said, referring to the Coronavirus Food Assistance Program, initiated this spring with a similar $250,000-per-person payment limit. “The administration needs to stop playing favorites and start helping the farms hit the hardest," she said.
The 2019 payments totaled $14.4 billion; Iowa received the most of any state at $1.58 billion, followed by Illinois at $1.45 billion. Two other states, Texas and Kansas, received just over $1 billion.
The average individual payments by state ranged from a high of about $42,500 in Georgia to less than $2,000 in Rhode Island, according to the GAO analysis.
The report also assessed the 2019 payment rates relative to market prices for selected crops.
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The rate for sorghum was the highest, at 56% of the USDA price projection for that commodity in May 2019. Cotton was second at 40% of the price projection, followed by soybeans at 25.3%, wheat at 8.7%, wheat at 7%, rice at 5.6%, corn at 4.2% and dairy at 1.1%
USDA issued a statement defending both the MFP payment rates and limits:
"MFP was crafted to assist farmers from unfair and illegal trade damages from China and other countries – it was not designed to be a general farm bill program. It was also designed to make sure farmers who are most impacted receive the most aid. For example, cotton and sorghum received higher MFP payments because they had significantly higher trade damages per unit of production compared to other MFP commodities.
"Large farmers account for 10% of all farms, but those farmers operate 52% of total farmland and generate 79% of the total value of production. As a result, trade impacts on these farmers was relatively greater, which means they received higher payments."
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