U.S. corn farmers were overpaid by about $3 billion in federal aid in 2019 and money was unevenly distributed, according to a report by the Government Accountability Office (GAO).
After President Donald Trump's administration imposed tariffs, causing international disputes that hurt farmers, the U.S. Department of Agriculture's methods for calculating the amount of damage for each county was faulty, resulting in overpayment and inconsistent payment, the report said.
The report estimated that corn producers received around $3 billion more than the USDA's estimate of trade damage to corn, while payments for soybeans, cotton and sorghum farmers were below the estimated trade damages.
"Though corn yields are higher in the Midwest and West, corn producers received an estimated average of $69 per acre in the South, $61 in the Midwest, $34 in the Northeast, and $29 in the West," the report said.
The Senate Agriculture Committee, headed by Michigan Democrat Debbie Stabenow, requested the GAO report.
"This report confirms that the Trump USDA picked winners and losers in their trade aid programs and left everyone else behind," Stabenow said in a statement. "Making larger payments to farmers in the South than farmers in the Midwest or elsewhere, regardless of whether those farmers actually experienced a larger loss, undermines our future ability to support farmers when real disasters occur."
National Corn Growers Association CEO Jon Doggett said the USDA's higher compensation for corn farmers in 2019 included items the GAO did not consider in its analysis, including the trade damage value for corn ethanol and a high protein livestock feed byproduct of ethanol production.
"Both 2018 and 2019 were terrible years for farmers who experienced net losses due to decisions in Washington and adverse weather conditions. In fact, farmers suffered a $6.3 billion loss in 2018 alone during that time because of the tariffs."
The GAO said it audited the UDSA's Market Facilitation Program.
The GAO recommended that the USDA Office of the Chief Economist revise its internal review process to ensure transparency of its documentation and that the agency conduct a review to ensure proper baseline methods are used in analysis.
Dr. Seth Meyer, the USDA chief economist, responded to the report in an October 21 letter. He said the USDA analysis was based on a widely accepted trade model and methodology that the USDA's Office of Inspector General found to be reasonable, and was applied consistently across a range of commodities for the 2018 and 2019 trade mitigation packages.
He said the USDA Office of the Chief Economist did not make the policy decision, and it provided options to policy makers.
"The policy decisions to select between a variety of alternatives that GAO has flagged as problematic were made by senior USDA leaders under the previous administration and not OCE," he said.
Trump imposed higher tariffs on certain products from China, Europe, Canada and other key trading partners in 2018. China, Canada, Mexico, the European Union, Turkey and India responded with tariffs targeting U.S. products, including agricultural commodities. In 2018 and 2019, many U.S. agricultural exports declined and the Trump administration poured money into support for farmers including the Market Facilitation Program that was the subject of the GAO audit.
Corn, cotton, sorghum, soybean and wheat farmers were paid more than $21.7 billion in 2018 and 2019. Dairy and hog farmers were paid more than $900 million, and specialty crops including tree nuts, cherries, cranberries, ginseng and table grapes were paid $346 million.
Before he lost the November 2020 election, Trump made it clear he was courting farmers' votes with federal aid. In a late October 2020 campaign appearance in Omaha, Nebraska, Trump said he believed farmers were better off getting government payments than relying solely on their farming receipts.
In 2019, one-third of U.S. farm income came from direct government payments and last year it was nearly 40 percent of their income. Some farm groups questioned the way the federal money was being distributed to commodity and livestock farmers.
The Associated Press contributed to this report.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
