Very large farms collect one-fifth of USDA's coronavirus payments

The average USDA coronavirus relief payment to farmers is less than $16,000, but the biggest operators are getting payments that are 22 times larger, said an environmental group on Tuesday in questioning the fairness of the $10 billion program. Meanwhile, lawmakers agreed to give more funding to the USDA so it can keep farm supports flowing.

Direct farm payments are forecast at a record high of at least $32 billion this year at the same time revenue from crops and livestock is declining. A week ago, President Trump announced an additional $14 billion was available for coronavirus aid. Sign-up began on Monday and runs through December 11.

The Environmental Working Group, which monitors farm subsidies, said the largest 1% of farms in the Coronavirus Food Assistance Program (CFAP) received one-fifth of disbursements, or nearly $1.1 billion of the $5 billion paid during June, the first month of CFAP. As of Monday, CFAP payments totaled $10.1 billion.

"USDA must make changes to ensure the money goes to small, struggling farms and to farmers who actually do the work," said the EWG. The stopgap programs created by the administration to mitigate the effect of the trade war and the pandemic on agriculture allocate aid on the basis of production, similar to the traditional farm program but with higher payment limits.

"Our issue is more about equity," said Anne Schechinger, EWG senior analyst for economics. "Why should taxpayers be sending most of the money to the largest farms when the largest farms likely have significant assets to fall back on when times are tough? …Smaller farms are more likely to struggle to make ends meet."

According to EWG, the largest 1% of farms received an average payment of $352,432. The average payment for CFAP as of Monday was $15,838. The USDA set a payment limit of $250,000 per farmer or entity, double the limit in the traditional farm program; the limits are somewhat porous. The Government Accountability Office, a congressional agency, says the USDA paid an additional $529 million in trade-war payments in 2019 because of the higher payment limit.

After a day of acrimony, the White House and House Democrats agreed on legislation to keep the government running through December 11, including up to $30 billion for "USDA's bank," the Commodity Credit Crop, which pays for farm supports, land stewardship initiatives, and a myriad of programs. The bipartisan bill "prohibits any payments to fossil fuel refiners and importers," said the House Appropriations Committee. The administration floated the idea last week of giving $300 million of USDA money to oil refineries that were denied EPA exemptions from the RFS.

Democrats initially threatened to deny funding to the CCC in the funding bill. Without safeguards, the money would be turned into an election "slush fund" for President Trump, said Michigan Sen. Debbie Stabenow, the lead Democrat on the Senate Agriculture Committee. "To hold up CCC funding at this time is not in the best interests of agriculture," responded Chairman Pat Roberts, a Kansas Republican. "That's not being responsible."

House Speaker Nancy Pelosi announced the overall agreement and its language to "increase accountability in the Commodity Credit Corp." on Tuesday evening. Pelosi said nearly $8 billion would be added to child nutrition programs. The House passed the bill, 359-57, and sent it to the Senate.

Several billion dollars of routine USDA spending are tied to the Oct. 1 start of the fiscal year. A USDA spokesperson was not immediately available to say if the department was running out of money, as some Republicans contended.

The Trump administration blocked a temporary increase of SNAP benefits in previous negotiations over coronavirus legislation and it was slow to extend school food flexibility as the academic year began, possibly to encourage instruction in the classroom. On Monday, the USDA extended a dozen flexibilities in WIC for the life of the coronavirus national emergency. The flexibilities were due to expire on September 30. But Trump allotted an additional $1 billion last month for the Farmers to Families Food Box giveaway, the administration's answer to hunger during the pandemic.

The text of the short-term funding bill is available here.

To read a summary of the bill, click here.