FederalTradeOver $630 Million in Federal Bailouts Went to Texas Farmers

Texas farmers have been reeling from tariffs, but these federal handouts and the potential USMCA passage has alleviated some of their concerns.
October 25, 2019
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Last month the House of Representatives included in the federal continuing resolution a provision to increase the borrowing capacity of the USDA — thus raising the amount of taxpayer-backed bailout money available to distribute to farmers hurt by the trade war with China.

According to the USDA, as of September 23, $8.6 billion had been dispersed to farmers across America throughout the first version of the Market Facilitation Program (MFP). 

Over one million applications were submitted to the Department of Agriculture for that $8.6 billion.

Phase two of the MFP, which began taking applications on July 29, has dispersed $4.79 billion to 361,947 farmers and ranchers across the country.

The total approved agriculture bailout money sits at a whopping $28 billion — well over double the roughly $12 billion used to bail out Detroit automakers during the Great Recession in 2009.

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Texas, being a strong agricultural state, has stood to gain and lose a lot during this trade stand-off. In fact, according to USDA data, Texas farmers benefitted handsomely from the bailout program while they have lost significantly during the tariff dispute.

In 2018, almost $247 million had been divvied out to 32,092 Texas farmers and thus far in 2019, that number has increased to over $387 million across 17,501. That’s under $8,000 and just over $22,000 per individual in 2018 and 2019, respectively.

The Texan has requested clarification from the USDA for the significantly fewer individuals receiving significantly more funding from 2018 to 2019. They have not responded as of this publishing.

Laramie Adams, national legislative director for the Texas Farm Bureau, told The Texan, “We are very pleased that [the federal government] included [the borrowing capacity increase] in the continuing resolution.”

“Cutting a lifeline to farmers and ranchers at this time would be detrimental to them,” Adams continued. He then stressed that his organization understands and appreciates what the president is trying to do in pushing back against China’s shifty actions in the market.

China has been labeled a “currency manipulator” by the United States (a charge, however, which some American economists say is an outright “myth”), has been accused of stealing intellectual property, and is being investigated for steel dumping (the process by which one saturates a market to drive down a competitor’s prices).

These issues, and others like the oft-repeated “trade deficit” we have with China, are the reasons why President Trump has focused intently on what he sees as leveling the trade playing field.

As far as how these abuses have affected Texas’ farmers specifically, Adams said, “China has illegally subsidized their farmers by more than three times what we spend.”

Adams stressed these are abuses that must be addressed, but at the same time, farmers and ranchers are “feeling the squeeze from retaliation.”

“China retaliates where it hurts the most and in this instance that is agriculture,” Adams stated.

Added to this larger issue is the currently-in-limbo USMCA (essentially NAFTA 2.0) which has presumed broad support in both houses of Congress — but with impeachment investigations and proceedings heating up, the USMCA has been ignored like the asthmatic in gym class.

Speaker Pelosi reportedly wants to bring the USMCA to the floor in the House before the end of the year. But it’s still possible for the USMCA to remain in purgatory as tensions heat up on both sides over impeachment.

Adams said farmers and ranchers really want to see the USMCA passed “to give them some certainty in trade.”

In terms of the urgency of funding, Adams said, “Any delay in receiving that assistance would have negatively impacted [Texas farmers and ranchers].”

According to Adams, net farm income before the funding increase was already over 50 percent lower than what it was five years ago.

Additional factors compounding the pressure on Texas’ farmers include flooding and droughts that have occurred throughout Texas.

To receive the MFP funding, farmers must apply and then the USDA evaluates their need and then applies a dollar amount to the projected lost revenue as a result of the trade war.

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Brad Johnson

Brad Johnson

Brad Johnson is an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad watching and quoting Monty Python productions.