Editorial: Fix the unfair trade-war farm bailouts

By:  The Seattle Times Editorial Board
Source: The Seattle Times

Washington is one of America’s most trade-reliant states, so President Donald Trump’s ongoing trade  negotiations have brought broad economic uncertainty. With agriculture the second-biggest sector of the state’s export market, it initially appeared the announcement of $16 billion in farm bailouts meant much-needed stability for farmers caught in the trade-war crossfire.

Instead, Washington crop growers have been given short shrift by the United States Department of Agriculture. A minority report of the U.S. Senate’s Agriculture, Nutrition and Forestry Committee in November showed that in the first round of trade-crisis relief payments, farmers in some Southern states have already received more than $50 per acre on average while Washington farmers were sent less than $10 an acre.

Additionally, the USDA calculated outsize trade damage costs for certain crops grown widely in the South — such as cotton and sorghum — compared to corn and soybeans, which are grown and exported here. Cotton and sorghum have not suffered from the trade war more than other crops. According to the Senate study, prices for both crops have risen.

On Nov. 12, Washington Sens. Patty Murray and Maria Cantwell joined other Democratic senators in signing a letter to U.S. Agriculture Secretary Sonny Perdue decrying that this iniquity “is picking winners and losers among farms and regions.” Weeks later, Perdue has yet to respond. Federal agencies cannot keep ignoring Washington’s needs while pursuing trade policies that worsen the pain.

The USDA’s own data shows this imbalance starkly. The agency sets farmers’ bailout payment eligibility using a county-by-county calculation. Every Washington county’s farmers will be eligible for $32 an acre or less when all the payments come in. Farmers in 15 counties scattered across the state get the minimum of $15 per acre.

Every Alabama county got a total rate of $33 to $150 an acre. Nationally, 184 of the 193 farm counties — 95% — that will get $100 or more per acre are in Southern states.

Farmers in Georgia, where Perdue was previously governor, have already collected $50 per acre, the highest rate in the nation, and will collect more in two more scheduled rounds of bailout payments.

This unprecedented farm bailout must be more fairly handled for farmers from the Pacific Northwest to the Midwest Heartland states.

Farmers would much rather have a repaired trade policy than federal subsidies, said Dan Wood, executive director of the Washington Dairy Federation. But the quick infusion of federal dollars promises to help them through what is hopefully short-term hardship, Wood said.

With farmers currently signing up for the second round of payments, the USDA must immediately move to repair its unfair regional bias before the money is exhausted. Additional fixes are needed to this new program as well. As the Democratic senators wrote in their letter to Perdue, the program does not prioritize small farms over international conglomerates, even though small operators are most vulnerable to the market volatility of the tariff dispute.

The senators’ letter expressed fear that this aspect “will lead to further consolidation of family-owned farms and wipe out the next generation of farmers.”

A federal bailout program is unsustainable as long-term policy, but done properly it can ensure survival for businesses caught in temporary tumult. In this case, President Trump’s policies are both the cause and the inadequate balm for this crunch. To be nationally effective, the bailout must be handled with fairness.