Federal funding barrier: Billions more for farmers

The government is paying a record amount of subsidies to farmers this year.

President Trump wants a pre-election slush fund of up to $30 billion at USDA that he can spend with no strings attached, said the senior Democrat on the Senate Agriculture Committee on Monday as agricultural aid blossomed into a potential roadblock for a government funding bill. Republicans insisted the USDA could run out of money without an immediate infusion of cash.

“We’re seeing a lot of political payments,” said Sen. Debbie Stabenow, Michigan Democrat. “All of a sudden, we’re talking about lobsters and other seafood getting (USDA) payments” for the first time.

The administration has flooded U.S. agriculture with $33 billion in stop-gap payments since mid-2018 to offset the impact of trade war and the pandemic. It sought a refill of accounts at “USDA’s bank,” the Commodity Credit Corp (CCC), which can spend $30 billion at a time, while offering up to $14 billion in additional coronavirus cash to farmers and ranchers.

House Democrats omitted the so-called CCC replenishment, a Republican goal, and an objective of their own — billions of dollars in pandemic food assistance — from legislation unveiled on Monday to keep the government running through December 11, five weeks after the presidential election. Without an agreement, the government would run out of funding on September 30, the end of this fiscal year.

Stabenow said replenishment “really amounts in many ways to a slush fund because there’s no accountability around where this is going.” She has been in the forefront of Democratic senators who say the administration played favorites in distributing trade and coronavirus aid. Fruits, vegetables, and other specialty crops have been slighted along with farmers who sell their food locally, at farmers markets, or to restaurants, the Democrats contend, in favor of big operators and crops such as cotton and peanuts. Budget experts say USDA can wait until November, the usual date, for the CCC money, said Stabenow.

Some USDA outlays, such as traditional farm subsidies, land stewardship payments and export promotion funding, are due on October 1 but “cannot be paid” without the replenishment, said Texas Rep. Michael Conaway, the senior Republican on the House Agriculture Committee.

“We’re talking about 45 to 50 programs that are in danger,” said Senate Agriculture chairman Pat Roberts, who spoke after Stabenow at an Agri-Pulse summit. “That’s not being responsible.” Roberts described the tussle as “a fuss with the secretary of agriculture over things that happened in the past,” although the argument was ongoing. House Agriculture chairman Collin Peterson suggested earlier this year that USDA should obtain congressional approval before making large expenditures.

The government is paying a record amount of subsidies to farmers this year. The supports will equal 36% of net farm income, said Cornell economics professor Chris Barrett on social media. Median income of farm households this year would be $20,000 higher than median U.S. household income in 2019, he said.

White House economic adviser Larry Kudlow told reporters that “we do prefer additional farm aid” in the short-term funding bill. “Most of all we want a clean CR (continuing resolution) to keep the government open.” When federal officials talk about a “clean” spending bill, they mean legislation without extraneous riders and controversial proposals.

For a summary of the House spending bill, click here.

For the text of the bill, click here.

Produced with FERN, non-profit reporting on food, agriculture, and environmental health.

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