Thursday, August 6, 2020
If Congress provides another $20 billion in aid to farmers in the next COVID-19 spending bill, total federal farm spending this year could top $50 billion, setting a new record – and once again violating U.S. commitments to international trading partners.
Bailout payments designed to help farmers hurt by the COVID-19 pandemic and President Trump’s trade war likely pushed federal farm spending in 2019 beyond the subsidy caps set by an international trade agreement.
Last year, farm spending for the first time topped the spending limit set by a 1994 trade agreement. Federal farm spending will likely exceed the $19.1 billion cap on “trade distorting” subsidies in 2020 as well.
This year, farm spending has been inflated by more than $7 billion in Paycheck Protection Program loans, including $1.8 billion to California farmers. Adding another $20 billion in farm spending, as some legislators have proposed, will further increase the likelihood that the U.S. will exceed the cap – and invite legal challenges from trading partners.
By contrast, providing more financial assistance to protect farmworkers and meatpacking workers from COVID-19 would not count against the cap.
Taxpayers provided $34 billion to farmers during the 2019 crop year – well above the cap set by the 1994 World Trade Organization agreement. Those payments included $14.5 billion from the Market Facilitation Program, or MFP, designed to offset the president’s trade war,