“The Bigger The Farm, The Bigger The Gov’t Check” – Bailout Goes To Richest Farmers

More than half of President Trump’s $8.4 billion bailout for American farmers through April was received by the top 10% of wealthiest farmers, the Environmental Working Group (EWG) said in a new study published Tuesday.

EWG said the bailout “overwhelmingly flowed to the largest and most successful farmers,” which left very little money for the mom-and-pop farmers affected by the trade war with China.

The advocacy group said top 1% of bailout recipients received on average $180,000 while the bottom 80% collected less than $5,000 for their trade war-induced financial hardships.

The group acquired that data from the US Department of Agriculture via a Freedom of Information Act request. The data showed bailout payments made through the first two rounds of the Market Facilitation Program (MFP). Through April, total MFP payments for 2018-19 were $8.4 billion.

The Trump administration began administering farm bailouts last year after China halted purchases of soybean. Chinese buyers aren’t expected to resume agricultural purchases in 2H19.

As of Wednesday, the latest round of trade talks between both countries collapsed after a half-day of negotiations. The US trade delegation broke off talks with its Chinese counterpart and is already on its way back to Washington, a sign that no new progress was made, and that the probability of China buying agriculture products from the US has collapsed. China will likely continue sourcing from Latin America.

As a result of the trade war, soybean exports to China have crashed to levels not seen since 2004.

The first of the bailouts, announced in 2018, was approximately $12 billion. As China pulled back even more on US agriculture purchases, the Trump administration rushed to issue a second bailout last week, includes $16 billion and $14.5 billion of that are direct payments.

EWG said 82 farms have so far received more than $500,000 in payments but has left many small farms on the brink of bankruptcy.

The group said the first bailout had been associated with crop production, favoring the largest farmers. The second bailout, debuted last week, would support big farms because it was created to pay per acre, EWG said.

The bigger the farm, the bigger the government check,” it said. A USDA spokeswoman said aid payments were made based on a producer’s individual production. “The more acres they farm and bushels per acre they produce – the more assistance they receive,” she said in emailed comments to Reuters.

President Trump’s trade-war-driven farmer bailout is a clear indication that the government is handing out free money, picking winners and losers, and redistributing wealth, otherwise known as socialism.

When the government intervenes in markets, they always tend to break something, this time it was the president’s base located in rural America, scattered throughout the Midwest.

The consequences of the trade war are taxpayer-funded bailouts; the consequences of bailouts is an uneven distribution of wealth that has gravitated towards the richest farmers, driving financial hardships for mom-and-pop farmers that could culminate into another farm crisis on par to the early 1980s.

The moral of the story: Get government out of markets!

via ZeroHedge News https://ift.tt/2YvscNr Tyler Durden

Leave a Reply

Your email address will not be published.