Report: USDA Tariff Damages Payment Calculations Must Be Recalibrated | Harvests

A Government Accountability Office report released in November but released in December states that under the Donald Trump administration, tariff relief paid by the US Department of Agriculture to corn growers was out of balance and exceeded the calculated damages resulting from tariffs.

The GAO report was commissioned by the Senate Agriculture Committee chaired by Senator Debbie Stabenow, D-MI.

GAO’s report, titled “Stronger Adherence to Quality Guidelines Would Improve Future Economic Analyzes,” estimates payments to corn farmers under the market facilitation program to be $ 3 billion more than damages real caused by retaliatory tariffs from other countries.

The MFP tariffs and payments have come in response to the tariffs Trump has imposed on products from other countries. A total of $ 23 billion has been paid to American farmers under this program. The report also found that payments to soybean, cotton and sorghum producers were lower than the calculated tariff damages. “Because the USDA decoupled the commercial damage of an individual unskilled crop and its payment rate, the USDA provided total payments to a non-specialized crop that were greater or less than the estimated commercial damage of the crop,” concludes The report.

The method the USDA used to calculate tariff damage meant that areas that suffered the most tariff damage overall received higher payments, although the particular crop was not as affected. For example, although corn yields are higher in the Midwest and West, corn growers received an average of $ 69 an acre in the South, $ 61 in the Midwest, $ 34 in the Northeast. and $ 29 in the West. The USDA used the county’s minimum and maximum rates to help address potential inequalities, but regional differences remained.

Stabenow, whose office requested the report, said, “This report confirms that the Trump USDA has picked winners and losers in its trade aid programs and left everyone behind. Making larger payments to farmers in the South than to farmers in the Midwest or elsewhere, regardless of whether those farmers actually suffered a larger loss, compromises our future ability to support farmers when real disasters strike. “

The report says the USDA’s method of calculating tariff payments was aimed at correcting shortcomings of an earlier method used in 2018. “In 2019, seeking to address this limitation and avoid influencing planting decisions, USDA calculated separate payment rates per acre for each county and paid the same rate to all non-specialty growers in the county. USDA calculated each county’s rate as weighted average commercial damages per acre, based on dividing the county’s total commercial damage to several qualifying non-specialty crops by the county’s historic acres of qualifying crops… Crop payment rates were generally higher in the South due to the proportion of cotton, sorghum and soybeans , which suffered higher commercial damage per acre.

The report recommends that USDA “review its internal review process to ensure that USDA’s internal reviews of future economic analyzes address the transparency of its analysis documentation” and make better use of benchmarks.

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Elaine R. Knight