Trump’s new bailout program for farmers and ranchers, explained

Farmers in Montgomery, Minnesota, in 2019. President Trump recently announced a $19 billion bailout program for farmers and ranchers. | Ricky Carioti/The Washington Post/Getty Images

Trump wants to bail out America’s farmers — while continuing to push food stamp cuts.

President Donald Trump announced at a White House briefing on Friday that his administration will use $19 billion in funds already appropriated by Congress to aid farmers and ranchers during the coronavirus crisis.

“The program will include direct payments to farmers, as well as mass purchases of dairy, meat and agricultural produce to get that food to the people in need,” Trump said during the briefing.

The Coronavirus Food Assistance Program, as the new initiative is called, will involve $16 billion in direct payments to farmers and ranchers, Agriculture Secretary Sonny Perdue explained at the press conference. Initial funds will come through $6.5 billion in existing funding as part of the Commodity Credit Corporation, a New Deal-era subagency of the US Department of Agriculture tasked with stabilizing the agricultural sector through purchases, sales, and direct payments. Those CCC funds will be supplemented with an additional $9.5 billion in coronavirus funds authorized by Congress through the CARES Act.

In addition to the $16 billion in direct payments, Perdue announced, “the USDA will be purchasing $3 billion in fresh produce, dairy, and meat products to be distributed to Americans in need through our food bank networks, as well as other community and faith-based organizations.”

The new program comes after numerous reports that farmers are dumping milk, abandoning vegetables ready for harvest, and otherwise taking massive losses as they try to stay afloat amid the massive recession. “In Wisconsin and Ohio, farmers are dumping thousands of gallons of fresh milk into lagoons and manure pits,” the New York Times’ David Yaffe-Bellany and Michael Corkery reported on April 11. “An Idaho farmer has dug huge ditches to bury 1 million pounds of onions. And in South Florida, a region that supplies much of the Eastern half of the United States with produce, tractors are crisscrossing bean and cabbage fields, plowing perfectly ripe vegetables back into the soil.”

“Having to dump milk, or plow under vegetables ready to market is not only financially distressing, but it’s heartbreaking as well to those who produce them,” Perdue said at the press conference. “This program will not only provide direct financial relief to our farmers and ranchers, Mr. President, but will allow for the purchase and distribution of our agricultural abundance in this country to help our fellow Americans in need.”

Sen. John Hoeven (R-ND), who chairs the Senate appropriations subcommittee responsible for agricultural funding, released more details on the new program. Most of the funding, per his press release, will go to farmers of livestock: $5.1 billion to cattle farmers, $2.9 billion to dairy farmers, and $1.6 billion to pig farmers. The payments will be limited to $125,000 per commodity and $250,000 per the individual or entity who’s benefiting, to limit funds for massive agribusinesses. They will be calculated as the combination of 85 percent of price losses from January 1 to April 15, 2020, and 30 percent of expected losses for the next two quarters after April 15.

That will cushion some of the blow, but still leave farmers underwater, especially considering expected losses post-April 15 that will only be partially reimbursed.

At the same time, Trump and Perdue want to cut food stamps

The $3 billion in direct food provision to food banks comes despite Trump and Perdue’s efforts to slash the Supplemental Nutrition Assistance Program (SNAP), colloquially known as “food stamps.” In 2018, Perdue proposed a rule kicking 755,000 people off food stamps by tightening work requirements. The rule was finalized last December, and was set to take effect on April 1, but a federal judge stayed it, citing coronavirus concerns.

In 2019, Perdue proposed an even bigger cut by suggesting a change to “categorical eligibility” rules that would no longer allow people benefiting from other safety net programs, like Temporary Assistance for Needy Families (TANF), to be automatically enrolled in food stamps. That rule has yet to be finalized.

Most recently, the administration and Congress failed to include an increase in SNAP benefits as part of the CARES Act stimulus legislation, which could have served as a complement to stimulus checks and enhanced unemployment for the poorest Americans as the recession worsens.

The Trump administration has said its rule changes to SNAP are expected to reduce spending by $50 billion over 10 years, or about $5 billion annually. That would swamp the $3 billion in food allocated to food banks as part of this new initiative to aid farmers.

Advocates for the food stamps program, like Center on Budget and Policy Priorities senior fellow Dottie Rosenbaum, have urged the White House and Department of Agriculture to stop pursuing their rule changes cutting SNAP, especially as more Americans need food assistance now than did when the rules were proposed. So far, despite their comments on the need to support food stamps, Trump and Perdue have not followed that advice.

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