Perdue announces disaster aid amidst budget scrutiny
ALBUQUERQUE, N.M. — Agriculture Secretary Sonny Perdue and other USDA officials today announced the initial details of a $3 billion flood and hurricane-related disaster aid package with loose payment limitations amidst increasing scrutiny of the Trump administration’s decisions to make big payments to big farmers.
In a wide-ranging speech here to the annual meeting of the National Association of State Departments of Agriculture, Perdue said USDA was still “wrestling” with the Office of Management and Budget over the details of the disaster aid package, and that the full announcement would be Wednesday.
But in a telephone news conference that immediately followed Perdue’s speech, Farm Service Agency Administrator Richard Fordyce released details of the program and said he believed all issues OMB raised had been worked out.
Perdue said he knew many producers had “waited patiently” for disaster aid. In a news release, USDA said that agricultural producers affected by natural disasters in 2018 and 2019, including the most recent, Hurricane Dorian, can apply for assistance through the Wildfire and Hurricane Indemnity Program Plus (WHIP+) and that signup will begin Wednesday.
Fordyce said it will take about a week to begin processing payments after applications are made. (See link.)
Farm leaders have noted that $3 billion is not a lot of money to cover the farm disasters for two years. Fordyce said that farmers who experience losses under Hurricane Dorian are eligible to apply, but that USDA will cover the full amount of disasters for 2018, but only 50% for 2019. The extent of losses in 2019 is not known, and it’s unclear whether Congress will pass additional funds to cover losses in the latter part of this year, Fordyce noted.
The news release did not cover the issue of stored grain that had been damaged by flooding, but Fordyce told reporters that there would also be payments for that. He said the payment limit will be set individually at $125,000, but goes to $250,000 if the producer can meet the test of more than 75% of income derived from farming. Under those circumstances, the maximum payment would be $500,000, he said.
Asked why the Trump administration had ignored the usual payment limits set by Congress for both the Market Facilitation Program to compensate farmers for lost export sales and in the disaster program, Fordyce said that the losses due to weather disasters are commensurate with the losses due to trade conflicts.
In his speech, Perdue said that President Donald Trump had called him in April when trade talks with China broke down and said that USDA had to develop a program to blunt the impact on farmers, and that it should be bigger than the $12 billion program in 2018.
USDA developed a program of payments and purchases that is expected to cost $16 billion.
Perdue said that farmers are affected “disproportionately” compared to the rest of the economy because U.S. agriculture is so productive and needs to export.
“We have created an ecosystem in which we have to depend on exports,” Perdue told the elected and appointed state agriculture officials.
The Washington Post reported today that USDA and White House officials and outside economists have questioned the size of the trade aid, which is financed through the Commmodity Credit Corporation, a USDA division established in the 1930s to allow USDA to spend money to help farmers in times of stress. The limit on CCC spending is $30 billion per fiscal year.
Perdue said today that USDA has been careful not to exceed the limit. Under the latest program, part of the spending will occur in fiscal year 2020, which begins on October 30.
The disaster aid comes from an emergency appropriations bill that Congress passed, not the CCC, but the decision on the looser payment limits for disaster aid was made by the Trump administration.
There is no cut in other government spending to pay for the farmers’ trade aid, and it adds to the deficit. Former Rep. Mark Sanford, R-S.C., said today that the decision of Trump and other Republicans to ignore deficit spending is one the reasons he has decided to run against Trump for the Republican nomination for president in 2020.
But in response to a question from The Hagstrom Report at a news conference here following his speech, Perdue defended the administration’s record on the deficit. He pointed to Trump’s budget requests, which Congress has ignored, and said that the administration is “frustrated” that Congress doesn’t follow its proposed budget cuts.
National Farmers Union President Roger Johnson and others have said that ignoring the usual congressionally mandated payment limits on farm subsidies may make it difficult to develop the next farm bill. But Perdue said he believes the big payments to big farmers are justified because it is those farmers who have lost the most in export sales.
In other comments, Perdue said:
▪ On the China trade talks, “the ball is in their court.”
▪ On the U.S.-Mexico-Canada Agreement, House Speaker Nancy Pelosi, D-Calif., has been appropriately “cautious” but the agreement needs to be approved. U.S. Trade Representative Robert Lighthizer will develop ways to address Democrats’ concerns about enforcement.
▪ On immigrant farm workers, “I hope we can have a legal guestworker program. … A guestworker program can be part of solving the illegal immigration problem. That would stop the flow of people coming in to live in the shadows.”
▪ On Japan trade, an agreement should be signed about September 23.
▪ On ethanol, noting that he has “spent more hours” on this subject than any other, “I am hoping we can having some announcement this week.” The industry should focus on “taking advantage of E15 year round” by building the market rather than focusing on the small refinery waivers that the Environmental Protection Agency has announced.
▪ On the move of the Agriculture Department’s Economic Research Service and the National Institute of Food and Agriculture to the Kansas City area, “I think it is the right thing to do, just as much today as when we started thinking about it. I was flabbergasted over the conversation” about it. September 30 is the “drop dead date” for employees to make decisions about whether to move, but some employees will be allowed to stay in Washington longer due to projects on which they are working.
–The Hagstrom Report