Trump starts a trade war with China. The Chinese hit our farmers with tariffs in retaliation. Trump throws some money at the farmers to compensate them for their losses. There is supposed to be a “federal cap” on how much money a farmer receives in compensation. Turns out that the farmers with larger farms figured out how to get around those federal caps.
About 83 percent of the aid under the Market Facilitation Program has gone to soybean farmers because they’ve suffered most under China’s retaliatory tariffs. The program sets a $125,000 cap in each of three categories of commodities: one for soybeans and other row crops, one for pork and dairy, and one for cherries and almonds. But each qualified family member or business partner gets their own $125,000 cap for each category. Farmers who produce both soybeans and hogs, for example, would have separate caps for each and could thus collect $250,000.
Guess what this loophole allows larger farmers to do? You can have multiple “partners” claim compensation for the same farm. Same address.
At Peterson Farms in Loretto, Kentucky, eight members of the family partnership collected a total $863,560 for crops grown on over 15,000 acres, including wheat and corn used at the nearby Maker’s Mark bourbon distillery. Co-owner Bernard Peterson said it didn’t make up for all their losses at a time when it was already hard to be profitable. The $1.65 per bushel aid payments for soybeans fell well short of losses he estimated at $2 to $2.50 per bushel.
And Peterson isn’t even the worst offender, but you get the idea. And it doesn’t even have to be family members, just partners. Probably another reason why some of the farmers aren’t complaining much about those Trump tariffs. It helps if you are not feeling the full economic impact of Trump’s trade war with China.