Dems exaggerate in slamming Trump farm bailouts as “handout for large agricultural companies”

Shortly before President Donald Trump’s latest visit to Wisconsin, state Democrats leveled a series of attacks on his agriculture policies.

A June 18, 2020, news release from the Democratic Party of Wisconsin asserted Trump’s "failed COVID-19 response has crushed farmers in Wisconsin" and criticized the president’s trade war with China. Then it turned to the recent federal bailout efforts.

"Trump has never seen farmers as more than a political pawn critical to his re-election chances," the release said. "He used their pain to push through a multi-billion-dollar bailout program that was nothing more than a handout for large agricultural companies."

It’s a key topic in Wisconsin, where 36 farmers filed for Chapter 12 bankruptcy in the first quarter of 2020 alone, compared to 57 in all of 2019. 

Have Trump’s bailouts really helped only the largest farming operations?

The government provides billions of dollars to farmers through an array of programs, including crop insurance and commodity programs to help farmers survive low yields or low prices, and various disaster aid.

But the Wisconsin Democrats’ reference to "bailouts" narrows the focus to the two recent programs that provided additional aid to farmers.

The Market Facilitation Program paid out more than $14 billion in 2018 and 2019 to mitigate impacts from trade wars, and the Coronavirus Food Assistance Program — announced in April — is intended to provide up to $19 billion for farmers affected by the pandemic.

Farm involved in directly producing crops were eligible, including large industrial farm operations.

Here’s what we know about who got that money.

Payments from the Market Facilitation Program have skewed heavily to large farms, according to the Environmental Working Group, which describes itself as a non-profit organization dedicated to protecting human health and the environment. The group obtained detailed data through October 2019 via Freedom of Information Act requests.

Through that point, 55% of payments went to the top (largest) 10% of farmers — an average of $128,000 per recipient. Just 25% of payments went to the lowest 80% of farmers — an average of $7,000.

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"This money really does go to the largest farms, and the smallest farms are the ones that need it the most," said Anne Schechinger, senior economics analyst with the group.

The overall average was $23,000 per recipient.

Large farms could collect a higher share of the money in the market program because of a loophole in the maximum payment policy, Schechinger noted in a July 2019 Washington Post story. Payouts were capped at $250,000 per person, but many farms are set up as partnerships, so each partner could receive that amount — even if there were a dozen or more.

The second bailout, addressing the coronavirus impact, limited the payouts to three shareholders, so $750,000 per farm. The coronavirus program also generally limits the aid to farms with average annual income of $900,000 or less from 2016 to 2018.

The payments have changed somewhat as a result.

As of June 15, 2020 — the latest available data at the time of the Wisconsin Democrats’ news release — the average payment under the coronavirus program was $13,000. That could mean fewer farms were getting massive payouts. (The average rose to about $15,000 in the June 29, 2020, update)

But that’s the most detail we have on the coronavirus program, since the government hasn’t yet released a breakdown of individual payments. So there’s no way for the state Democratic Party to prove this element of their claim.

The coronavirus program is ongoing, with applications accepted through Aug. 28, 2020. Producers are eligible if they have suffered a 5% or greater loss during the pandemic.

The Democratic Party of Wisconsin claimed in a news release that bailouts under Trump have been "nothing more than a handout for large agricultural companies."

The first of the two farm bailouts did indeed skew toward large farms, with 10% of recipients receiving 55% of the funding.

We don’t yet have detailed data on the second bailout that would conclusively confirm or rebut this claim, so the state Democratic party can’t prove whether their assertion holds true for this program. But we do know the government changed the payment caps to limit how much the largest farms can receive.

And the claim wasn’t simply that payments skewed toward large farms, it was that the bailouts were "nothing more than a handout" for large producers. That’s a significant exaggeration.

We rate this claim Mostly False.