From the U.S. Government Accountability Office, www.gao.gov

Transcript for: USDA Assistance for Farmers Affected by Trade
Disruptions and Tariffs

Description: Last year, the U.S. Department of Agriculture announced its
plans to assist farmers directly affected by trade disruptions and
tariffs. These disruptions affected a variety of agricultural products,
such as soy and pork. Since announcing its plans, USDA has distributed
about 14.5 billion dollars in payments to farmers under the 2019 Market
Facilitations Program. We talk with Steve Morris, an expert on federal
agricultural programs and a director in our Natural Resources and
Environment Team about these payments. 

Related GAO Work: GAO-20-700R, USDA Market Facilitation Program:
Information on Payments for 2019

Released: September 2020

[Intro Music]

[Steve Morris:] Trade disruptions can have some significant impacts on
farmers and the economy.

[Holly Hobbs:] Hi and welcome to GAO's Watchdog Report, your source for
news and information from the U.S. Government Accountability Office. I'm
Holly Hobbs. Last year, the U.S. Department of Agriculture announced its
plans to assist farmers directly affected by trade disruptions and
tariffs. These disruptions affected a variety of agricultural products,
such as soy and pork. Since announcing its plans, USDA has distributed
about $14.5 billion in payments to farmers under the 2019 Market
Facilitations Program. Today, we talk with Steve Morris, an expert on
federal agricultural programs and a director in our Natural Resources
and Environment Team about these payments. Thank you for joining us,
Steve.

[Steve Morris:] Good morning, Holly. Thanks for having me on.

[Holly Hobbs:] So, Steve, a basic question to start, how can trade
disruptions and tariffs impact farmers?

[Steve Morris:] Well, Holly, you know, every year, U.S. farmers export
about 20% of what they grow and produce to other countries, so any
restrictions on these exports can negatively impact both the farmers
livelihood and also the broader economy. So, for example, the tariffs
imposed by China on the U.S. resulted in a steep decline in certain
agricultural exports, but it also lowered prices for some of the
affected products and resulted in some lost revenue from farmers. So,
USDA's Market Facilitation Program, it started in 2018, expanded in
2019, essentially was designed to aid these farmers by compensating them
for the disruptions and any lost income.

[Holly Hobbs:] And so, how do farmers apply and qualify for the
assistance?

[Steve Morris:] To receive financial aid to the program, farmers either
apply online or in person at their local USDA office. As part of that
application process, farmers will submit records showing both, the type
and the amount of crops and animals they produced. In addition, farmers
will have to show that their income was below a certain level. And
generally, that means about less than $900,000 a year, and also that
they were actively engaged in the managing, and the working on the farm,
and not just investors in the farm.

[ Music ]

[Holly Hobbs:] So, it sounds like USDA has provided assistance to
farmers to help offset the effects of disruptions that are outside of
their control, such as changes in trade and tariff policies. Steve, do
we know how many farmers received aid and what that aid looks like?

[Steve Morris:] In this report, we took a really high level look at the
2019 payments and also some of the characteristics of the payments. So,
overall, the program provided aid to about 870,000 farmers. Now the
average payment per farmer was around $16,000. But under the program
rules, individual farmers could have received up to a half a million
dollars. Some farms made up of several individuals actually collected
much higher amounts than that. For example, we noted that there were 62
farms that received $1 million or more and there was actually one farm
that received about $2 million. Now, we also found that most of the
payments -- more than 90%-- went to farmers who grew corn and soybeans,
while less than 10% of the aid went to other farmers, folks who may have
been raising dairy, or hogs, and growing certain types of nuts and
fruits.

[Holly Hobbs:] And Steve, last question, what's the bottom line of this
report?

[Steve Morris:] I think the bottom line here, Holly, is that trade
disruptions can have some significant impact on farmers and the economy,
and the Market Facilitation Program has helped to offset some of these
impacts by providing billions of dollars in aid to almost a million
farmers, so most of whom grew corn and soybeans. We did not have any
recommendations in this report, but we do plan to take a deeper look at
the program, including how USDA determined which crop should be covered
and also at what dollar amounts.

[Holly Hobbs:] That was Steve Morris talking about GAO's recent review
of USDA's assistance to farmers affected by trade and tariff policy
changes. Thank you for your time, Steve.

[Steve Morris:] Thanks so much, Holly.

[Holly Hobbs:] And thank you for listening to the Watchdog Report. To
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doing. For more from the Congressional Watchdog, the U.S. Government
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