U.S. Sen. Dick Durbin (D-Illinois) released a statement earlier this month accusing the United States Department of Agriculture of treating Illinois soybean farmers unfairly by playing favorites with trade war aid payments.
“(The) USDA has overcompensated southern cotton growers, whose market losses are small and whose prices have gone up, with more aid on a county-by-county basis than Illinois’ soybean farmers,” Durbin said. “Our farmers are coming off one of the toughest years in memory, and the USDA’s formula for trade aid payments adds insult to injury.”
Durbin was referring to the Market Facilitation Program, which is the name for the approximately $28 billion in aid President Donald Trump sent to farmers who were negatively impacted by America’s trade war with China.
Trump started that trade war in an effort to improve conditions for American companies in China, reduce the trade deficit with China and level the playing field for American businesses competing with Chinese one.
The U.S. and China imposed hundreds of billions worth of tariffs – taxes on imports or exports between sovereign states meant to encourage or protect domestic business – on each other during the conflict.
Last month, American and Chinese officials agreed to the first phase of a trade deal that will see the Asian nation increase its imports of American agriculture products by $32 billion.
But the trade war is technically still active because Trump has said he will not lift U.S. tariffs until phase two of the agreement is negotiated.
The National Cotton Council reported the cotton futures price fell by about 30 cents per pound in 2019, which equates to about $250 less revenue per acre for average yields.
According to Capitol News Illinois, however, soybean farmers were hit harder by the trade war, as soybean exports fell by $9 billion, a drop of 75 percent.
By contrast, cotton exports fell 6 percent, which is a $54 million decrease, Capitol News Illinois reported.
“Illinois soybean farmers need this trade aid because of the financial losses they’ve incurred,” Durbin said. “Under President Trump, farmers last year received 40 percent of their income from the government. That’s because the Trump Administration’s trade approach with China seriously damaged major export markets for Illinois and possibly years to come.”
Durbin’s criticism stems from a November report by Democrats on the U.S. Senate Committee on Agriculture, Nutrition and Forestry, which Durbin serves on.
That report found the first round of trade war aid payments saw a higher per acre payment rate per county going to southern farmers.
The report, which also criticized the USDA for favoring wealthy farms and foreign companies and failing to have a plan to rebuild markets, found that 184 of the 193 counties that got a per acre payment rate for non-speciality crops like soybeans over $100 per acre were in the south.
In Illinois, the average payment rate was $69, with the state ranking sixth behind five southern, cotton-heavy producers in terms of most aid per acre.
Monroe County received $62 per acre. The maximum rate is $150 per acre.
The Democratic report also said the payment rates “failed to benefit the farmers who have been hit the hardest.”
“In the north, midwest and west, farmers who previously exported their products to China are farther away from alternative markets,” the report stated. “The extra distance to the new markets creates transportation costs on top of lower prices.”
The per acre payment rate, however, does not tell the whole story.
According to the USDA, Illinois received over $1 billion in aid over the first two rounds of payments for non-speciality crops, which ranks second in the nation behind only Iowa.
The final round of payments were released earlier this month, and the American Farm Bureau Federation once again found that Midwestern soybean states like Illinois will receive the most money and southern cotton states will get the most per acre.
In Monroe County, it appears there have been no or few problems with the program.
“Nobody’s complained to us anyway about the money at all,” Phil Saale, a grain originator at Gateway FS, said. “To be honest, we really don’t hear anybody talk about it, so I’m guessing it’s not too big of a deal then.”
Saale said that might be the case because Monroe County was not as adversely affected by the trade war and heavy precipitation of 2019 as others.
“We had some pretty decent yields last year anyway, especially with the conditions that we had,” Saale noted. “Obviously the guys in the Bottoms didn’t get much crop with the flooding, but flood insurance probably has helped them a little bit.”
Overall, Saale said the Market Facilitation Program has been received well in the county.
“I think it’s something that’s definitely helped,” he said. “I think (farmers) are glad to have it, and they’re not going to complain about it because they’re just happy to have some money.”