Debate Over MFP Fairness

Texas A&M Economist Counters Michigan Senator's Criticism on Trade Aid

Jerry Hagstrom
By  Jerry Hagstrom , DTN Political Correspondent
Dueling charts show different interpretations of states where farmers have received the most MFP payments. One analysis shows southern states have received higher payments per acre, while another analysis shows farmers in Midwest states received the largest overall payments. (Charts from Senate Agriculture Committee minority staff and Texas A&M Professor Bart Fischer)

BONITA SPRINGS, Fla. (DTN) -- Bart Fischer, a former House Agriculture Committee chief economist who is now a professor at Texas A&M University, said here Tuesday he disagrees with the claim of Senate Agriculture Committee ranking member Debbie Stabenow, D-Mich., that the Trump administration's Market Facilitation Program trade aid payments disproportionately benefited the South.

Stabenow on Tuesday announced the Government Accountability Office has launched an investigation into the Trump administration's trade aid based on her request.

"It's clear that the Trump administration's trade assistance payments pick winners and losers rather than help the farmers who have been hit the hardest by this president's trade policies," Stabenow said in a news release. "This investigation will shed more light on what has been happening, and bring accountability and fairness to a program that has spent billions of taxpayer dollars."

Showing a chart of states where the MFP money went at the Crop Insurance Industry Annual Convention, Fischer pointed out that of the top 10 states in MFP payments, Texas was the only one from the South. Michigan was not one of the top 10, however.

Fischer did not mention Stabenow's name, but said, "It was not about picking regional winners and losers, it was the unforgiving formula" based on export losses, acreage and yields. "The Midwest got most of the money -- twice as much money."

In her statements on MFP, Stabenow has emphasized that "95% of top payment rates have gone to southern farmers" amid other criticisms of the formula. Stabenow has frequently charged that the aid program was biased, providing more funds per acre to farmers in southern states that voted for President Trump and favored large and foreign agriculture companies over small farms.

Stabenow's office released an analysis last week showing the highest payments-per-acre states were Georgia, Mississippi, Alabama, Arkansas, Tennessee and Louisiana. Stabenow's analysis highlighted, "Georgia is projected to receive over $110 per acre after the last installment and currently leads the nation with payments of over $80 per acre for second-year MFP payments, while over 30 states remain below $40 per acre."

Fischer told the crop insurers he believed the "undercurrent of regional inequity" came about because the payments for corn were so low, particularly in the first 2018 round of payments. The first round of trade aid was based solely on the decline in U.S. exports to China that year.

Soybean growers, whose exports plummeted, got the biggest payments while the corn payment was tiny. For 2019, the Trump administration took into consideration longer-term trade problems, which increased payments to corn growers, but also to cotton growers.

Fischer did acknowledge there were inequities in the program, but said the most important problem was for producers of exported commodities who are in counties in which the main commodity produced was not exported as much.

Fischer said the MFP program was very important to farmers over the last two years.

"I don't think you can talk about the farm economy or farm income without talking about MFP," Fischer said.

Several farmers in Texas A&M's groups of representative farms are still in fragile shape, Fischer said, adding he believes there would be a justification for a third round of MFP payments in 2020.

Fischer talked about MFP payments as part of a larger presentation on the status of American farms.

Stabenow's analysis of MFP payments: https://www.agriculture.senate.gov/…

Fischer's presentation on farm policy and financial review: https://bit.ly/…

DTN Ag Policy Editor Chris Clayton contributed to this report.

Jerry Hagstrom can be reached at jhagstrom@njdc.com

Follow him on Twitter @hagstromreport

(CC/CZ)

Jerry Hagstrom