Three things to watch as farm aid floodgates reopen

POLITICO Weekly Agriculture
By RYAN MCCRIMMON

WELCOME TO WEEKLY AGRICULTURE! We hope everyone enjoyed some football and fall weather this weekend. Today marks the start of another round of stimulus checks to farmers and ranchers, up to $14 billion in total, as Washington continues flooding the agriculture industry with record levels of taxpayer aid. So let’s step back and look at three major economic and political implications of what’s become a defining feature of federal farm policy in recent years:

Even before the new batch of payments, government spending was projected to account for more than a third of all farm income this year, driven by the historic coronavirus relief programs. But the rapid rise in subsidies precedes the pandemic: Agricultural aid has grown every year of the Trump administration, including a roughly 65 percent increase in two consecutive years — a trend that concerns some ag economists.

— If you look past the topline numbers, plenty of producers say the money hasn’t reached their corner of the sprawling farm industry. In response, the Agriculture Department expanded the stimulus program to new sectors — including growers of tobacco, winegrapes and certain wheat varieties — that weren’t included in the first round of aid.

— House Ag Chairman Collin Peterson (D-Minn.) said there are “some good things” in the new program, but he still wanted USDA to deliver aid to ethanol producers, contract growers, certain textile mills and livestock farmers that were forced to euthanize animals when slaughterhouses shut down.

ON THE CAMPAIGN TRAIL, President Donald Trump continues touting the coronavirus relief and trade bailout payments as proof of his commitment to farmers and ranchers, who are some of his most loyal voters.

— “Any farmers in this group? Because you’ve got to love Trump. I gave you $28 billion dollars,” Trump said at a rally last week in Mosinee, Wis. “Did everybody get that money? You had a very good year. The farmers have had a very good year.”

Democratic nominee Joe Biden has tried to blunt Trump’s appeal to agriculture by highlighting the financial fallout from his tariff fight with China. For example, a Biden campaign ad earlier this year features an Iowa farmer blasting Trump’s trade bailout as an effort to “screw you over and pay you off with somebody else’s money.”

MEANWHILE ON CAPITOL HILL, debate over the farm rescue payments is spilling over into high-stakes negotiations over a stopgap spending bill to avert a government shutdown next week, a potential snag that we flagged for readers earlier this month.

ICYMI, the White House asked Congress to ensure that USDA has enough spending authority to keep farm payments flowing when the new fiscal year begins Oct. 1. But Democrats aren’t eager to give Trump a “blank check to spread political favors,” especially when he keeps dangling the money in front of farmers at campaign rallies, as one Democratic aide told POLITICO’s Caitlin Emma and John Bresnahan.

The farm aid standoff, which also tangled up September spending talks last year, forced congressional leaders to miss their own deadline to release a continuing resolution on Friday. (They’re now aiming to publish the measure today.) Before the delay, there appeared to be a deal to include the White House request along with an extra $2 billion to help families with school-age children afford groceries.

Bottom line: As farm payments have blown past historic records, political debate over the aid programs has bubbled up into a hot-button topic on the campaign trail and in closed-door congressional negotiations. Those debates are now coming to a head, with nine days until the next shutdown deadline and just 43 days until the Nov. 3 elections, when several farm states will play an outsize role in picking the next president.

HAPPY MONDAY, SEPT. 21! We’re back with your weekly look-ahead. And speaking of looking ahead, your host looks forward to writing about Martian farms one day. Send tips to rmccrimmon@politico.com and @ryanmccrimmon, and follow us @Morning_Ag.

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