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Missouri, Kansas farmers, GOP official rely on federal money

Sixth-generation Kansas farmer Charles Atkinson said the millions of dollars in trade aid the federal government has funneled to local farmers doesn’t fully make up for what growers have lost in recent years.

“But it will help,” he said, noting that many farmers are struggling to turn a profit. “I’m not going to say they (government payments) were the savior, but with margins as thin as they are we could have a lot of farms out of business.”

The bailouts were designed to help farmers who were already weathering low prices on commodities such as soybeans before President Donald Trump’s trade wars sunk prices even lower. The administration has so far mailed checks totaling about $8.6 billion to U.S. farmers to help make up for lower market prices of 2018 crops.

Many farmers originally supported the administration’s trade posture, but their patience is wearing thin, said Atkinson, a member of the American Soybean Association’s board of directors. He received payments worth $18,557 for last year’s soybean, corn and wheat crops.

“We know negotiations are happening with China and getting closer,” he said. “I wouldn’t say there’s a light at the end of the tunnel, but it’s getting closer.”

But what was billed as a short-term sacrifice that would deliver long-term gain shows no signs of letting up: Just last week, Trump threatened a 10 percent tariff on $300 billion worth of Chinese goods, which would take effect in September, as trade negotiations continue to stall.

In the meantime, the government continues issuing checks — sparking outrage from free-market think tanks that have equated the move with socialism and criticized it for ballooning the national debt, The Kansas City Star reported.

Bailout payments from the Market Facilitation Program over the last two years have totaled $444 million for farms based in Missouri and $539 million for those in Kansas — a collective haul of about $982 million, according to data obtained by the Associated Press and analyzed by The Kansas City Star.

Those who signed up for the voluntary program included Republican Rep. Vicky Hartzler’s family farm in Harrisonville, Missouri. Hartzler Farms Inc., a business the congresswoman owns with her husband, received a total of $108,916 for 2018 losses on wheat, soybeans and corn — nearly 14 times the average payout to Missouri farmers of $7,915.

Steve Walsh, Hartzler’s spokesman, said the congresswoman and her husband have the same challenges as other farmers in the region.

“Like many farmers in the state, the Hartzler’s have been negatively impacted by the recent severe weather, rising input costs along with lower commodity prices, and current market uncertainty,” Walsh said in a statement.

Walsh noted that the Market Facilitation Program provides a partial offset for the financial losses farmers “continue to suffer from damages because of unjustified trade retaliation from China and other foreign nations.” Hartzler consistently supports the president’s policies.

Hartzler’s 2018 financial disclosure form filed with the U.S. House estimates the farm’s value between $1 million and $5 million and states that Hartzler’s annual income from the farm is between $15,000 and $50,000.

On top of the bailout money, Hartzler’s farm has a long history of benefiting from federal commodity subsidies, taking in nearly $1 million in total between 1995 and 2016.

The decision to pursue tariffs on Chinese goods has caused prices to plummet as China hit soybeans and other U.S. commodities with retaliatory tariffs. Hartzler, a member of the House agriculture committee, said last year she hoped the trade aggressions would be “a temporary situation to get some concessions of China for some of their clear abuses in other areas.”

But in the meantime, soybean farmers continue to feel the brunt of the trade war. The crop was selling for $8.49 per bushel on Friday. It traded at nearly double that price in 2012.

The administration is poised to hand out even more cash: federal officials recently unveiled details of a $16 billion trade aid package, which includes nearly $15 billion more in direct payments to farmers.

During the first eight months of the bailout program, the federal government paid out $8.55 billion to 577,713 farmers. More than 80 percent of the funds went to soybean farmers, the AP found, though funds were available for growers of nine commodities the USDA identified as tariff-affected.

The data show many farms received multiple payments. Payout amounts for Missouri farms ranged from one buck to more than $700,000 with a median amount of about $904. Those who run Kansas farms received nearly twice as many bailout checks: they ranged from $1 to more than $468,000 with a median payout of $744.

A Missouri-based company cashed in the most from the program. The DeLine Farms Partnership and two similar companies registered at the same address in Charleston, Missouri, collected nearly $2.8 million combined, the AP reported. While registered in Missouri, the physical farm sits south of the border in Arkansas.

A lawyer representing the group did not respond to The Star’s request for comment.

In the five counties that make up the Kansas City area — Jackson, Clay and Platte in Missouri, along with Wyandotte and Johnson in Kansas — farms brought in combined checks of more than $10 million.

In Missouri, farms in New Madrid County in the Bootheel brought in the most bailout money with more than $21 million. In Kansas, Sumner County, south of Wichita, received the most with about $13.6 million.

The Star’s review found other public officials signing onto the program.

Kevin Chinn, the husband of Missouri’s Director of Agriculture Chris Chinn, raked in a combined $135,858 to help recover from corn, soybean and pork losses.

Chris Chinn’s office did not respond to requests for comment.

Rep. Sam Graves, R-Missouri, a farmer from Tarkio, didn’t participate in the program, according to his office.

“Rep. Graves hasn’t received a farm payment in almost 20 years and isn’t part of the program so he wouldn’t be eligible anyway,” said Bryan Nichols, Graves’ spokesman.

Graves stopped accepting farm subsidies after taking office in 2001.

However, both Graves’ father, Samuel B. Graves, and son, Samuel B. Graves III, did receive payments for the 2018 crop. The congressman’s father received $23,146 for losses on soybean and corn, while his son took in $21,582.

The administration has changed its bailout formula for the 2019 crop, moving away from a formula based on the number of bushels harvested toward one that pays per acre of planted crop. That, along with increased funding for the bailout program this year, may increase future checks.

Blake Hurst, president of the Missouri Farm Bureau, said it’s hard to tell when things may turn around for the industry.

“This is just not a good situation,” he said. “The administration would argue it’s short-term pain for a longer-term gain. And we shall see. But we’re two years in and it’s hard to see what gain we’ve had so far.”

Hurst received $21,950 in soybean trade assistance for his Tarkio family farm. He said farmers have largely cheered the president’s tough stance toward China, but not his aggression toward North American trading partners.

“I think most farmers make a distinction between China and these other trade disputes,” he said, “and have a great deal more patience trying to fix things with China and wonder why in the hell were picking fights with Canada or Mexico.”

A study from the University of Missouri’s Food and Agricultural Policy Research Institute concluded that some farmers may be over compensated by the federal program. The study estimated that the market price impact on soybeans from retaliatory tariffs cost farmers about 78 cents per bushel. But the 2018 program reimbursed up to $1.65 per bushel.

“But that’s not the full story,” said Patrick Westhoff, director of the institute and a professor of agriculture and applied economics. “It’s a larger question of how do you define the loss.”

For instance, a side-by-side analysis doesn’t consider the impact depressed soybean prices have on corn prices. Likewise, it ignores the fact that an outbreak of African swine fever in China reduced demand for U.S. soybeans there.

While the bailout payments are so far targeted at compensating losses on 2018 and 2019 crops, Westhoff said farmers would likely feel the effects for years to come.

“It definitely depends on the particular producers and the particulars of their operation,” he said. “It is certainly true that these buyout payments do appear to be compensating folks for a lot of their losses, if not 100 percent of their losses in some cases.”

The agricultural economy has been sinking for several years in Missouri and across the country.

Total Missouri farm income topped $10 billion in 2017, Westhoff said. But net farm income, or profits, only reached about $1.7 billion — a figure that topped $3 billion only a few years before.

In that context, Westhoff said the $444 million in government checks mailed to Missouri farmers was significant.

“If you’re near break even,” he said, “every penny matters.”