Large farms find legal loopholes to get more trade aid - Entrepreneur Generations

The Trump administration's aid package for farmers hurt because of the trade war included payment caps, but many large farms have found legal loopholes to get around those limits. According to records provided to The Associated Press under the Freedom of Information Act, more than 3,000 trade aid recipients collected more than the $125,000 cap.

"Recipients who spoke to AP defended the payouts, saying they didn’t cover their losses from the trade war, and they were legally entitled to them. U.S. Department of Agriculture rules let farms file claims for multiple family members or other partners who meet the department’s definition of being 'actively engaged in farming,'" Steve Karnowski and Balint Szalai report for the AP. 

For example, a Missouri soybean farm received nearly $2.8 million because it was registered as three entities at the same address. About 83 percent of trade aid money has gone to soybean farmers, who have been affected most by the tariff war with China. The program sets caps in three categories: soybeans and other row crops, pork and dairy, and cherries and almonds. So farmers with products in two or three categories can collect up to $125,000 in each category. 

Moreover, Congress recently eased a rule saying a farmer's average adjusted gross income couldn't exceed $900,000. The USDA has paid out about $8.6 billion, but the new rule will bring payouts closer to the $12 billion authorized, Karnowski and Szalai report.

USDA officials said they believe the rules are being followed and said they can audit suspicious cases. "But critics including U.S. Sen. Charles Grassley, an Iowa Republican who has long fought for subsidy limits, say it’s the latest example of how loopholes in federal farm subsidy programs allow large farms to collect far more than the supposed caps on that aid," Karnowski and Szalai report.

Grassley said in a statement to the AP that huge farms are getting the payments "through underhanded legal tricks. They’re getting richer off the backs of taxpayers while young and beginning farmers are priced out of the profession. This needs to end." He called for the USDA to change its rules and increase oversight.

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