In first year of trade bailout to farmers, Minnesotans were the No. 3 recipients

The numbers are in: Minnesota farmers received $681 million from the government last year to help them weather the trade war with China.

The money, promised by President Donald Trump after China slapped retaliatory tariffs on U.S. farm products in response to his restrictions on Chinese steel, was aimed mostly at soybean farmers.

Ten states, all in the Midwest, received three-quarters of the $8.6 billion payout in what was officially called the Market Facilitation Program. Minnesota farmers received the third-most aid, behind only those in Illinois and Iowa.

The data show that big farms in Minnesota, many of them experienced in securing federal subsidies, were able to find legal ways around limits that capped payments to each farmer at $125,000. U.S. Sen. Chuck Grassley, a Republican in Iowa where farmers received nearly $1 billion in aid, blasted the program and the farmers who found loopholes in it.

"Some of the nation's largest farms are receiving unlimited government subsidies through underhanded legal tricks," he said in a statement to the Star Tribune. "They're getting richer off the backs of taxpayers while young and beginning farmers are priced out of the profession. This needs to end. The Department of Agriculture needs to re-evaluate its rules for awarding federal funds and conduct more thorough oversight of where it's funneling taxpayer dollars."

More than 2,700 farms across the country and over 130 farms in Minnesota collected more than the $125,000 cap. Some 172 farms across the country, and nine in Minnesota, collected more than $400,000.

The largest payment in Minnesota was $789,772 to Hader Farms Partnership near Zumbrota. The partnership has proved to be deft at securing government subsidies even in normal times. According to the Environmental Working Group's database of farm subsidies, Hader Farms received $7.6 million in subsidy payments from 1995 to 2017.

A request to interview one of the farm's owners was declined.

In the trade war-related bailout, Oberg Grain, a farm near Moorhead, received $625,000; Molitor Brothers Farm, near Cannon Falls, received $595,134; and Evan and Brett Peterson Farms, near Balaton, Minn., received $500,000. None of those farms responded to requests for an interview.

The vast majority of farmers in Minnesota received aid well under the $125,000 cap. Tim Velde, who raises corn and soybeans near Hanley Falls, collected $30,254 for his soybean harvest and said it "helped like everything" because he's a small farmer.

"It probably was less than half of what I actually lost because of the tariffs, but at this point anything helps," he said.

A U.S. Department of Agriculture (USDA) spokeswoman said the rules for the Market Facilitation Program ensured that "no individual" could receive a payment for more than $125,000 for row crops, but farmers could receive a second payment if they raise dairy cows or hogs, or even a third payment if they also raise almonds or cherries.

Also, "operations may receive more than $125,000, but each dollar must be attributed to an actual person that meets our eligibility criteria, including being actively engaged in farming and management of the operation," the spokeswoman said in a statement.

Velde said he doesn't mind larger farms getting larger payments when the farm is operated full-time by several members of a family. "You're looking at three and four or five families that are involved with the farm. That personally doesn't bother me," he said.

What he does object to is the "family investment farm" where it's really only one farmer who games the program with dubious claims that investors or family members are helping manage the farm. Velde said the claim is easy to make. All somebody must do is check a box on a form at the local Farm Service Agency office, and then, if questioned, say they helped decide which crop to grow that year to prove they're involved in the farm's management.

"It's really loose," Velde said.

Minnesota farmers had a brutal year in 2018, with median income falling by 8% to $26,055. Dairy farmers are in a long-term crisis and corn and soybean prices had been slumping for years, but the trade war with China took a specific toll on soybean prices. Minnesotans, who mostly grow their crop for export to China, were hit harder than soybean farmers in other parts of the country.

The USDA rolled out the Market Facilitation Program in phases, but soybean growers were always going to be the main recipients, and ultimately they received $1.65 per bushel for the soybeans they harvested in 2018. Ninety cents of every dollar of aid in Minnesota went to soybean farmers.

Gary Wertish, president of the Minnesota Farmers Union, said that while farmers appreciated the help from the federal government, the program was put together hastily ahead of midterm elections.

"We have to be honest, if there hadn't been an election coming up in the fall of 2018, we more than likely would not have seen that type of payment," he said.

The assistance to corn farmers — a penny per bushel harvested — was not enough to make a difference, and tying soybean payments to bushels harvested ended up most helping the farmers who needed it least. Farmers whose yields were down thanks to the wet spring in 2018 received less aid.

"The ones that really needed the help, the ones that had a short crop, didn't get as much as the ones that had a bumper crop," Wertish said.

And Wertish shares Grassley's concerns about larger farms getting hundreds of thousands of dollars in aid from the program. He's hoping the USDA finds a way to make the $125,000 limit apply more consistently when it rolls out the rules for the Market Facilitation Program in 2019.

"Maybe the payments per bushel could then be a little higher and spread it around more and help the smaller and younger farmers who are really struggling," he said.

It's also possible the next round of the program will tie aid to acres planted rather than bushels harvested, Wertish said. The details have not been announced.