Letter to the President - Baldwin Demands Answers After Independent Gao Report Confirms Trump Administration Mismanaged Payments to Farmers for Trade Damages

Letter

Dear Mr. President and Secretary Perdue:

Wisconsin has lost 2,278 dairy farms since you took office, and 773 farms in 2019 alonei
. That's
nearly 25 percent of Wisconsin dairies that couldn't make it in the face of trade wars, market
instability, and uncertainty about the future of their industry. In those and other communities,
hardwood mills and loggers are laying off workers and closing up shop. The contours of our rural
communities and the viability of rural economies are changing rapidly, along with the landscape.
And yet in the face of these severe challenges, a recent Government Accountability Office report
has shown that USDA resources have gone disproportionately to large farms in other parts of the
country. Our rural communities are being left behind in this economy, and for Wisconsin's family
farmers and hardwood businesses, it's getting no better fast. I am calling on you to shift course, so
that rural Wisconsinites have an economic playing field where they can compete and thrive.
Wisconsin farmers, hardwood businesses and our agriculture industry faced enormous losses from
the trade wars. In 2019, dairy product exports decreased nearly 16 percent and wood products were
down almost 13 percent. Wisconsin agricultural exports to our top ten export markets fell more
than 41 percent; exports to China fell 28 percent, and exports to Mexico fell nearly 14 percent.
ii

These are critical markets that took decades to build, and competitors in other countries are using
this opportunity to take over the market share that U.S. farmers and rural businesses built. The
recent losses have exacerbated years of low prices that drained farmers' savings and severely
destabilized the markets farmers were relying on to make it through tough times. I urged your
administration to provide trade aid to support them, and you did. However, I also requested that
you provide aid to the hardwood industry, but the aid package left out these businesses despite the
fact that they sustained $615 million in lost exports--and a 43 percent loss of Chinese markets--in
the first year of the trade wars alone.
iii
Now, a report from the independent Government Accountability Office finds that the 2019 Market
Facilitation Program has disproportionately given trade aid to southern states, and Wisconsin family
farmers and hardwood businesses have been left behind.
iv The 2019 payments went to 870,400
farmers across the country, for an average of $16,500 per farmer. In Wisconsin, 29,409 farmers
received aid, at an average of $11,800. The highest average payments went to Georgia, where
7,306 farmers received an average of $42,500. Despite the higher payment rates to Georgia,
Wisconsin's agriculture sector contributes 26 percent more economic output to the US economy.
v

Changes made for the second round of payments could have provided greater equity, but instead,
the USDA raised payment limits and carved out $519 million in additional funding for larger farms
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that primarily went to southern states. These payments went to 11,589 farmers, but of those, only 68
Wisconsin farmers benefited, amounting to less than half of one percent of the funds--a total of
$2.1 million. Simply put, Wisconsin farmers received far less aid than their southern counterparts.
That's a slap in the face to our hardworking farmers who are facing so many challenges.
President Trump came to Wisconsin and said our farmers are "over the hump," but they're not.
Now the Trump administration is turning its back on Wisconsin farmers and hardwood businesses
and investing aid in southern states instead. That's unacceptable.
Wisconsin has a strong dairy industry because generations ago, our rural entrepreneurs saw dairying
as an opportunity for a good quality of life and a way to increase agriculture income by processing
milk. Now, our dairy farm families are at a crossroads, no doubt. But together, we can build a
brighter future for a diverse and thriving dairy industry, rather than waiting until trade wars and
pricing volatility bankrupt farmers and their communities.
There are actions that we can take together in a bipartisan way to reverse the terrible trends of farm
loss and mill closures. The agriculture payments being made right now are a bandage on a gaping
wound, and while they are keeping many farmers afloat, those farmers tell me they would far prefer
to make a living in a fair marketplace. We would respect their hard work and be money ahead by
spending future investments on promising economic opportunities for farmers and rural businesses.
My Farming Support to States Act and the Dairy Business Innovation Initiatives established in the
2018 Farm Bill are two key strategies that would ensure that the investments we are making now
are building a stronger future for rural America, not just waiting out a trade war that's holding our
farmers and hardwoods industry hostage.
I stand ready to work with you towards lasting economic progress in our rural communities and
small towns, but unless we update the national response to this crisis, it will be too little, too late.

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