How stimulus money will go to tobacco farmers' pockets
US government aid payments to tobacco farmers will be channeled through a new account within the office of the agriculture secretary, an unusual move that bypasses the normal mechanism for distributing farm aid and stokes concerns about how the government is using COVID-19 stimulus.
The U.S. Department of Agriculture (USDA) on Friday said it will pay up to $100 million to tobacco farmers from Congress' coronavirus economic stimulus package, as part of a $14 billion assistance program for farmers hurt by the pandemic.
The payments would benefit farmers in North Carolina, a swing state in the Nov. 3 presidential election and the country's top tobacco producer. President Donald Trump and Democratic presidential candidate Joe Biden are locked in a dead heat among likely voters in North Carolina, according to a Reuters/Ipsos opinion poll released on Tuesday. The existence of the new USDA account has not been previously reported. In response to questions from Reuters this week, USDA said there was nothing wrong with the new account - which it originally set up this spring - and said it has taken steps to track the flow of funds.
The agency opened the new account because of how Congress apportioned money from the Coronavirus Aid, Relief, and
Economic Security (CARES) Act passed in March and to simplify the process of paying farmers, a USDA representative said.
Lawmakers typically apportion emergency funds to an agency and existing accounts set up at the division that would handle a program, according to agricultural and government analysts. Groups including the American Lung Association and Campaign for Tobacco-Free Kids were dismayed that aid meant for Americans struggling with fallout from a deadly lung disease was earmarked for tobacco.
Most U.S. crop subsidies are paid via the 1930s-era Commodity Credit Corporation (CCC), which gives USDA broad authority to make direct payments to growers when crop prices are low.
However, a 2004 law known as the tobacco buyout blocked tobacco growers from receiving CCC funds. The USDA says the tobacco money will not come from CCC.
Instead, the agency said in response to questions from Reuters that the $2.3 trillion CARES Act gave it the authority - and a different pool of taxpayer dollars - to issue the tobacco aid. In a statement to Reuters, USDA said that if Congress wanted to block tobacco farmers from this money, it would have specifically excluded them in the law. Some economic and legal experts said the 2004 law eliminated the government's role in funding tobacco price supports and worry the Trump administration is not being transparent. "The reality is that Congress would have to explicitly authorize paying tobacco farmers," said Jonathan Coppess, director of the Gardner Agriculture Policy Program at the University of Illinois, and a former Obama administration official.
Tobacco was not included in the first round of coronavirus aid for farmers announced in April. Lawmakers subsequently spoke with USDA about crops left out of the $19 billion program, such as cherries, olives and raisins, according to USDA, and legislative and industry sources. Lawmakers and staff from tobaccoproducing states including North Carolina and Kentucky provided feedback, legislative sources said.