USDA creates unusual new channel to get pandemic stimulus money into tobacco farmers' pockets

"U.S. 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," P.J. Huffstutter and Tom Polansek report for Reuters: "The U.S. Department of Agriculture 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 new account had not previously been reported, but a USDA official told Reuters that "the agency opened the new account because of how Congress apportioned money from the CARES Act passed in March. and to simplify the process of paying farmers," Huffstutter and Polansek report. "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."

Most federal crop subsidies are paid through the Commodity Credit Corp., a federal agency, but the 2004 tobacco buyout barred tobacco farmers from receiving CCC funds, Huffstutter and Polansek report. Instead, Congress specifically allocated the non-CCC aid to the USDA secretary's office. The USDA representative said Congress would have specifically excluded tobacco farmers from receiving funding if it didn't want them to receive any money.

However, "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," Huffstutter and Polansek report. "The reality is that Congress would have to explicitly authorize paying tobacco farmers," said former Obama administration official Jonathan Coppess, currently the director of the Gardner Agriculture Policy Program at the University of Illinois.

Tobacco growers were excluded from the first round of pandemic aid announced in April. Graham Boyd, executive vice president of the Tobacco Growers Association of North Carolina, told Reuters that tobacco farmers in his state lost about $200 million in potential sales to China because of export shutdowns during the pandemic.

The new payments would benefit farmers in swing-state North Carolina, the nation's top tobacco producer, where President Trump and Democratic challenger Joe Biden are neck and neck in the polls. However, the USDA representative told Reuters there was nothing improper about the account.