U.S. China agricultural trade and the bailout boondoggle

Late last fall, Choices Magazine from the Agricultural and Applied Economics Association (AAEA) had a special issue on U.S. - China trade, highlighting the enormous value of China trade for U.S. farmers.

Introducing the special issue, which received an award at this week's AAEA annual meeting in Atlanta, Mary Marchant and Holly Wang wrote:

The United States and China, the world’s largest economic powers, have dueled in an escalating trade dispute since January 2018.... This trade dispute is important to U.S. agriculture, because China has been the United States’ top agricultural export market outside of North America since 2009 with an annual sale of nearly $20 billion in 2017 (USDA, 2018b).... Although the current trade dispute continues to evolve, it is valuable for us to understand the potential negative impact and to be informed of possible consequences. It is our sincere hope that U.S. and Chinese negotiators will reach an agreement, since both countries ultimately lose with a trade war, as seen from the 1930s Smoot–Hawley Tariff.

The Trump administration has sought to offset some of the harm to farmers with bailout funding to selected producers. Using data received under the Freedom of Information Act (FOIA) law, the Environmental Working Group last month reported that many payments exceeded a planned $125k limit. Some subsidy recipients received more than $900k.

For Iowa farmers, the Des Moines Register today has a fascinating report with clever searchable web tools, allowing detailed breakdowns.

How can U.S. agricultural policy remain so absurdly dysfunctional even while being exposed to this level of public transparency?