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Trump's trade war payments to farmers needed more oversight, watchdog says

The payments were designed to mitigate the effects of former President Donald Trump's trade war with China.

Editor’s Note (May 2, 2022, 11:26 a.m. ET): NBC News has determined that a section about the overestimation of trade damages in an earlier version of this article was not properly attributed to its original source and did not meet our standards for original material. The section has been removed from the article.

WASHINGTON — The Trump administration's aid program for farmers hurt by the president's trade war with China should have received stricter oversight to ensure accurate payments, a government watchdog said Thursday.

The Market Facilitation Program, launched by the Department of Agriculture's Farm Service Agency, made payments in 2018 and 2019 totaling $23 billion, the nonpartisan Government Accountability Office said in its report. But historically underserved farmers, such as socially disadvantaged groups and military veterans, received less than 4 percent of the overall aid payments.

"We reviewed this program and found that FSA could have done better at ensuring these payments were accurate. For example, during its spot check on 2018 program payments, FSA should have paid special attention to risk factors including first-time recipients or farms that received program payments of over $250,000," the GAO wrote.

Roughly 1 percent of payments went to high-income farms and farmers with an adjusted gross income over $900,000 per year.

Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., requested the GAO report in February of 2020, according to a statement from her office.

"President Trump’s trade wars affected every corner of our agricultural sector – and unfortunately USDA’s response fell short," said Stabenow, whose office also pointed to earlier reports from the GAO that found payments during the Trump administration favored certain farmers.

The FSA, which was tasked with issuing the payments, was limited in its reliability for the 2018 payment review, the GAO said Thursday.

FSA "did not direct the agency to ensure results were reliable using sound statistical methodologies; take a more complete risk-based approach, as used for other FSA programs; or communicate results and identify corrective actions," the report said.

In addition, FSA stopped its 2019 aid program compliance review because of competing agency priorities, including implementation of another supplemental assistance program, the report added.

The GAO issued several recommendations to the agency, including more reliable data collection and for the agency to be more transparent when communicating future reviews of aid programs.

"FSA agrees with the findings, but with the recognition of conflicting program priorities and limited resources devoted to developing and delivering pandemic assistance to producers who faced market disruptions due to COVID-19," said FSA administrator Zach Ducheneaux in a letter responding to the GAO's recommendations.

Enrollment for the Trump-era program ended in December of 2019.

In March of 2020 Congress authorized a multibillion-dollar bailout for farms suffering losses because of the coronavirus pandemic and left the farm agency to work out how the money would be spent. It allotted $16 billion in payments to farmers and ranchers and $3 billion in purchases of fresh produce, dairy products and meat to be distributed at food banks.

At one point during the pandemic, many U.S. farmers had to destroy their crops, dump milk and throw out perishable items that couldn't be stored.

The Biden administration has been in a holding pattern with its trade policy toward China, and officials have yet to outline how they intend to tackle many of the disputes leftover from the Trump administration.