Farmers need lower fuel costs, not another emergency check

Opinion

By Dashiell Crane

Leave Us Alone

Washington has found a new way to make farmers pay for its foreign policy: send them a check afterward and call it relief.

On Oct. 19, President Trump and Agriculture Secretary Brooke Rollins announced the $8 billion Harvest Fuel Relief program, one-time payments meant to cover part of what farmers have lost to high diesel and input costs this harvest. Diesel averaged $6.32 a gallon last week, up 74% from a year ago, according to AAA. Nobody disputes that farmers are hurting. The question is whether another round of federal checks is the cure, or just the latest dose of the disease.

Start with where the pain comes from. Farm and Dairy reported that diesel peaked above $6.50 in mid-September as disruptions tied to the U.S.-Iran conflict and Russia’s war in Ukraine drove prices up. The U.S. actually produces more diesel than it consumes, CBS News noted, but oil is priced on a global market, and that market is reacting to a war Washington chose to fight. Rep. Angie Craig, the top Democrat on the House Agriculture Committee, put it bluntly: the fastest relief would be to “end his war with Iran.” I don’t agree with Craig on much, but a non-interventionist can recognize a true sentence when a Democrat says one.

The check is not the cure

Then look at how the money moves. The payments are financed through the Commodity Credit Corporation, USDA’s line of credit at the Treasury, not through a fresh appropriation that Congress debated and voted on. That is a lot of money to move on executive say-so a few weeks before an election, and the president announced the program at a midterm campaign speech in Kansas. Whatever you think of the policy, spending this size ought to go through the people’s representatives.

It is also not the first time this year. The same release notes that the earlier Farmer Bridge Assistance program sent $12 billion to more than 560,000 farmers, and that about $14 billion more just went out through commodity programs. The National Farmers Union, hardly a libertarian outfit, called this “the second round of emergency aid this year to address losses that were largely foreseeable.” When emergency aid becomes a seasonal event, it isn’t an emergency anymore. It’s a program, and every program builds a constituency that will demand the next one.

And look at who gets the most. USDA says the payments follow a uniform formula based on planted acres, cost-of-production estimates and projected yields and prices. Pay by the acre and the biggest operations collect the biggest checks, while the specialty growers and fishermen the department is still asking to email in their fuel data wait to find out whether they count. Central planners always promise precision. What they deliver is a formula.

Industrial policy at the pump

The fuel side of the plan has the same problem. The administration is using the Defense Production Act to spend $150 million to boost gasoline and diesel production. Patrick De Haan of GasBuddy told CBS, “I don’t think that’s really going to have any impact.” Tom Kloza of Gulf Oil said, “There is no slack in U.S. refining, so production can’t be added regardless of political will.” A Korean War emergency law is a strange tool for picking which refinery projects get taxpayer help, and the experts doubt it will move prices.

To be fair to the administration, part of its response gets it exactly right. Earlier this month, the president deferred the 24.4-cent federal excise tax on diesel and let untaxed off-road diesel be used on highways. That is relief that works by taking less instead of handing more back. It reaches truckers, farmers and every business that runs on diesel, without an application, a Login.gov account or a payment formula. The White House says its energy moves mean “gas and diesel prices will soon drop rapidly.” If it believes that, the tax holiday is the piece to build on.

What would actually help

The case for the checks is real: Sen. John Hoeven, R-N.D., says producers are getting “meaningful assistance to help them cover their increased input costs during harvest,” and a farmer staring at a fuel bill in October cannot wait for grand theories. Fine. But Congress should treat this as the last ad hoc bailout, not the template.

Make the diesel tax deferral last at least through the spring planting season and let Congress vote on it. Put any further farm aid through regular appropriations, in daylight. Let the Defense Production Act money go back to the Treasury. And most of all, stop the policies that keep driving costs up, from trade fights with our closest partners to a war overseas whose bill keeps arriving at the pump.

Farmers asked for lower costs. Washington offered them a check. Those are not the same thing, and the difference is the whole problem.

Dashiell Crane is the pen name of a Washington Inquisitor opinion columnist writing from a libertarian perspective. The views expressed are the author’s own and not those of The Washington Inquisitor.