Friday, May 24, 2019

Trump announces $16 billion trade-aid package for farmers

President Trump announced yesterday a $16 billion aid package aimed at helping farmers hurt by his trade war with China. "Agriculture Secretary Sonny Perdue said $14.5 billion of the $16 billion would be paid out directly to producers, who have been hit hard by Trump’s tariff showdowns with China, Mexico and other countries," The Washington Post reports.

The first payments to farmers will come in July or August. In addition to the $14.5 billion paid to producers of row crops, fruits, vegetables, nuts, pork and dairy, Perdue said the government will spend $1.4 billion to buy and donate crops to food banks and schools, and will award $100 million in grants to develop new markets overseas, Chuck Abbott reports for Successful Farming.

"The three-prong structure is similar in design and name to the 2018 Trump bailout payments that were supposed to be a one-time boost. That package has paid $10 billion, mostly in cash to producers," Abbott reports. "The new package covers three dozen commodities compared with the nine earmarked for aid in 2018. For this year, the USDA says it will calculate trade war damage per county and divide the money among farmers based on how many acres of the eligible crops are planted this year. The USDA will announce the payment rates later."

"The relief plan aims to avoid problems that arose in the first aid package, when soybeans received what many believed was a disproportionate amount of the money, while corn received only a penny a bushel. Other producers were shut out entirely from relief payments," the Post reports.

The payment rate will be the same for all farmers regardless of what they plant. However, they will have to plant to receive it, Abbott reports. Midwestern farmers are anxious on that account since flooding has delayed planting, and some may not be able to plant at all this year. Farm groups have urged the USDA to base payments on historical production so the current weather won't hurt this year's trade aid payout. Last year, rates were based partly on the average yield of a crop in a county.

American farmers have been struggling for years with falling income and commodity prices. That left many with few financial reserves to cope with the trade war; an American Farm Bureau Federation data analysis shows that Chapter 12 farm bankruptcies rose from March 2017 to March 2018, especially in the Midwest, the Post reports.

"Randy Spronk, a hog farmer and past president of the National Pork Producers Council who attended the president’s Thursday meeting with farmers, said farmers realized the potential payouts will not make up for the losses due to a protracted trade war with China," the Post reports.

"Will it cover the losses? No. But it makes enough of a difference to keep a lot of farmers so they can survive," Spronk told the Post. Trump said the money will come from "the billions of dollars the Treasury takes in" from China, but the Post notes that "China does not pay tariffs imposed by the United States on Chinese imports. Importers pay those tariffs, and some of them pass on the cost to U.S. consumers."

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