The Trump administration will begin paying $14.5 billion to farmers hurt by the US-China trade war by the end of August.
It’s the second round of aid the administration will pay out as negotiations with Beijing continue past the one-year mark. Farmers received about $10 billion in aid last year.
The trade situation has “persisted longer than we expected,” said Rob Johannson, chief economist at the Department of Agriculture, on a call with reporters.
American farmers have been some of the hardest hit by China’s retaliatory tariffs, which were put on a range of commodities including soybeans, corn and wheat. The tariffs made those American agricultural products more expensive for Chinese importers, and private buyers nearly stopped purchasing US-grown soybeans – leaving a record amount sitting in storage at the end of 2018.
Agriculture Secretary Sonny Perdue first announced that there would be a second round of aid payments in May, after trade talks unraveled and President Donald Trump abruptly escalated tariffs on $200 billion of Chinese goods. Some farmers, who have long stood behind the President in his mission to get a better deal with Beijing, have started to grow impatient.
The Department of Agriculture released new details Thursday about how the payments will be calculated. Farmers can begin applying for aid on Monday, and can expect to receive a payment in mid- to late-August.
The new round is based on how many acres a farmer has planted and the rate will vary by county. A minimum of $15 per acre will be paid.
The payments will be split into three rounds. The last two will be paid in the fall and winter – but could be canceled if trade tensions are resolved beforehand. The maximum a farmer can receive is $500,000. Those who earn more than about $900,000 a year aren’t eligible.
“I think the bottom-line takeaway is we are appreciative of this, but farmers have borne a significant price in this trade war,” Brian Duncan, vice president of the Illinois Farm Bureau, told CNN.
“No matter what the payments are here, they are not going to make up for the generational damage that’s being done. Once trade routes get changed, they don’t change back – that’s the real rub here,” Duncan added.
On the call with reporters, Perdue said that the aid payments aren’t designed to make farmers whole.
“This is really an attempt to recognize farmers have borne a disproportionate share of the trade disruption and these funds are there to support them and enable them to continue farming, he said.
In a statement to CNN, American Farm Bureau Federation president Zippy Duvall said, “While we are grateful for the continuing support for American agriculture from President Trump and Secretary Perdue, America’s farmers ultimately want trade more than aid. It is critically important to restore agricultural markets and mutually beneficial relationships with our trading partners around the world.”
In June, Trump said trade talks with China had been revived after he met with President Xi Jinping and that Beijing agreed to start buying US agricultural products as talks continue. But two weeks later, Trump complained that China had yet to start making any purchases.
When asked about those purchases on the call, Perdue suggested that they had started.
“We’re seeing rumors and I think we’re seeing possibly some sorghum purchases and soybean purchases,” he said.
Perdue said farmers should not expect to see another aid package in 2020.
In addition to the tariffs, farmers have been facing a cold and wet spring that has made planting difficult. They were also hit with tariffs from Canada and Mexico because of Trump’s steel and aluminum tariffs. Those have been lifted, but farmers are still waiting to see whether the administration’s replacement for the North American Free Trade Agreement will be approved by Congress.
“We need more certainty,” said Phil Ramsey, who grows wheat, corn, and soy in Indiana.
“They (the administration) are just trying to get money in our hands. This season has been so difficult. We’re all having the same conditions with the uncertainty that mother nature has given us, and this is the quickest way to get money into our hands fairly,” he said.
The administration will also be buying some surplus commodities affected by the trade war and distributing the food to food banks and schools, as well as making payments to organizations that help promote agricultural trade. All together, the second aid package — including the $14.5 billion slated directly for farmers – totals $16 billion.