Trump administration announces $16 billion in trade aid payments

Sonny Perdue in front of an American flag


Sonny Perdue in front of an American flag


It's an increase of $4 billion. And it didn't require Congressional approval.

The United States Department of Agriculture (USDA) on Thursday announced details of a second round of farm bailout payments for farmers affected by increased tariffs in the ongoing trade dispute between the U.S. and China. They will total $16 billion, up about $4 billion from last year’s allotment. The department has allocated $14.5 billion in direct payments to producers, $1.4 billion in food purchases, and $100 million for agricultural trade promotion.

Unlike last year’s direct payments to producers, which were announced after farmers had finished planting for the season, the $14.5 billion will not be paid out on a commodity-by-commodity basis. Instead, the agency plans to calculate trade damage for crops like corn and soy at the county level, then provide each county with one flat payment to redistribute among producers. The payments will be based on acres planted, so farmers who are prevented from planting some of their crop because of flooding and other adverse weather will be compensated only for what they manage to get into the ground. Growers of specialty crops like cranberries will be compensated at a fixed level, as will meat and dairy producers.

The direct payments will be divided into three parts. The first will be paid in July or August, the second in late fall, and the third in the winter. If the administration reaches a trade agreement with China before the second and third payments are distributed, those payments will be cancelled.

The Trump administration has now promised $26 billion to farmers through its bailout program.
Officials offered scant details on how the direct payments will be calculated. They said they’d base them on a “longer-term analysis” of tariff-related losses that includes the E.U. and Turkey as well as China, but did not specify how far back they’d be looking. The USDA press office did not clarify by press time whether payment limitations or income caps for producers will apply this year. The last round of bailout payments was capped at $125,000 and limited to farms with a gross income of $900,000 or less.

The new plan contradicts reporting from earlier this week that indicated the $14.5 billion in direct payments would be distributed based on commodities grown. Bloomberg reported the administration was considering providing $2 per bushel to growers of soybeans, 63 cents per bushel to wheat growers, and 4 cents per bushel to corn growers. This would have represented an across-the-board increase from last year’s payments, though commodity groups have argued that soybean growers were compensated disproportionately for tariff-related losses.

That reporting prompted a rare rebuke from the USDA press office on Thursday, amid concerns that farmers would adjust their planting based on anticipated aid. “Details on the new farming support program will be forthcoming shortly, but we want to be clear that the program is being designed to avoid skewing planting decisions one way or another,” an official wrote.

The Trump administration has now promised a total of $28 billion to farmers through its bailout program, all without approval or input from Congress.

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H. Claire Brown is a senior staff writer for The Counter. Her work has also appeared in The Atlantic, The Guardian, and The Intercept and has won awards from the Society for Advancing Business Editing and Writing, the New York Press Club, the Newswomen's Club of New York, and others. A North Carolina native, she now lives in Brooklyn.