The federal government has given $25.8 million to farmers this month under a program designed to help them weather President Trump’s international trade battle, a spokesman for the Agriculture Department said Friday.
The money represents some of the first payments of what the Trump administration said will eventually be a $12 billion bailout, which aims to help farmers cope with retaliatory tariffs foreign countries have imposed on their products. Those retaliatory tariffs have dimmed demand for U.S. products overseas and resulted in a domestic supply glut that has deflated some prices at home.
From Sept. 4 through Thursday, the USDA received 39,447 applications for aid. The department has approved 7,851 applications so far, the USDA official said.
The administration has planned an initial $4.7 billion in payments for producers of commodities such as corn, cotton, dairy products, pork, sorghum, soybeans and wheat.
The program will give aid to farmers based on a formula that accounts for the “severity of the trade disruption” — essentially, an estimate of how much money the trade war is costing them — as well as the volume of their production, the USDA said in announcing the program.
Farmers can apply for the assistance only after their harvests are complete, so the money has likely gone primarily to producers of wheat, dairy and livestock, a USDA spokesman said in an email. The USDA said it could not disclose which farmers have received assistance under the program.
“Because of privacy concerns, we will not release the identity of individual recipients,” a spokesman said in an email.
Some critics said the Trump administration should disclose the names of the recipients, arguing that doing so would allow the public to see whether farmers are receiving multiple rounds of federal assistance.
“The administration should not wait to share the names of recipients, so taxpayers can see whether those farmers have already been paid by other programs," said Scott Faber, senior vice president of government affairs for the Environmental Working Group, a national environmental organization.
When Trump announced the bailout, many farm advocacy groups and a bipartisan bloc of farm-state legislators argued that farmers would more effectively be helped by an easing of trade tensions. Instead, tensions have since heightened, with the United States and China repeatedly hitting each other with a set of escalating tariffs. China said last week it would retaliate against Trump’s latest round of tariffs on roughly $200 billion in Chinese imports with similar measures against about $60 billion in U.S. products.
The Trump administration has a preliminary agreement to reach a trade deal with Mexico, but it remains at loggerheads with Canada, another major agricultural trade partner.
The direct payment program is one of several prongs of the administration’s effort to insulate farmers from the trade war.
The federal government also has authorized the USDA to buy $1.2 billion worth of food it would then give to food pantries and child nutrition assistance programs across the country. Feeding America, a nonprofit organization with more than 200 food banks in the United States, is working with federal officials on resolving some of the large logistical hurdles in getting food such as meat, produce and dairy to Americans who need it.
Federal purchases under this program will begin after Oct. 1, a USDA spokeswoman said.
“Food banks are really excited about this huge opportunity, but there are a lot of costs associated with this, and there’s a capacity issue,” said Kate Leone, Feeding America’s senior vice president of government relations. “The demand is there, but we’re trying to work through barriers to the success of the program.”
An additional $200 million has been allocated to help “develop foreign markets for U.S. agricultural products,” which could include spending on marketing in foreign countries or leading trade missions overseas. That money will go out in early 2019, according to the USDA.
Critics of the aid say it amounts to an unnecessary taxpayer subsidy designed to paper over the flaws in Trump’s tariffs, while the administration has said it offers meaningful relief for farmers caught in the crossfire of the international trade war. The program was not approved by Congress and instead relies on the 1933 program called the Commodity Credit Corp., a division of the Agriculture Department created during the Great Depression.
USDA officials stressed that the bailout program is in its early days. Soybean producers have not submitted their applications yet, according to the USDA, because their harvest season has not been completed. Soybean farmers are expected to receive the bulk of the bailout money.
The program caps maximum payments at a combined $125,000 for dairy and hog production, as well as a combined $125,000 for corn, cotton, sorghum, soybeans and wheat, according to the USDA’s website.
Opponents note that the government already has generous programs to help distressed farmers, including a subsidy for a crop insurance program that reimburses farmers for unexpected losses. To them, these payments look like a taxpayer-funded bailout designed primarily to ease criticisms among a particular political constituency ahead of the 2018 midterm elections — while others have questioned whether soybean farmers really need the relief.
“It’s like socialism cubed and for people who overwhelmingly vote Republican,” said Faber, of the Environmental Working Group.
But Chad Ingels, a farmer in northeast Iowa, said he quickly received a check for $1,084 for his inventory of just under 300 hogs that have remained on his farm instead of being sold on the market. Ingels would normally sell each hog for $150, but a fall in hog prices has reduced that amount to $100.
“It was really smooth,” said Ingels, who after getting his check celebrated by tweeting a video of Conan O’Brien high-fiving Andy Richter.