The Trump administration said Monday it has approved a second round of payments in its bailout program for farmers hurt by the ongoing trade war with China.
The Agriculture Department announced in a news release that it will spend billions more through 2019 on direct cash aid to producers of soybeans, cotton, corn and several other commodities. The bulk of payments are slated for soybean farmers, after new government data showed a sharp decline in their exports to China.
This second round of payments is a portion of a broader farm bailout the Trump administration announced this summer, which the administration at the time said could spend up to $12 billion to help farmers. This summer, Agriculture Department officials said the first emergency aid package would consist of $4.7 billion in direct payments to farmers, while this second round of payments would bring total direct payments to farmers to $9.6 billion.
As of Nov. 18, USDA had paid more than $1 billion to farmers in response to more than 240,000 applications for assistance.
“Today I am making good on my promise to defend our Farmers & Ranchers from unjustified trade retaliation by foreign nations,” President Trump said on Twitter. “Our economy is stronger than ever — we stand with our Farmers!”
The fate of the second round of bailout payments had been uncertain as Trump administration officials suggested it might not be necessary if trade tensions with China subsided. Bloomberg News reported earlier this month that China has resumed buying soybeans, following Chinese President Xi Jinping’s meeting with Trump at the Group of 20 nations.
But signs are mounting that the trade war has sharply reduced exports of some U.S. commodities, and farming groups have criticized the bailout as insufficient to cover their losses. New data released last week by the USDA showed a decline of about 97 percent in soybean exports to China from the prior year, said Torsten Slok, chief international economist at Deutsche Bank Securities.
Critics have also accused the bailout of enriching large and foreign-owned firms, as well as being wasteful and inefficient. (A Chinese-owned pork firm rescinded its contract under the bailout earlier this year amid criticism on Capitol Hill.) The administration has billed the package as a short-term measure necessary to help farmers weather the trade war.
The three-pronged $12 billion aid package pledged $9.6 billion in direct cash payments to farmers, a $1.2 billion program to purchase farm goods and distribute them to food banks, and a $200 million program to promote exports in foreign markets. About $7.2 billion of the $9.6 billion cleared by the administration will go to producers of soybeans, according to an Agriculture Department news release.
USDA officials said Monday they have already procured more than 4,500 truckloads of food through the direct purchase program and have received applications from more than 70 applications for the trade promotion grants.