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Trump administration reveals details of $16 billion farm bailout in U.S. trade war

Many say the bailout will not make farmers whole in the face of tariffs and other adverse conditions

A John Deere brand combine harvester collects wheat in Kirkland, Ill., on July 15. (Daniel Acker/Bloomberg)
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The Trump administration revealed details of its $16 billion aid package for farmers hit in the U.S.-China trade war — with key provisions meant to avoid large corporations scooping up big payouts at the expense of small farmers.

Trump announces new $16 billion aid package for American farmers hit in trade war

In 2018, payout to individual farmers hurt by the trade war with China was capped at $125,000; this time it has been raised to $250,000 per person or legal entity, with a cap of $500,000 across three categories — for those who produce soy as well as vegetables and pigs.

The cap comes in response to claims of significant abuse in last year’s $12 billion trade relief package.

The White House admits its trade war is hurting farmers — with a $12 billion bailout

The Environmental Working Group, using data received under the Freedom of Information Act, found individual farmers in five states — Indiana, Illinois, Missouri, Tennessee and Texas — received more than $900,000 in 2018, largely through a loophole that allowed each member of a farm-owning family to apply for relief.

Money flowed to foreign-owned businesses and to those who don’t live or work on a farm, including an architect in Manhattan, Chinese conglomerates and Brazilian beef companies. More than $38 million in aid money went to residents of cities including San Francisco, Los Angeles, New York and Washington.

It is unclear whether the changes in this round of trade relief will preclude these overly generous payouts or prevent “double dipping” for farmers who receive commodity subsidies, crop insurance and disaster recovery payments.

Eligible farmers will receive a minimum of $15 per acre and a maximum of $150 per acre, regardless of specific crop, the exact amount determined county by county. Three groups of agricultural producers are eligible for assistance: farmers who grow row crops; those who produce specialty crops such as nuts, cranberries and grapes, and producers of dairy and pork.

Fifty percent of farmers’ aid will be paid out at the end of August, in the first of three payments.

Agriculture Department chief economist Rob Johansson said that the payment rates are based on the USDA’s estimates of trade damage and that retaliatory tariffs have persisted longer than expected.

No, China isn’t paying for the farm bailout. Americans are.

“We looked at trade over the past 10 years and determined the maximum amount of trade that a retaliating country could have had,” Johansson told reporters. “We do get larger amounts of damages [when we] look at the number of retaliatory tariffs and a number of non-tariff barriers that are affecting farmers.”

Agriculture Secretary Sonny Perdue conceded that the relief would not make up for farmers’ recent struggles with falling farm income and commodity prices, rising debt and floods that disrupted spring planting.

“If you go out and survey farmers and ask them for their results, you won’t find any that feel they’ve been made whole by this program,” Perdue said.

The package sets aside $1.4 billion of the total $16 billion to purchase food directly from affected farmers and distribute it to an expanded network of food banks and food pantries.

Democrats expressed skepticism about the new aid plan. “These short-term, inequitable payouts are not a replacement for markets and a coherent trade strategy,” said Debbie Stabenow (Mich.), the top Democrat on the Senate Committee on Agriculture, Nutrition and Forestry, in a statement. “This aid is not equitable and favors certain farmers over others. Bottom line — it’s not fair.”

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Segments of the agricultural industry offered a tepid response.

“U. S. pork producers are highly dependent on export markets, shipping more than 25 percent of production to foreign markets,” National Pork Producers Council President David Herring said in a statement. “We are grateful to the Trump administration for providing partial relief as hog farmers have incurred significant losses due to trade disputes that have lingered for more than a year.”