WASHINGTON – The Agriculture Department said Thursday it will provide $16 billion in assistance to farmers to help offset their losses triggered by the ongoing trade conflict with China and other countries.
The program will provide as much as $14 billion in direct payments to farmers and comes amid a breakdown in talks between the U.S. and China that were intended to forge a new trade deal between the world’s two largest economies.
President Donald Trump, who will formally announce the program at the White House later Thursday, ordered the farm assistance because he knew producers would bear the brunt of the fallout from the stalled trade talks, Agriculture Secretary Sonny Perdue told reporters.
“All of this would have been moot if China had acted appropriately and fairly,” Perdue said.
The program is modeled after a $12 billion financial assistance program put in place last year to help farmers hurt by retaliatory tariffs levied by China after Trump had slapped duties on Chinese products.
But there are some key differences in this year’s program.
A single payment will be distributed to individual counties based upon the number of crops planted and an assessment of their losses over several years. Last year, different payments were determined based upon the type of crop planted.
The payments will be made in three phases. The first payments will go out in July or August. The second will come later this fall, possibly in November. The third payment will come early next year.
While the first round of payments is certain, Perdue suggested the second and third rounds will be distributed only if the U.S. and China still haven’t reached a trade agreement.
Of the $16 billion, $14.5 billion will be used to provide direct aid for producers of various agriculture products, including alfalfa, barley, canola, dried peas, cotton, flax seed, lentils, rice, peanuts, oats and sorghum.
Another $1.4 billion will be used to buy surplus commodities, including fruits and vegetables, beef, pork, lamb and milk, and then distribute them to food banks and other organizations that serve low-income and needy residents.
An additional $100 million will go toward developing and opening new markets for farm products.
Besides China, farmers will be eligible for assistance if they have been harmed by U.S. trade conflicts with the European Union and Turkey.
Some farmers complained about long waiting periods for payments under the initial assistance program, while others argued the assistance did not cover the full loss of their crops.
Soybean farmers in particular have been hit hard by the trade war between the U.S. and China. Soybeans represent the largest U.S. export to China, with a value of $12.4 billion last year. But prices plummeted after China slapped a 25% tariff on imports of U.S. soybeans last year in retaliation for tariffs that Trump had placed on Chinese goods