Trump unveils US$16 bln farm aid plan to offset trade war losses

May 24, 2019 09:19
US President Donald Trump speaks to reporters at the White House on Thursday during an event devoted to ‘America's farmers and ranchers’. Photo: Reuters

The Trump administration on Thursday unveiled a US$16 billion farm aid package to offset losses from the trade war with China and said payment rates to farmers would be determined by where they farm rather than what crops they grow, Reuters reports.

“The farmers have been attacked by China,” Trump said in a press conference about the aid package. “But the $16 billion of funds will ... make clear that no country has veto on America’s economic and national security,” he said.

The Sino-US trade dispute, which escalated this month after Washington and Beijing hiked tariffs on imports of each other’s goods, has left US farmers sitting on record volumes of soybeans with China halting purchases.

USDA officials said on Thursday that they will roll out US$14.5 billion in direct payments in three separate tranches with the first one planned for late July.

“The package we are announcing today ensures that farmers will not bear the brunt of those trade practices by China or any other nations,” Secretary of Agriculture Sonny Perdue said.

“While farmers would tell you they’d rather have trade not aid, without the trade ... they’re going to need some support.”

China, the world’s top soybean importer, curbed purchases of US soy last year when Trump imposed tariffs on Chinese goods, prompting China to retaliate with tariffs on US soy, pork, corn and other products.

Many farm groups welcomed Washington's latest support measure, but called for a trade deal with China as soon as possible.

Some Democrats have slammed the plan, calling it a ‘band-aid’ and said the county-based payment system could leave some farmers with reduced aid.

Perdue said the second and third tranches, with exact amounts yet to be decided, will be dependent on the progress in the China trade talks and whether the US will get a deal.

The total package also includes US$1.4 billion of support through food purchases and US$100 million allocated to development of foreign markets, according to Reuters.

Perdue said the USDA has redesigned last year’s aid program of up to US$12 billion based on feedback. The new package therefore will have a single payment rate per county, calculated by the damages in that area, instead of a rate for every commodity across the nation.

“Those per acre payments are not dependent on which of those crops are planted in 2019, and therefore will not distort planting decisions,” USDA said in a statement.

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