Aid to soybean farmers for lost trade set at $3.6B
Soybean farmers will receive $3.6 billion in direct payments to compensate them for losses incurred during ongoing trade disputes between the United States and China, the U.S. Department of Agriculture said Monday.
Producers of corn, wheat, sorghum, pork, dairy and cotton also will receive aid in the first phase of a $4.7 billion direct-aid package.
The USDA also said it will purchase $1.2 billion in other commodities, mainly, pork, fruits and vegetables, for distribution to schools, food banks and other outlets. The agency will spend another $200 million on various promotional efforts to expand markets for American agriculture.
Payments to farmers could begin flowing by mid-September, depending on the crop or commodity produced. Applications will be accepted starting Sept. 4. Payments are based on 2018 yields.
A second round of payments could be available “if warranted,” the USDA said, referring to the initial plan announced last month by the White House for a total aid package of up to $12 billion.
Randy Veach, president of the Arkansas Farm Bureau, said the help was needed by farmers in a jam that’s not their fault.
“It’s a necessary program,” Veach, who farms in Mississippi County, said. “We’ve had farmers and ranchers who’ve lost some significant money over this whole trade war. It’s not a payment. It’s a compensation for how our markets were destroyed in the trade wars.”
Soybean farmers will receive $1.65 a bushel, or $3.6 billion of the $4.7 billion in direct payments detailed Monday by the USDA.
“Soybeans that were over $10 [a bushel] are now barely over $8,” Veach said, adding that U.S. farmers already are looking at a fifth-straight year of declining farm incomes. “Low market prices and tariffs are a blow on top of that.”
Soybean futures dropped this spring when China — the biggest importer of U.S. soybeans — imposed a 25 percent tariff on soybeans and other agriculture products in response to the President Donald Trump administration’s tariffs on Chinese goods imported by the U.S.
Pork producers will receive the second-highest amount of payments, at $290 million, or $8 a head.
Cotton producers will receive about $278 million,
or 6 cents per pound. Corn producers will receive $96 million, or 1 cent per bushel.
The National Corn Growers Association has said the trade wars have cost its producers some $6 billion, or 44 cents a bushel. The National Association of Wheat Growers has presented similar numbers during the weeks since the aid program was first mentioned.
“It’s important to note all of this could go away tomorrow, if China and other nations simply correct their behavior. But in the meantime, the programs … buy time for the president to strike long-lasting trade deals to benefit our entire economy,” said U.S. Agriculture Secretary Sonny Perdue in a statement
Monday.
The money comes from the Commodity Credit Corp., a federal agency created during the Great Depression to stabilize crop prices and farm income. Approval by Congress isn’t necessary.
The Farm Service Agency, a division of the USDA, will be in charge of the program.
David Curtis, the Farm Service Agency’s Arkansas director, said Monday that he expects a flood of phone calls soon.
Wheat farmers have finished their work and will be among the first to begin applying, starting next week, Curtis said.
“Cotton and corn and soybean farmers will have to wait a while longer,” he said. “It’s some help that our producers really didn’t expect at first.”
Individual direct payments are capped at $125,000. The program also is limited to applicants with average adjusted gross incomes of less than $900,000 for the 2014-2016 tax years.
The $1.2 billion in commodity purchases primarily will involve fruits, nuts and vegetables hit by tariffs. Those commodities will be distributed by the USDA’s Food and Nutrition Service to states for further distribution to eligible child-nutrition programs and food banks and food pantries.