Trump’s $16 billion farm aid package gets tepid reception

WASHINGTON — President Donald Trump’s new $16 billion aid package for farmers raises the federal government’s bill for the trade war but isn’t easing anyone’s concerns about damage to the U.S. economy.

Farmers would prefer a resumption of normal trade over government handouts. Several farm-state lawmakers say the payments are too meager. And the money risks distorting agriculture markets.

“What do farmers want? They want trade,” said Beth Ford, chief executive officer of Minnesota-based agriculture cooperative Land O’Lakes Inc., before the White House released details of the plan. “Nobody wants a payment.”

Democratic Sen. Tina Smith of Minnesota derided the administration’s trade assistance in a Bloomberg TV interview as “a little BandAid” that “won’t take care of the problem.”

The Trump administration unveiled its latest package Thursday to help farmers hurt by the trade war with China, including $14.5 billion in market facilitation payments directly to producers and $1.4 billion in government purchases to be distributed through school lunch programs and local food banks. That brings to $28 billion the total trade assistance the U.S. has announced for agriculture.

Farmers can expect to receive their first aid payments by July or August, Agriculture Department officials said in a conference call with reporters on Thursday. The final payment is scheduled for the beginning of the 2020 election year.

American farmers are struggling to remain afloat as the tit-for-tat tariffs spat with China leaves soybeans from last year’s harvest piling up. American farm income dropped 16% last year to $63 billion, about half the level it was as recently as 2013. For Trump, appeasing his ruralvoter base has become crucial ahead of 2020 elections.

The administration decided to provide aid for farmers and ranchers because they “bear the brunt of this trade dispute disproportionately,” Agriculture Secretary Sonny Perdue said on the conference call.

John C. Baize, an independent consultant who advises the U.S. Soybean Export Council, said the payments will “underwrite the farm economy.”

“That will help the president in rural America with respect to the 2020 election,” Baize said. “Clearly producers of some commodities that are doing fine will get the payments while others that are hurting because of the trade war will get less.”

In the run-up to the program, farmers squabbled over how an aid package should be divided. The National Corn Growers Association, complaining its members were short-changed in last year’s $12 billion aid program, waged a public campaign for better treatment of their crop in aid levels. Corn growers in 2018 received 1cent-per-bushel payment while soybean producers received $1.65 per bushel.

GOP Sen. Joni Ernst of Iowa took up the cause of corn farmers earlier in the week, pressing for higher payments.