Washington to pay $ 16 billions to farmers affected by the trade war in China
The US government will pay American farmers hurt by the trade war with China between $15 and $150 per acre in an aid package totaling $16bn with farmers in the South poised to see higher rates than in the midwest.
As US and Chinese negotiators prepare to meet face-to-face for the first time since talks on the dispute collapsed in May, the agriculture secretary, Sonny Perdue, said the package showed that Donald Trump knew farmers were “fighting the fight”.
The assistance, starting in mid-to-late August, follows the president’s $12bn package last year that was aimed at making up for lower farm good prices and lost sales.
US farmers, one of Trump’s key constituencies, have been among the hardest hit in the year-long trade war between the world’s two largest economies. Shipments of soybeans, the most valuable US farm export, to top buyer China sank to a 16-year low in 2018.
Democrats criticised the move, saying farmers needed fair trade instead of a bailout.
Perdue argued that farmers were disproportionately hurt by the trade dispute and that the new round of aid was justified.
“President Trump has a great affection for America’s farmers and ranchers and it’s pretty evident in this program,” Perdue said. “He knows that they are fighting the fight and they are on the front line.”
In the new aid package, the US department of agriculture said it would pay farmers according to geographic location rather than by crop – a change from last year.
“There were a number of factors from last year’s programs that we wanted to correct,” USDA chief economist Rob Johansson said.
Farmers in the cotton-growing Mississippi Delta states stand to be the greatest beneficiaries of the program, according to a Reuters analysis of the payment rates posted online.
The average county payment rate is about $95 per acre in Alabama, $87 in Mississippi and $70 in Louisiana. Payment rates were lower in the midwest, with a $69-per-acre county average in Illinois, the country’s top soybean producer, and a $66 average in Iowa, the top corn- and hog-producing state.
The program covers 29 commodity crops, including soybeans, corn, wheat, sorghum and upland cotton. It also covers dairy and hog farmers, as well as farms that grow 10 specialty crops – including almonds, pistachios, walnuts, cranberries and fresh sweet cherries.
Johansson said the minimum and maximum payment rates were based on an analysis of 10 years of trade data and the amount countries with retaliatory tariffs, including China and India, could have imported.
“These payments are enough to make a difference, kind of get us to the harvest,” said Tim Bardole, an Iowa corn and soybean farmer.
To be eligible for payments, crops must be planted by 1 August 2019, the USDA said. The number of farm acres that could not be planted was at a historic level this year because of midwest flooding, officials said, further straining the farm economy.
While farm and industry groups welcomed the support, they continued to push for the Trump administration to end trade fights and strike deals with top export markets.
Such federal financial support, the Illinois Farm Bureau said in a statement, “is not a long-term solution.” The National Cotton Council said there had been significant cancellations and deferrals of cotton sales to China over the past year.
Trade talks between China and the United States broke down in May after getting close to a potential agreement and were only revived in a meeting between Trump and Chinese president, Xi Jinping, last month.