The Trump Administration will provide $16 billion in a new round of farm-aid payments to compensate for losses from the U.S. trade war with China, Agriculture Secretary Sonny Perdue said Thursday.
Perdue told Fox Business Network that China is targeting Donald Trump’s political base with its retaliatory tariffs on U.S. agricultural products and that the president won’t let farmers “bear the brunt of that.” Trump is scheduled to meet with farm leaders at 3:15 p.m. Washington time.
Soybean futures declined after the interview. The government payments would entice U.S. farmers to plant more beans, said Charlie Sernatinger, global head of grain futures at ED&F Man Capital Markets in Chicago. “If they get paid based on this autumn’s production, they will plant the beans,” he said by phone.
Republican Senator Joni Ernst of Iowa has criticized aid payment levels reported by Bloomberg earlier in the week as inadequate for corn farmers. When Perdue was asked after the Fox Business interview whether growers of the crop would be satisfied with their aid payments, he responded, “I think they will be.”
As of earlier this week, the administration was considering payments to soybean growers of $2 per bushel, and 4 cents per bushel to corn farmers, based on the acreage sowed this year, according to two people familiar with the plan.
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. For Trump, appeasing his rural-voter base has become crucial ahead of the 2020 elections.
What farmers really want are trade deals to be finalized, according to Beth Ford, chief executive officer of Minnesota-based agriculture cooperative Land O’Lakes Inc.
“What do farmers want? They want trade,” Ford said in an interview in Bloomberg’s Chicago office on Thursday. “Nobody wants a payment.”
Declining to comment on the proposed second-round aid package, Ford said dairy farmers missed out on their fair share of the previous round.
“We are going to see what the administration has allocated, what the math comes out with. The math last time wasn’t terrific,” she said. “The estimate was that the market shift down cost them about $2 billion or more and I think they got 250 million.”