US To Roll Out $16 Billion Trade Aid Program For Farmers In Three Stages
After promising to provide assistance to farmers that are hit by the ongoing trade war with China, the Trump administration announced this week that it will soon be rolling out its trade aid program.
The recently announced $16 billion aid program for American farmers will reportedly be released in three stages for those who have been hit the hardest by the recent deterioration in the trade negotiations between the United States and China.
The bulk of the program will consist of a cash payment amounting to $14.5 billion to producers of major crops and livestock products. This will include producers of corn, wheat, pork, and dairy, which have been majorly impacted by the increased tariffs from both sides.
A part of the funds has apparently been collected by the Treasury Department from the tariffs themselves. According to the US Department of Agriculture, the aid program should ensure the financial wellbeing of farmers who have been affected by the trade measures implemented by both parties.
The next part of the program is the government's bulk purchase of fresh produce and other farm products impacted by the tariffs.
The government plans to spend around $1.4 billion for the products, which will then be used to support food banks, panties, and school meal programs across the country. Lastly, the Department of Agriculture will be initiating a $100 million trade promotion program for crop and livestock farmers to help it develop further into newer markets.
Agriculture Secretary Sonny Perdue mentioned during a recent press call that the entire program would have been unnecessary if China had only acted fairly during the initial trade negotiations. Perdue outright blames China for making unfair changes in the areas involving non-tariff barriers and intellectual property, which eventually led to the US backing out of the deal and establishing its tariff measures.
The trade aid plan for farmers far exceeds the initial direct payment and relief programs laid out by the Trump administration prior to the retaliatory tariffs. The administration initially planned to only spend $12 billion in direct payments; a plan that was announced last year.
Among the biggest sectors hit by the increased tariffs are American soybean farms. China was the biggest importer of American soybeans, buying nearly half of all the country's soybean exports.
This drastically changed with exports to China falling by as much as 74 percent in 2018. Apart from soybean farmers, producers of major crops such as cotton, wheat, and corn are eligible for the program. Producers of specialty crops such as grapes, cherries, nuts, and cranberries are also eligible.