By Rebecca Heilweil
After President Trump announced a new $16 billion trade assistance package for farmers on Thursday, U.S. Department of Agriculture Secretary Sonny Perdue says it’s not the president who is picking winners and losers in the American economy, but China.
“President Trump understands that farmers will bear an inordinate amount — a disproportionate brunt — of the tariff disruptions,” Purdue told Cheddar in an interview. He accused China of deliberately — and politically — targeting farmers, many of whom voted for the president, through its tariffs, and said: “most of those go to agriculture because agricultural has a surplus.”
“I don’t think it’s a bailout,” Perdue added.
The large bulk of the $16 billion package will be delivered as direct payments to farmers through the Farm Service Administration, based on production. A small portion of the funds will also be used to buy surplus product for the Food and Nutrition Service to distribute through nutrition assistance programs.
Last year, the Trump administration administered a $12 billion trade assistance package, which faced criticism for [delayed payouts] (https://www.nytimes.com/2018/11/19/us/politics/farming-trump-trade-war.html). "It was supposed to be a substitute for the market loss that we had due to the trade war. And it was a help, no doubt about it " Minnesota Farmer Shane Isane [told Cheddar] (https://cheddar.com/media/farmer-on-trade-trump-china-trade-war) on Tuesday. "But most farmers don't want to get that check. We'd rather get it from our markets."
Last year’s tariff relief package was funded through the Commodity Credit Corporation, an entity run by the USDA that can borrow from the Treasury Department.
Advocates for farmers expressed some gratitude for the new funds, but emphasized that the package should not distract from creating a long-term solution. In a news release, the American Soybean Association said that “a second round of financial support to offset farm losses is only a partial and temporary Band-Aid and not a permanent solution for soy growers who have lost their number one export market since tariffs were implemented by both countries.” The pain of tariffs has especially hurt soybean farmers, who saw their crop prices hit a 10-year low this month.
The National Farmers Union echoed a similar sentiment. In [a statement] (https://nfu.org/2019/05/23/usda-announces-details-of-trade-assistance-package-nfu-urges-adoption-of-supply-management-policies/), the organization’s president Roger Johnson called the package “a short-term fix for a very long-term problem.”
He added that “our ongoing trade wars have destroyed our reputation as a reliable supplier and have left family farmers with swelling grain stores and empty pockets. The very least we can do is provide our country’s struggling food producers with the certainty of a longer-term plan that also addresses the persistent and pernicious problem of oversupply.”
But trade negotiations still appear dead, with China’s new round of retaliatory tariffs set to go into effect June 1. “The ball is in China’s court when they want to come to the table and operate like every other international partner,” said Perdue. “They need to play fair, play by the rules, and we would love to have them as a customer.”
Perdue says that he thinks farmers anxious about ongoing trade tensions would empathize with Trump’s perspective. “I can assure you that a farmer, if they found their local grain elevator had been cheating them for years, they wouldn’t continue to do business with them,” said Perdue. “And that’s exactly what President Trump is saying. We’re going to find another partner and we’re going to find other markets here.”
Farmers can expect some limited relief from the recent lifting of tariffs against Mexico and Canada. China is the U.S.’s fourth-largest agricultural export market, and the U.S. sent [nearly $10 billion] (https://ustr.gov/countries-regions/china-mongolia-taiwan/peoples-republic-china) worth of agriculture products to the country last year.