Trade Aid Details Still Unsure

Thursday’s disaster aid package rollout was good news for agriculture but many of the details are still uncertain.  The total aid amount could come in at $16 billion and will cover a wider range of crops than last year’s aid to farmers.  However, the administration didn’t disclose some key details like just how much money individual farmers and ranchers will get in cash.

Politico says $14.5 billion is being earmarked for direct payments to producers.  USDA developed a new and more complex formula for calculating producers’ compensation to remove incentives for planting certain crops. Instead of being tied to what farmers actually grew in 2019, they’ll be computed on a county-by-county basis.  Officials say they’ve estimated the amount of damage inflicted on producers by trade disputes and will then multiply that by the acreage planted in the area.

Farmers who don’t plant a crop this year won’t be eligible for cash assistance. This will likely complicate things for Midwest producers who’ve been battling rain this spring while trying to plant. The USDA’s trade aid package could encourage them to try to plant anyway. The president says the aid would be paid for by the tariffs that China is paying into the U.S. Treasury. That’s not the case. Ag Secretary Sonny Perdue said the USDA will tap into the Commodity Credit Corporation, which has broad authority to stabilize the farm economy.

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