USA – The Trump administration has said it would provide up to US$12 billion in aid for U.S. farmers from early September to shield them from the repercussions of trade disputes between the United States and China, the European Union and others.
According to CNBC, the United States has never before offered aid of this scale for the impact of a trade dispute, said Scott Irwin, agricultural economist with the University of Illinois.
Large, short-term assistance programs are typically offered during times of recession or low prices for agriculture commodities.
The government last offered farmers a comparable amount of emergency assistance starting in 1998 to address low hog, corn and soybean prices, according to Chad Hart, a professor of economics and crop markets specialist at Iowa State University.
Sonny Perdue, secretary of the U.S. Department of Agriculture, announced the government would use the Commodity Credit Corporation (CCC), established during the Great Depression nearly a century ago, to compensate farmers for an estimated US$11 billion in losses due to the trade wars.
CNBC added that this aid is in addition to the dozens of assistance programs for farmers that are usually on offer, which include subsidized insurance, loans, disaster relief, training classes and trade promotion.
In 2017, the federal government spent nearly US$19 billion on agriculture support programs, and that total had been expected to rise to nearly US$27 billion in 2018, Office of Management and Budget data showed before Tuesday’s announcement.
According to the USDA, the said the US$12 billion would be divided into three different programs, with more details available in coming weeks.
The first programme is the direct payments to farmers of soybeans, sorghum, corn, wheat, cotton, dairy and hogs.
It will also fund the purchases of foods including fruits, nuts, rice, legumes, beef, pork and milk for distribution to food banks and nutrition programs.
Lastly, the funds are meant as a trade promotion program to develop new markets.