US to pay farmers $15-$150 per acre from August, part of $16bn trade aid

WASHINGTON/CHICAGO: The US government will pay American farmers between $15 to $150 per acre starting from mid- to late-August, Department of Agriculture officials said on Thursday, as part of its $16-billion aid package to compensate those hurt by the trade war with China.

This would be the second round of farm assistance following President Donald Trump's $12-billion plan last year, aimed at making up for lower farm goods prices and lost sales due to US trade disputes with China and other nations.

Democrats criticized the move, saying farmers needed fair trade instead of a bailout, but Agriculture Secretary Sonny Perdue argued that US farmers were disproportionately hurt by the trade dispute, and the fresh round of aid was justified.

"President Trump has a great affection for America's farmers and ranchers and it's pretty evident in this program," Perdue said. "He knows that they are fighting the fight and they are on the frontline."

US farmers, a key Trump constituency, have been among the hardest hit in the trade spat between the world's two largest economies that has continued for more than a year. Soybeans, the most valuable US farm export, saw shipments to China sink to a 16-year low in 2018.

While farm and industry groups hailed the aid move on Thursday, they continued to push for the Trump Administration to end trade fights and to foster deals with top export markets.

Such federal financial support, the Illinois Farm Bureau said in a statement, "is not a long-term solution."

Trade talks between China and the United States broke down in May after getting close to a potential agreement and were only revived in a meeting between Trump and Chinese President Xi Jinping last month.

Next week, top US and Chinese negotiators will be meeting face-to-face for the first time since then.

Promises of large agricultural purchases by China have been a key element of a potential deal, but Washington has complained that Beijing hasn't delivered on those fully. Perdue said of the 20 million tonnes of soybeans China committed to buy, 13.6 million tonnes have been purchased so far.

COUNTY DISPARITIES

In the new aid package, USDA said it established varying county rates. The amounts were calculated based on estimated trade damage caused by retaliatory tariffs imposed by China, the top export market for many US agricultural products before the trade dispute.

Perdue said there were likely to be differences between counties, such as neighboring farmers receiving different payments depending on where their fields were located.

Though the agency worked hard to reconcile such discrepancies, "there will be some disparities that are just impossible to overcome," he added.

Farmers in the Mississippi Delta states stand to be the greatest beneficiaries of the program, according to a Reuters analysis of the numbers.

The average county payment rate is about $95 per acre in Alabama, $87 in Mississippi and $70 in Louisiana, according to USDA data. Five counties in Alabama and three in Mississippi were allotted the maximum $150 payment out of a total of 22 counties total nationwide that were allotted the maximum rate.

Payment rates were lower in the Midwest, with a $69-per-acre county average in Illinois, the country's top soybean producer, and a $66 average in Iowa, the top corn and hog producing state.

The program covers farmers who produce 29 commodity crops, including soybean, corn, wheat, sorghum and upland cotton. It also covers dairy and hog farmers, as well as farms that grow 10 different specialty crops - including almonds, pistachios, walnuts, cranberries and fresh sweet cherries.

USDA said sign-ups for the payments would begin on Monday and last until Dec. 6. Additional tranches of the payments are scheduled for November and January but will depend on whether trade disputes are still ongoing or not by then.

To be considered eligible for payments, crops must be planted by Aug. 1, 2019, the USDA said.

The number of farm acres that could not be planted due to weather was at a historic level this year, USDA officials said, adding the department was still working to finalize its estimate.