Trump announces $13 billion in additional coronavirus aid to farmers

Trump provided no details of the aid, which was expected to cover losses since April 15, the cutoff date for the Coronavirus Food Assistance Program (CFAP).

During a re-election rally in rural Wisconsin on Thursday, President Trump announced an additional $13 billion in coronavirus relief for U.S. farmers and ranchers, more than doubling assistance to the sector. The money will be available beginning next week, said the president.

Trump provided no details of the aid, which was expected to cover losses since April 15, the cutoff date for the Coronavirus Food Assistance Program (CFAP). As of Monday, the USDA had paid $9.9 billion in cash to producers out of the $16 billion that was offered in CFAP. There have been complaints of an unduly complex application process and a narrow window of coverage.

“I’m proud to announce that I’m doing even more in support of Wisconsin farmers,” said Trump in Mosinee, a town of 4,100 in the central part of the state.

“Starting next week, my administration is committing an additional — you’ve been asking for this for a long time — $13 billion to help farmers recover from the China virus, including Wisconsin’s incredible dairy, cranberry, and gingseng farmers, who got hurt badly.” The USDA was expected to announce details as early as Friday for what Agriculture Secretary Sonny Perdue has called CFAP2.

Rural America was key to Trump’s victory in 2016, and he remains highly popular among farmers, who are often political conservatives. Three-quarters of farmers polled by Farm Futures in late July said they would vote for the president, roughly the same proportion that backed him in 2016. At present, Trump trails Democratic nominee Joe Biden in polling in Wisconsin, a battleground state, although he narrowly won the state four years ago. Rural voters are a quarter of the electorate in Wisconsin.

The coronavirus aid follows $23 billion in trade war payments since 2018 to mitigate the Sino-U.S. trade war’s impact on agriculture. Trump boasted about the trade war payments during his hour-and-a-half-long speech in Mosinee. Farm subsidies will set a record this year and will lift net farm income, a USDA measure of profitability, to its highest level since 2013. But cash receipts from the sale of crops and livestock would be the lowest in a decade. The FAPRI think tank says farm income could plunge in 2021 when the stopgap trade and coronavirus programs expire.

In a letter to Congress, 40 farm groups asked for an immediate infusion of funding for the USDA so it will not run out of money in the weeks ahead. Half a dozen farm-state Republicans used a round robin of Senate speeches to amplify the request. The money would go into the “USDA’s bank,” the Commodity Credit Corp., which can spend $30 billion at a time before asking for more money. Replenishment of CCC funding is a routine provision of the annual USDA funding bill.

“Times continue to remain tough in farm country. Farmers and ranchers continue to experience low commodity prices, a global pandemic, natural disasters, and the effects of retaliatory tariffs,” said Agriculture Committee chairman Pat Roberts of Kansas.

Farm groups and their congressional allies fear the CCC funds will be left out of the short-term government-funding bill now under construction in Congress and expected to expire in December. The farm groups said the USDA could effectively run short of cash by the end of October.

Michigan Sen. Debbie Stabenow objected to the possibility, reported by Reuters, that the administration might tap the USDA for $300 million to give to oil refiners that were denied exemptions from the Renewable Fuel Standard. “It is outrageous for the administration to even consider taking millions from our farmers to bail out Big Oil,” said Stabenow, the senior Democrat on the Senate Agriculture Committee.

The USDA could have “as little at $2 billion” left in CCC spending authority when fiscal 2020 ends on Sept. 30, said John Newton, chief economist at the American Farm Bureau Federation, in a Market Intel blog. The so-called CARES Act, enacted in March, made $14 billion available to the CCC in July. Trump is drawing on that money for the new round of coronavirus payments. Newton said the “USDA likely does not have sufficient resources to meet upcoming farm bill and conservation program payments beyond October without an immediate replenishment of the CCC.”

Some USDA payments, such as $2 billion used for land stewardship programs as well as some crop supports, are tied to the Oct. 1 start of the fiscal year. If the USDA is short of cash, “payments and programs would be significantly delayed, jeopardizing operations across the country,” said the farm groups.

Meanwhile, the National Pork Producers Council said more federal aid was needed to stabilize the hog industry, including compensation for culling herds and additional direct payments “to hog farmers in crisis” because of the pandemic. Coronavirus outbreaks at packing plants reduced the market for hogs this spring. NPPC president Howard (HV) Roth, a Wisconsin hog farmer, said there should be no ceiling on aid. The limit has been $250,000 per farmer or entity and $750,000 for corporations and partnerships.

“We’re losing producers … the safety net is really important,” said Nick Giordano, NPPC vice president and counsel. There were anecdotal reports, though no firm figures, at an NPPC conference this week of farmers exiting the hog business. Neil Dierks, chief executive of the Pork Council, said the USDA’s quarterly Hogs and Pigs report, scheduled for Sept. 24, could signal whether the sector was contracting. The report, based on a survey of 7,500 producers, estimates the U.S. hog inventory. There were 79.6 million hogs on U.S. farms, according to the most recent Hogs and Pigs report, the highest number ever for June 1.

Produced with FERN, non-profit reporting on food, agriculture, and environmental health.

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