Trump’s trade and coronavirus aid to agriculture could hit $50 billion
With its new offer of $14 billion in coronavirus relief, the Trump administration could spend $50 billion — quadruple the cost of the auto industry bailout — in less than three years to buffer the impact of trade war and pandemic on agriculture. Farm groups welcomed the second round of coronavirus assistance while critics said it was “old-fashioned vote-buying” ahead of the Nov. 3 presidential election.
Sign-up opened on Monday and runs through Dec. 11 for CFAP2, the new iteration of the Coronavirus Food Assistance Program that went into operation last spring to cover low prices and lost sales due to the coronavirus. Hundreds of commodities, from cotton and wheat to goat milk, hemp, and tobacco, are eligible for payments. For most row crops, the minimum payment is $15 an acre.
“We just couldn’t totally estimate what those [losses during spring and summer] would be, so we waited until later this summer to understand better what the damage is from COVID,” said Agriculture Secretary Sonny Perdue during a Red River Farm Network interview.
The payment limit of $250,000 per farmer or entity is on top of a similar limit in the original CFAP, so the coronavirus maximum would be $500,000 per farmer or entity. Corporations, partnerships, and limited liability companies qualify for payments of up to $750,000 or a combined $1.5 million from the two versions of CFAP.
President Trump announced the assistance during a re-election rally in rural Wisconsin last Thursday night. The USDA released details of the long-expected CFAP2 on Friday.
The $14 billion for CFAP2 follows $16 billion that was earmarked for agriculture in the original CFAP. In 2018 and 2019, the administration paid farmers and ranchers $23 billion to mitigate the impact of the Sino-U.S. trade war, which took hold in mid-2018. All told, $53 billion was available for the trade and coronavirus programs but expenditures are running around $33 billion at present.
Perdue said “a little over $10 billion” has been spent under the original CFAP. The deadline for applications was Sept. 11. “We expect that number to go up.” Once the total is final, the remainder could be spent on “clean-up for things we might have missed,” said Perdue. “Obviously, we want to expend the money that Congress has appropriated for both of these.”
He declined to say whether coronavirus aid would go to ethanol producers.
Scott Faber of the Environmental Working Group said CFAP2 amounted to “old-fashioned vote-buying … No amount of money will make up for the markets he [Trump] has lost.” Joshua Sewell of Taxpayers for Common Sense said CFAP2 mostly ignored farmers who sell their crops locally at farmers markets or to restaurants, and perpetuated the administration’s practice of setting high payment limits in its stopgap programs.
“With government subsidies at record levels, prices for many commodities rallying, and general economic conditions improving, calls for tens of billions of dollars in additional farm subsidies are less about need than about greed,” said Sewell.
Kevin Ross, president of the National Corn Growers Association, said there was a clear need for federal aid. “We’re doing all we can to get back on solid ground, but we can’t do it alone, which is why [CFAP2] is a positive and welcome step forward.”
Cattle and corn producers would see the largest amount of aid, according to USDA estimates. Payments to corn growers could reach $3.5 billion, followed by $2.8 billion for cattle, $2 billion for milk, $1.7 billion for hogs, $1.4 billion for soybeans, $725 million for wheat, $333 million for eggs, $310 for cotton, and $280 million for broiler chickens.
“I still want to see help for the ethanol industry that has been hurt by the drop in fuel demand, textile mills that are helping create COVID medical supplies, pork and poultry producers that had to depopulate as a result of plant closures, and contract growers who have faced loss of income,” said House Agriculture chairman Collin Peterson.
The USDA website for CFAP2 is available here.