On Monday, administration Donald Trump unveiled a $12 billion farm aid package, which will help farmers who have been having trouble selling their goods due to growing expenses since the administration increased tariffs on China as part of a larger trade battle.
At a White House roundtable with Agriculture Secretary Brooke Rollins, lawmakers from farm states, and farmers who praised him for the assistance, he presented the plan on Monday afternoon.
Cordt Holub, an Iowa farmer, told Trump, "With this bridge payment, we'll be able to farm another year," at the event. Rollins estimated the program's immediate value at $11 billion, which the White House claimed would provide row-crop farmers with one-time payments.
As the administration tries to better grasp the situation for those farmers, an additional $1 billion will be set available for specialized crops, according to Rollins. According to her, the help will be moved by the end of February.
"We looked at how they were hurt, to what extent they were hurt," Trump added, describing how the government determined the package's size. According to Trump, tariff revenue will be used to fund the program.
The USDA will calculate a per-acre payout for each type of crop later this month using a formula that assesses production expenses.
Only organizations earning less than $900,000 annually will be eligible for assistance, with payments capped at $155,000 per farm or individual.
This will restrict payments to large farms, which was a criticism of the farm assistance that Trump provided during his first term. Farmers have supported Trump politically, but his tough trade policies and constantly shifting tariff rates have drawn more criticism due to the effects on the agricultural industry and general consumer concerns.
The help is the administration's most recent attempt to allay voters' concerns about growing expenses and defend Trump's economic stewardship.
Although Trump has occasionally dismissed the affordability issue, he is scheduled to visit Pennsylvania on Tuesday to discuss how his administration is attempting to address a crucial issue for voters.
Purchases from China have been slow. Because more than half of those crops are exported annually, with the majority of the harvest going to China, soybeans and sorghum were most severely impacted by Trump's trade battle with China.
The White House announced in October that Beijing had committed to purchasing at least 12 million metric tons of American soybeans by the end of the year, plus an additional 25 million metric tons annually over the next three years, following Trump's meeting with Chinese leader Xi Jinping in South Korea.
Although China is the world's biggest buyer of soybeans, it has been gradually moving its purchases to Brazil and other South American countries in recent years.
Since Trump announced the deal at the end of October, China has bought almost 2.8 million metric tons of soybeans. Treasury Secretary Scott Bessent has stated that China is on schedule to reach its objective by the end of February, which is two months later than the White House had pledged.
However, that is just roughly a fourth of what administration officials claimed China had promised. The $12 billion aid package is almost equal to half of all U.S. farm goods exports to China in 2024 and all U.S. soybean exports to China in 2024.
Farmers claim that their expenses have increased. Farmers are grateful for the aid package, but they claim it's probably just a down payment on what's required and that government assistance doesn't address the underlying issues of skyrocketing costs and unstable markets.
In 2019, at the beginning of his trade war with China, Trump provided farmers more than $22 billion in aid payments; in 2020, he gave them about $46 billion, albeit that year also included funding tied to the COVID pandemic. Farmers said they want to sell their produce for a profit rather than depend on government assistance to get by.
"That's a good place to start, but I believe we need to start exploring other funding options and expanding our markets. "We want to be able to earn a living from that," stated Caleb Ragland, president of the American Soybean Association and a farmer from Kentucky.
Due to their limited ability to borrow against the equity in their farms, younger farmers and those who rent rather than own their land are most vulnerable.
There may be more industry consolidation if farmers are struggling to make ends meet this year, with the number of smaller family farmers continuing to decline and large industrial farms expanding.
Robb Ewoldt, an Iowa farmer, is in a challenging situation since he only owns 160 of the 2,000 acres he farms. He claims that in order to raise some money, he is selling some of his unnecessary equipment and investigating the possibility of taking on some nighttime trucking gigs.
"It is to the point where I don't want to saddle my kid with the kind of stress that my wife and I are under right now," Ewoldt stated.
However, Darin Johnson, a fourth-generation Minnesota farmer, expressed greater optimism that the majority of farmers will be able to weather this most recent trade conflict.
"A lot of farms are pretty well-established and they have the equity to be able to still keep borrowing money to get through tougher times like this," Johnson stated. Additionally, Trump has faced pressure to address the skyrocketing cost of beef.
Although he hasn't offered any proof to support his allegations, Trump has requested the Department of Justice to look into foreign-owned meat packers he believes are raising the price of cattle.
Trump issued an executive order on Saturday instructing the Federal Trade Commission and the Justice Department to investigate "anti-competitive behavior" in food supply chains, including equipment, fertilizer, and seed, and to think about enforcing new rules or initiating enforcement action.
