Farmers Confused By Trump Trade Aid Payments: 'It Makes No Sense'

Farmers are confused by the U.S. government's method of distributing bailout money for damages caused by the ongoing trade war with China, according to a Reuters report released on Friday.

The article notes that a Texas cotton farmer is receiving $145 an acre for financial damage related to President Donald Trump's trade policies with China. But Betsy Jensen, a soybean farmer in Minnesota is receiving $35 an acre. China purchased over half of all U.S. soybean exports in 2017, before the trade war began, but much less corn, and soybean farmers have been particularly hard hit in the dispute.

"It makes no sense," Jensen told Reuters.

The disparity in payments traces to the system for allocating the funds. In the first round of bailouts, a total of $12 billion which the Trump administration announced in 2018, farmers received money based on estimated lost sales by crop type. Soybean farmers received magnitudes more than farmers who were less impacted by the trade policies.

For the second round of bailouts, $16 billion authorized earlier this year, the payments are distributed based on the overall impact on agriculture in a particular county. The USDA has calculated the estimated impact based on export potential over the past 10 years.

The method for allocating the aid -- which has been repeatedly touted by the president -- highlights the difficulties of managing the fallout from the trade war.

Although the administration implemented measures to prevent corporations from disproportionately benefiting from the $16 bailout, which occurred in the first round of aid, the Environmental Working Group said that the USDA's $16 billion bailout would still make rich farmers richer, thereby hurting small farmers.

Agricultural organizations, like the Illinois Farm Bureau, which represents growers in the state that produced the most bushels per acre of soybeans last year, have expressed concerns about the lasting impact of the tensions between the world's two largest economies.

While the Bureau has expressed gratitude for the payments to help mitigate the damages caused by the trade war, President Richard Guebert, Jr. has described the bailouts as a temporary solution and vocalized worry about long-term damage to established markets and trading partners.

China has responded to Trump's escalations in the trade war by targeting agricultural imports. And some organizations in the industry appear to be tiring of the economic damage caused by the trade war.

Last month, leaders of farm groups challenged Agricultural Secretary Sonny Purdue at a forum in Minnesota.

"We are not starting to do great again," Brian Thalmann, the president of the Minnesota Corn Growers Association, said, referring to Trump's claim that farmers are starting to do great. "We are starting to go down very quickly."

At the end of last month, Vice President of the North Dakota Farmers Union Bob Kuylen told MSNBC that "we lost pretty much all of our markets since Trump took over." Some Republican politicians have issued rare rebukes of the commander-in-chief over his trade policies.

Despite signs of discontent with the president's trade policies, farmer support for Trump remains high. Although an unweighted Farm Journal Pulse survey found that support for Trump dropped eight percentage points from July to August, 71 percent still say they back the president. Forty-three percent said they "strongly approve" of his handling of the job -- a figure that surpasses his overall approval rating from voters across the country.

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A farmer holds soybean from the 2018 harvest, on May 5, at her farm in Scribber, Nebraska. JOHANNES EISELE/AFP/Getty Images
Farmers Confused By Trump Trade Aid Payments: 'It Makes No Sense' | News