Just the Facts

Five Facts on President Trump’s Proposal to Bail Out Farmers

By No Labels
July 31, 2018 | Blog

On July 24, the Trump administration announced plans to provide up to $12 billion in emergency relief for farmers who have been negatively impacted by recent trade disputes with China, Canada, Mexico, and the European Union.  While the aid could help some farmers and farm communities, it has faced harsh criticism as it is viewed as a short-term fix to a much larger problem.  Here are five facts on President Trump’s proposal to bail out farmers.

President Trump has announced a $12 billion emergency aid package to help farmers who have been affected by tariffs on their crops

This “bailout” is in response to farmers’ concerns that America’s trade disputes have significantly hurt their bottom line— with corn, soybean, and wheat farmers having already lost an estimated $13 billion. Secretary of Agriculture Sonny Perdue explained that this package is “a firm statement that other nations cannot bully our agricultural producers to force the United States to cave in.”

The bailout will include direct payments to affected farmers, the purchases and distribution of agricultural surplus, and public-private partnership to create new export markets abroad

The funds provided to farmers will come from the Commodity Credit Corporation (CCC), which was created during the Great Depression and helps protect American farms by buying their crops. All the food purchased by the government would be distributed to food banks and nutrition programs. According to a USDA spokesman, this is the first time CCC funding has been used to compensate for losses sustained because of trade. Finally, the U.S. Department of Agriculture will facilitate a trade promotion program to develop new markets for American agricultural exports. This program does not require congressional approval, as all funding coming from the CCC has already been authorized in the annual budget.

Congressional response to the farmer bailout has been largely negative

Sen. Bob Corker (R-TN), described the bailout as “an incoherent policy” attempting to solve a problem without sitting down and working it out.  Sen. Charles Grassley (R-IA) gave a somewhat similar take, stating the subsidies are “encouraging for the short term” but “what farmers in Iowa and throughout rural America need in the long term are markets and opportunity not government handouts.” Sen. Ron Johnson (R-WI) provided perhaps the most blunt response, praising the president’s “call for reciprocal trade and his [President Trump’s] effort to stop theft of American intellectual property,” while comparing the proposed bailout to a “Soviet-type of economy.”

The National Farmers Union has publicly denounced the Trump Administration’s plan, calling it “a short-term fix to a long-term problem”

Zippy Duvall, the president of the American Farm Bureau Federation, agreed, “This announcement is substantial, but we cannot overstate the dire consequences that farmers and ranchers are facing.” Iowa farmer Dave Struthers stated, “We would prefer trade not aid,” and the executive director of Farmers for Free Trade, Brian Kuehl, put it simply, “The best relief for the president’s trade war would be ending the trade war.”

Trump defended his plan both on Twitter and in a speech at the national convention of the Veterans of Foreign Wars in Missouri

The president tweeted “Tariffs are the greatest! Either a country which has treated the United States unfairly on Trade negotiates a fair deal, or it gets hit with a Tariff.” He continued to reassure critics and those affected by stating, “These countries have been ripping us off for decades. It doesn’t take a week [to fix]. It takes a little longer. But we’re going to get it done.” The president promised that if the American people trust him, his strategy will eventually prove effective, citing his recent success in a potential trade deal with the European Union.

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