U.S. agriculture officials are preparing to roll out another $16 billion in aid to farmers hurt by the Trump administration's trade war with China, with payments to begin next month.
The second round of tariff-aid payments will give time for President Donald Trump to strike trade deals, Agriculture Secretary Sonny Perdue said on a conference call on Thursday that gave details of the new package.
Payments are based on similar damage criteria as a first round and are designed to avoid distorting planting decisions. But rather than rates based on crop type, the program uses a blend of crops grown in each county, with corn growers getting the same rate as wheat for example. The rate will range from $15 to $150 an acre, with a limit of $500,000 per person.
American farmers are struggling as losses from trade disputes pile on top of woes including wild planting weather and years of global overproduction that has kept prices low. U.S. farm income dropped 16% last year to $63 billion, about half the level it was as recently as 2013. For Trump, appeasing his rural-voter base has become crucial ahead of 2020 elections.
Trump announced the new aid package in May as he stepped up his trade war with China by threatening new tariffs against the Asian nation. At the time, the USDA said growers of crops including corn, soybeans and wheat will receive a payment based on a single county rate multiplied by a farm's total plantings to those crops in aggregate in 2019
With aid flowing to farmers, Trump has avoided erosion of his political support in rural areas. In June, 54% of rural voters approved of Trump's job performance versus a national approval rating of 42%, according to a Gallup survey of 701 self-identified rural voters.
U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are set to travel to China Monday for the first high-level, face-to-face trade negotiations between the world's two biggest economies since talks broke down in May.
This is article was written by Mike Dorning, a reporter for Bloomberg.