USDA readies $14B more in payouts to farmers

By Ryan McCrimmon 09/18/2020 11:23 AM EDT

The Trump administration will begin paying farmers and ranchers a new round of coronavirus aid starting on Monday, which will include money for certain wheat growers who were left out of the first round of payments.

How it works: The additional $14 billion is on top of the roughly $20 billion in agricultural aid programs that have been underway since May. The money again stems from the stimulus package that Congress passed in March.

The Agriculture Department said that payments to farmers will be calculated by various methods depending on the commodity. For instance, farmers of oats and peanuts will receive a flat rate while corn and soybean growers will be paid based on losses.

Poultry farmers will receive payments based on 75 percent of their 2019 production for broilers and eggs.

Reimbursement for cattle, hogs, lambs and other livestock will be pegged to the farmer or rancher’s maximum inventory on a date selected by the producer between April 16 and Aug. 31.

Payments will be capped at $250,000 per person or entity for all farmers.

Key context: President Donald Trump announced the additional coronavirus relief during a campaign rally in Wisconsin on Thursday night.

As taxpayer aid to farmers has skyrocketed under Trump, the president has touted the payments as one of his most important gifts to agriculture, which is a key piece of his political base. Government payments to farmers and ranchers are up 65 percent in 2020 compared to last year, according to USDA data earlier this month.

More than one-third of farm income this year is expected to be from federal payouts. Agricultural economists have warned that the industry is becoming overly reliant on government payments, and that the massive aid programs will be increasingly difficult for Washington to unwind in future years.

The money has helped the industry weather Trump’s trade war and market disruptions during the pandemic, but Democrats and watchdog groups have also questioned the fairness of how the money is distributed.

Agriculture Secretary Sonny Perdue said on Friday that USDA listened to feedback from the industry and “developed a program to better meet the needs of those impacted.”

What’s next: Producers can begin applying for aid on Monday. The White House has also asked Congress to include language in an upcoming stopgap spending bill to ensure that USDA has adequate borrowing authority to keep payments flowing to farmers after September.

Separately, lawmakers and the White House remain deadlocked over a new stimulus package that was expected to include even more money for agriculture producers.

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