The Trump administration’s new $16 billion round of trade-war aid for farmers will dramatically shift the bailout toward corn and cotton growers, according to an analysis by the U.S. Department of Agriculture’s former chief economist.
Last week, the USDA released payment rates for each U.S. county, with all farmers in the area to receive the same rate per acre planted. But the agency hasn’t revealed assessments of trade damage each commodity sustained from the tariff wars or other details of how the local rates were determined.
Payments to cotton growers will double to $1.1 billion from $554 million last year, while corn growers will get $5.1 billion, surging from $192 million last year, Glauber projected. Soybean growers’ payments will drop to $5.6 billion from $7.3 billion last year, according to the simulation.
“It goes more toward corn and cotton, but the payments are bigger this year so it doesn’t take that much away from soybeans,” said Glauber, now a senior research fellow at the International Food Policy Research Institute in Washington. The Trump administration announced plans for $16 billion in overall trade assistance this year, up from $12 billion last year.
In much of the Midwest, farmers grow both corn and soybeans so the increase in payments for acres planted with corn would more than offset a decline in aid for soybeans in many cases.
Corn growers heavily criticized last year’s trade payments, based on crop production. Corn received a penny per bushel in 2018 versus 1.65 per bushel for soybeans. The county payment rates the USDA announced last week clouded such direct comparisons.
Wheat farmers this year will receive $1.6 billion, a major increase from $238 million last year, Glauber found. Payments for sorghum would drop to $300 million from $314 million last year.
Agriculture incomes have been depressed in the wake of China’s retaliatory tariffs, which hurt demand for everything from cotton to pork to soybeans. For Trump, appeasing his rural-voter base has become crucial ahead of 2020 elections.
This year’s trade aid sets a per-county rate based on the blend of crops grown in the area, with payments ranging from $15 to $150 an acre.
USDA spokesmen didn’t immediately respond to a request for comment.