Assistance Payments May Be More Evenly Distributed This Go Around

Brian German Agri-Business, Funding

The latest round of assistance payments may be more evenly distributed compared to last year’s trade relief package.  An additional $16 billion has been committed by the Trump Administration for the purpose of assisting farmers impacted by the Chinese tariffs.  A total of $14.5 billion will be dispensed in the form of direct payments.  University of Illinois agricultural economist, Scott Irwin told the Associated Press that the new method for payment calculation may result in a more even distribution of financial assistance. 

assistance paymentsThe last round of assistance payments issued to farmers last year were based on a per-bushel rate.  The more recent trade relief funding will be based on payment rates that are decided on a county-per-county basis.  The rates are established using information such as recent production history for the various commodities produced in a specific county, combined with the estimated trade damage each commodity has suffered due to the tariffs.  The more localized approach to trade payment dispersal is said to reduce the disparity in trade relief funding that was discovered in the previous round of farm assistance.

A recent study from the Environmental Working Group (EWG) indicated that the first round of aid payments appears to have been unevenly distributed, with more than half of the payments being received by the top ten percent of farms.  Using data obtained from the U.S. Department of Agriculture, EWG discovered that the top one percent of recipients were awarded an average of more than $180,000 dollars, while the bottom 80 percent received less than $5,000 dollars for support. 

The ongoing trade turmoil between the United States and China has made a significant impact on farmers and ranchers.  The Trump Administration has attempted to mitigate the damage incurred on the agricultural sector by offering trade assistance packages.  The report from EWG highlighted a concern that the subsidy payments that are being provided could create issues with the World Trade Organization, which has established limitations on farm subsidies.

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Brian German

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Ag News Director, AgNet West