Trump unveils $12 billion farm aid package amid global trade disputes

US President Donald Trump has unveiled a $12bn (£9bn) farm aid package aimed at helping farmers hit by low crop prices and the government’s ongoing trade war.

Most of that money ($11 billion) is earmarked for one-time payments to farmers to grow row crops as part of the Department of Agriculture’s Farmer Bridge Assistance Program, with another $1 billion set aside for crops not covered by the program.

Although farmers generally support Trump, the agricultural sector has been disrupted by trade disputes, particularly with China, during his second term.

Also on Monday, Trump threatened to impose continuing 5% tariffs on Mexican water supplies to U.S. farmers.

The White House said the aid package would help farmers who have suffered from “years of unfair trade practices” and accumulated inflation.

Trump made the announcement at an event at the White House alongside Treasury Secretary Scott Bessant and Agriculture Secretary Brooke Rollins.

Members of Congress and corn, cotton, sorghum, soybean, rice, cattle, wheat and potato farmers also attended.

“Maximizing domestic agricultural production is an important part of our efforts to make America affordable again and lower grocery prices,” Trump said.

Sorghum and soybean growers have been hit hard by the Trump administration’s trade dispute with China, the top importer of sorghum and soybean crops.

The payments are intended to help farmers market this year’s harvest and plan next year’s crops, and act as a bridge before the administration’s policies “provide a better market environment,” according to White House officials.

Rawlings said the final $1 billion would be reserved to help officials understand the status of “specialty crops” and ensure the government “takes every position we need moving forward.”

Asked if further farm aid was planned, Trump said “it depends” on how the market develops.

“Farmers don’t need assistance,” he said. “They want a level playing field.”

The news comes as polls show Americans are increasingly concerned about rising costs — an issue Trump has sometimes described as a “hoax” and “con” perpetrated by Democrats.

U.S. farmers have previously complained about losing access to Chinese customers due to Trump’s trade policies.

For example, China is the world’s largest soybean market and has been a major buyer of the United States in recent decades.

But in the months after Trump imposed new tariffs on Chinese goods earlier this year, Beijing effectively closed the door to U.S. soybean imports.

Late on Monday, Trump threatened to impose new 5% tariffs on Mexico, accusing the country of violating an agreement to provide water to American farmers.

“This is deeply unfair to our American farmers who deserve the water they so desperately need,” he posted on social media.

Trump was referring to a more than 80-year-old treaty that allows the United States to obtain water from Rio Grande tributaries.

For decades, the United States has accused Mexico of not abiding by the terms of the deal.

Mark Legan, a livestock, corn and soybean farmer in Putnam County, Indiana, told the BBC the government aid would “help us improve our bottom line”

With crop prices falling and profitability plummeting, he can use the funds to help replace tractors and other machinery – investments he has put on hold.

During his first administration, Trump also provided a package of aid to farmers, including a $22 billion aid package in 2019 and another $46 billion in a 2020 aid package that also included aid in response to the coronavirus pandemic.

Legan said he believed the new package would be similar to the one he received during Trump’s first term because it would not address ongoing cost pressures and shrinking export markets.

“The problem remains that we have high production costs,” Mr. Legan said, pointing to record-high prices for crop protection chemicals and seeds.

“While some markets have opened, we still are not exporting as much agricultural produce as we used to,” he added.

Another Illinois farmer, Brad Smith, heard news of the $12 billion plan at the Illinois Farm Bureau state convention in Chicago.

“None of us really liked it, but we couldn’t say no to it,” he said. “We hope to reduce the need for such incidents in the future.”

If he does receive money from the government, he said, the money might be in his hands for three days and then used to settle outstanding bills and hopefully buy seeds, chemicals and fertilizer for next year’s crops.

Mr Smith said allocating government aid to farmers who needed it most, rather than larger farms, had been a challenge in the past.

After Trump and Chinese leader Xi Jinping met in South Korea in October, the White House said China committed to buying at least 12 million tons of U.S. soybeans by the end of 2025 and 25 million tons each year for the next three years.

So far, China has purchased only about a quarter of that amount.

However, those purchases have been accelerated, with Bessant telling BBC US partner CBS that China could achieve this goal by the end of February.

Asked why a farm aid package was needed, Bessant said, “The Chinese are actually using our soybean farmers as pawns in trade negotiations.”

“We will build this bridge because … agriculture is about the future,” he said. “You have to start financing your plans for next year, when things will be really good.”

On Saturday, he signed an executive order establishing a “task force” on food supply chain security and assessing “anticompetitive behavior” in the agriculture sector.