Trade

Trump’s Second Farm Bailout is Coming

JM Ashby
Written by JM Ashby

Recent reports told us the Trump regime was considering another bailout for farmers in which the federal government would purchase crops and donate them to poor communities in other countries, but for a variety of legal reasons that was never going to work.

The White House has now abandoned that idea and announced that Trump's next bailout for farmers will be structured just like his previous bailout.

From CNBC:

The Trump administration announced a $16 billion trade aid program for American farmers that includes a three-prong trade aid package for American farmers who have been hurt by the U.S. trade war with China.

The centerpiece of the program is cash payments totaling $14.5 billion to producers of a variety of crops as well as dairy and pork producers impacted by retaliatory tariffs. U.S. tariff revenue collected by the Treasury would be used to support the payment program, according to the U.S. Department of Agriculture.

Farm income dropped by over $11 billion during the first quarter of this year, wiping out more than the total value of Trump's previous bailout for farmers which has paid out less than $9.7 billion including just $8.5 billion in direct payments to farmers.

With no end in sight, and with Trump's trade war actually escalating, I don't see any reason to expect that farm income will recover during the second quarter or at any other point this year. And I think we can reasonably infer that this second, larger bailout of $16 billion will underwhelm and could possibly be dwarfed by total losses during the current calendar year.

Regarding the mechanics of this second bailout -- using revenue generated by Trump's tariffs to pay for it means American consumers will pay for it.

American consumers who purchase fresh produce, pork, or dairy for themselves will actually pay for each of those items twice; once at the grocery and once through a hidden tax (Trump's tariffs) on other goods.

It would be accurate to say that American consumers are being deputized into generating artificial demand for farmers. It's quite socialist for the government to replace the market with state controlled funds that were appropriated from the market.

  • Draxiar

    Farmer: You just set fire to my house!
    Trump: Here’s a tent…good luck.

  • muselet

    What’s the over/under on when Donald Trump assigns Jared Kushner to solve the American farming crisis?

    –alopecia