September 21, 2020

 

USDA to release second round of COVID-19 aid, up to US$14 billion

 


The United States Agriculture Department (USDA) will pay up to US$14 billion to US farmers in its second round of COVID-19 aid, Reuters reported.

 

The measure, announced by US President Donald Trump, will cover farmers that grow major crops such as corn, soybeans and wheat, as well as livestock and diary farmers.

 

It follows an initial US$19 billion relief programme in April to assist US farmers against food supply chain disruptions and reduced demand from restaurants due to the pandemic. Less than US$10 billion has been paid out from the initial aid to date.

 

Sonny Purdue, US Agriculture Secretary, said the programme better meets of those affected by the pandemic following feedback from farmers, ranchers and agricultural organisations.

 

According to a Reuters analysis of USDA and the American Farm Bureau Federation figures, based on the government's latest harvest forecasts, US farmers are set to receive US$0.23 a bushel for corn, or US$3.427 billion, and US$0.31 a bushel for soybeans, or US$1.337 billion.

 

Corn, soybean and wheat farmers can also apply aid at US$15 per acre.

 

The National Pork Producers Council said swine farmers will be paid US$23 per swine. Swine producers received US$1.6 billion in total in the first COVID-19 aid round.

 

The USDA said corn, soybean and wheat farmers are eligible for COVID-19 aid as the national average price for these major crops dropped about 5% between mid-January to mid-June this year.

 

Prices for these major crops have surged from end-June with higher demand from China resulting in the soybean futures market Sv1 pushed to its highest in more than two years. Corn Cv1 was trading at its highest since March, while wheat Wv1 reached a five-month record.

 

The new plan will add close to 100 specialty crops and eases aid restrictions for these crops.

 

The Trump administration has been criticised over the US$28 billion compensated to farmers in 2018 and 2019 over lost sales during the US - China tariff war.

 

Scott Faber, senior vice president of government affairs at the Environmental Working Group, said the new measure could be as ineffective as previous aid packages, where too much money is channeled to farmers that don't need it, while farmers that do need the aid face economic collapse.

 

The latest COVID-19 aid package will be funded mostly by the Commodity Credit Corp, a programme established during the depression era to support farm income. Funds from the Commodity Credit Corp do not require Congress approval.

 

-      Reuters