A Bailout For US Farmers? Federal Government To Give $19 Billion Payments Amid Coronavirus, Trade War Fallout

President Trump on Friday announced a $19 billion relief program for the agricultural sector amid the ongoing coronavirus outbreak, with $16 billion allocated in direct payments to farmers.

“American agriculture has been hard-hit, like most of America, with the coronavirus, and President Trump is standing with our farmers and all Americans to make sure that we all get through this national emergency,” Agriculture Secretary Sonny Perdue said at a White House press briefing.

The Department of Agriculture will also buy $3 billion in farm goods that will be distributed to food banks, churches and aid groups across the country. The payments will be financed from recent coronavirus legislation passed by Congress, along with existing funds.

A report released by the Food and Agricultural Policy Research Institute at the University of Missouri revealed that U.S. farmers will lose $20 billion in net income in 2020, as they grapple with the coronavirus and the ongoing trade war between the U.S. and China.

“We’re looking at a situation with a lot sharper – or very big decline in farm income relative to what had been expected," Patrick Westhoff, the director of the Institute said. “It’s a much tougher time for farmers than we would have guessed a few months ago.”

The U.S.-China trade war had previously devastated American farmers, with Trump unveiling a $16 billion bailout for the sector in May. In January, Washington and Beijing agreed to a “Phase One” trade deal, with China buying $200 billion U.S. goods over two years, in exchange for the Trump administration calling off planned tariff increases on Chinese products.

Farming annually contributes about $133 billion to the gross domestic product. In 2019, record floods devastated parts of the Farm Belt. There has also been a rise in the suicide rate for farmers.

Farmers are an important source of political support for Trump. A Farm Pulse Journal poll in February showed 83% of farmers approve of Trump, with 64% strongly approving. In 2016, Trump won Iowa convincingly after Democrats had won the state in six of the previous seven presidential elections.

The United States currently has more cases of the virus than any other country in the world, with the majority of states shutting down non-essential businesses. As of Saturday at 10:15 a.m. ET, there are 706,830 coronavirus cases and 37,086 deaths in the U.S.