Farmers may need a third round of government aid next year if political infighting during the 2020 election cycle prevents the Trump administration from landing trade deals and reopening top export markets, the head of the largest U.S. farm lobby said Tuesday.
If Congress cannot ratify the United States-Mexico-Canada Agreement, then it and the Trump administration could find it difficult to finalize any trade deals with other large markets, including the European Union and Japan, said American Farm Bureau Federation President Zippy Duvall.
Farmers have struggled to stay afloat this year as top U.S. soybean buyer China curtails purchases. They are counting on other markets like Mexico and Europe to buy their agricultural goods.
“The deeper we get into this campaign season, the more difficult it might become” to get USMCA ratified or any trade deals done, Duvall said in an interview.
“Not because of the treaty itself, not because of the need itself, but just because of the rhetoric around the election,” Duvall said.
Tuesday, President Donald Trump formally kicked off his reelection bid and tweeted that the United States and China would restart trade talks.
Democratic lawmakers, who took control of the U.S. House in the 2018 election, have said they want to see changes to the USMCA trade deal.
Duvall said the Farm Bureau is growing concerned that farmers could potentially enter a third year with restricted access to key export markets — at a time when the farm economy already has been battered by low crop prices and extensive flooding.
The Trump administration has pledged as much as $28 billion in support for agriculture in two separate rounds, including making direct payments to farmers.
“If we’re not going to get USMCA finished, if we’re not going to get the solution to our problems in China or Japan, then we need to be talking about another payment to try to hold farmers over until that gets done,” Duvall said.
But how that would happen is unclear. One big hurdle is where the money would come from.
The first tranche, announced in 2018, provided up to $12 billion in aid.
That so-called Trump Bump to farmers was supposed to be a one-time occurrence. But earlier this year, the Trump administration announced plans to pay out up to $16 billion more.
All those funds came from the Commodity Credit Corporation, which was formed during the Great Depression.
But the group can borrow a total of $30 billion from the U.S. Treasury, according to the U.S. Department of Agriculture.
Given that cap, the Farm Bureau has started questioning whether there would be sufficient funds available for a third round if needed.