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Donald Trump funnels record subsidies to farmers before election day

Last Updated 12 October 2020, 21:24 IST

For the American farmers whom President Donald Trump counts on for support, the government money is flowing faster than ever.

Federal payments to farmers are projected to hit a record $46 billion this year as the White House funnels money to Trump’s rural base in the South and Midwest before Election Day.

The gush of funds has accelerated as the President looks to help his core supporters who have been hit hard by the double whammy of his combative trade practices and the coronavirus pandemic.

According to the American Farm Bureau, debt in the farm sector is projected to increase by 4% to a record $434 billion this year and farm bankruptcies have continued to rise across the country.

The agriculture sector is expected to receive the largest government contribution to farm income since its previous record in 2005, according to the University of Missouri’s Food and Agricultural Policy Research Institute.

The breadth of the payments means that government support will account for about 40% of total farm income this year. If not for those subsidies, U.S. farm income would be poised to decline in 2020.

“There are both economic and political motivations for these payments,” said Patrick Westhoff, who directs University of Missouri’s agriculture research center.

Farmers have been clobbered financially during the past two years, as Trump’s trade wars with China and Europe led to tariffs on U.S. agricultural exports, including corn, soybeans, lobsters and peanuts.

Then, this year, the pandemic interfered with global supply chains, and restaurant and hotel closures sapped demand. Farmers were forced to dump milk into manure pits and destroy millions of pounds of beans and cabbage.

“Nearly every major sector of the farm economy will have lower cash receipts this year compared to last year, and total cash receipts will be the lowest since 2010,” John Newton, the American Farm Bureau’s chief economist, wrote in a report on the state of the industry last month.

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(Published 12 October 2020, 21:24 IST)

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