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Perdue: Chance of more trade aid is 'less than 10%'

Mike Wilson Sonny Perdue speaks at Commodity Classic 2019
Weak prices have stoked calls for a third round of trade assistance for farmers.

By Mike Dorning

U.S. Agriculture Secretary Sonny Perdue sees a “less than 10%” chance that U.S. farmers will get another round of trade aid this year, despite a tweet from President Donald Trump last month raising the possibility.

Weak prices for many farm goods despite Trump’s initial trade deal with China have stoked calls for a new round of assistance for farmers, including from the top-ranking Republican on the House Agriculture Committee, Mike Conaway of Texas.

“Unless something gives here very soon,” Conaway told Perdue during an appearance before the committee on Wednesday, another round of trade aid will be “absolutely vital to the survival of our producers.”

Trump already authorized a $28 billion bailout to cover trade-war losses in 2018 and 2019 for farmers, a key political constituency for the president as he seeks re-election this year. But the program has been controversial, with a price tag more than twice as large as the ultimate cost of the auto bailout after the 2008 financial crisis.

Trump said in a Feb. 21 tweet that he would provide more financial assistance “if our formally targeted farmers need additional aid until such time as” trade deals with China and other nations “fully kick in.”

But Perdue told the panel Wednesday that he expected China to fulfill a promise in the initial deal to purchase $36.5 billion in U.S. farm goods this year and warned farmers not to expect more aid. He returned to the theme in comments to reporters afterward, when he set the odds of more payments at less than 1 in 10.

“The president’s tweet had a big ‘if’ in the beginning,” Perdue told reporters.

The administration’s program was “a trade disruption program, a lack of exports, rather than a price support,” Perdue said. “Many people have confused that, that prices have not gone up, thus we need another one. And that was not the purpose.”

To contact the reporter on this story:
Mike Dorning in Washington at [email protected]
To contact the editors responsible for this story:
Joe Sobczyk at [email protected]
James Attwood, Pratish Narayanan
© 2020 Bloomberg L.P.
TAGS: Legislative
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