US President Donald Trump has unveiled a $12bn (£9bn) farm aid package aimed at helping farmers impacted by low crop prices and the administration’s ongoing trade wars.
Most of the money – $11bn – is earmarked for one-time payments to farmers for row crops as part of the agriculture department’s Farmer Bridge Assistance programme, with another billion reserved for crops not covered by the programme.
While farmers have broadly supported Trump, the agriculture sector has been disrupted by trade disputes during his second term, particularly with China.
Also on Monday, Trump threatened to hit Mexico with an additional 5% tariff in a row over water supplies to US farmers.
The White House says the aid package will help farmers suffering from “years of unjustified trade actions” and accumulated inflation.
Trump made the announcement during an event at the White House, alongside Treasury Secretary Scott Bessent and Agriculture Secretary Brooke Rollins.
Members of Congress and corn, cotton, sorghum, soybean, rice, cattle, wheat and potato farmers were also in attendance.
“Maximising domestic farm production is a big part of how we will make America affordable again and bring down grocery prices,” Trump said.
Sorghum and soybean farmers have been hit hard by the Trump administration’s trade dispute with China, the greatest importer of their crops.
According to a White House official, the payments are intended to help farmers market this year’s harvest and plan for next year’s crops, as well as act as a bridge until the administration’s policies “deliver a better market environment”.
Rollins said the last $1bn would be held back to help officials understand the state of “specialty crops” and ensure that the government is “making every forward moving position that we need to”.
When asked if further farm aid packages were planned, Trump said “it depends” on how the market develops.
“The farmers don’t want aid,” he said. “They want to have a level playing field.”
The announcement comes as polls suggest Americans are increasingly concerned about rising costs – an issue which Trump has at times characterised as a “hoax” and a “con job” perpetrated by Democrats.
It also followed complaints from US farmers after they lost access to customers in China as a result of Trump’s trade policies.
For example, China is the world’s biggest market for soybeans and has in recent decades been a major buyer from the US.
But Beijing effectively shut the door on American soybean imports for months after Trump hit Chinese goods with new levies earlier this year.
Later on Monday, Trump threatened to impose a new 5% tariff on Mexico, accusing it of violating an agreement that gives American farmers access to water.
“It is very unfair to our US Farmers who deserve this much needed water,” he posted on social media.
Trump was referring to a more than 80-year-old treaty that grants the US water from Rio Grande tributaries.
For decades the US has accused Mexico of not meeting the terms of the agreement.
Mark Legan, a livestock, corn and soybean farmer in Putnam County, Indiana, told the BBC that the government aid would “help our bottom line”
As crop prices have fallen and profitability has plummeted, he could use the funds to help replace tractors and other machinery – investments he has put on hold.
During his first administration, Trump also provided aid packages to farmers, including $22bn in 2019 and another $46bn in a 2020 package that also included relief from the Covid pandemic.
Mr Legan said he believed the new package would be similar to what he received during the first Trump term, in that it would not resolve persistent cost pressures and shrinking export markets, he said.
“The problem is still that we have high costs of production,” Mr Legan said, pointing to record high prices for crop protection chemicals and seeds.
“While some markets have opened up, we’re still not back to exporting as much ag products as we have in the past,” he added.
Another Illinois farmer, Brad Smith, heard news of the $12bn package while at the Illinois Farm Bureau State Convention in Chicago.
“None of us really love it, but we’re not in a position where we can be turning it down,” he said. “We hope we can reduce the need for anything like this going forward.”
If he does receive funds from the government, the money will likely be in his hands for three days, he said, before spending it to clear outstanding bills and hopefully buy seeds, chemicals and fertilisers for next year’s crop.
Mr Smith said that distributing government aid to farmers who need it the most, rather than to larger farms, has been a challenge in the past.
Following an October meeting between Trump and Chinese leader Xi Jinping in South Korea, the White House said China had committed to buying at least 12 million metric tonnes of US soybeans by the end of 2025, followed by 25 million metric tonnes annually for the next three years.
So far, China has only purchased approximately one-quarter of that amount.
Those purchases, however, have accelerated, and Bessent told CBS, the BBC’s US partner, that China is likely to meet the goal by the end of February.
Asked why a farm aid package was necessary, Bessent said “the Chinese actually used our soybean farmers as pawns in the trade negotiations”.
“We are going to create this bridge because… agriculture is all about the future,” he said. “You’ve got to start financing for planning next year when things will be very good.”
On Saturday, he signed an executive order creating food supply chain security “task forces” and assessing “anti-competitive behaviour” in the agricultural sector.
