The U.S. Department of Agriculture (USDA) has approved $28 billion in market facilitation payments to American farmers to offset negative effects of the U.S.-China trade war, with about $19 billion paid out through the end of 2019 and the rest coming this year.
And according to Hope Pjesky, a rancher and wheat farmer from Oklahoma, not only has that amount not been enough for most farmers — it wasn’t even worth it.
“After all that’s happened with trade recently, I don’t think those will continue in future years,” Pjesky said on Yahoo Finance’s On the Move. “And I don’t think that most farmers really thought that it was worth it. It wasn’t. I know the big overall number looks huge to people, but it really wasn’t enough to help most people.”
Overall, according to an analysis by NPR, about 100,000 individuals collected roughly 70% of the payments through July 2019. The payments are reportedly based on production, so bigger farms get more money.
“We did get some of the farm aid, but it really wasn’t enough to help very much in either year of it,” Pjesky said. “The first year it was so much for each bushel of wheat that we produced, and it was a very small amount. And then the second year, it was a per-county payment, and I believe ours was $20 or $22 per acre, which is very small as far as what the costs are going into producing the product that we produce.”
A report from Bloomberg noted that the USDA’s calculations “likely overstates the conflict’s financial impact on most other farm products, though for a few commodities it may understate the true impact.”
‘If the government doesn’t pay us, we’re done’
Meanwhile, farm debt is at record-high levels as the trade war continues. Chapter 12 farm bankruptcies increased by 24% from 2018 to 2019, and is at its highest level since 2011. The American Farm Bureau is projecting that farm debt will have reached $416 billion for 2019.
Although soybean farmers have arguably been hit hardest by the trade war, other parts of agriculture have also taken heavy blows. Dairy farmers, particularly in Wisconsin, are on the brink of an existential crisis, while wheat farmers have been losing their Chinese customers to countries like Russia.
So as 2020 hits full swing, American farmers are increasingly reliant on a government bailout while business deteriorates further amid the ongoing trade war.
"If the government doesn't pay us, we're done," North Dakota farmer Justin Sherlock recently told Reuters.
Adriana is an associate editor for Yahoo Finance. She can be reached at firstname.lastname@example.org. Follow her on Twitter @adrianambells.