U.S. to begin second round of trade aid payments for farmers next week

FILE PHOTO: A farmer plows a field in the San Pasqual Valley near Escondido, California, United States August 30, 2016. REUTERS/Mike Blake

CHICAGO (Reuters) - The U.S. Department of Agriculture said on Friday it will begin making a second round of 2019 trade aid payments to U.S. farmers next week.

The payments are the second part of a three-tranche $16 billion aid package announced in May to compensate farmers for the U.S.-China trade war. China imposed tariffs on key U.S. agriculture exports including soybeans and pork last year after U.S. President Donald Trump’s administration levied duties on Chinese goods.

Farmers will now be eligible to receive 25% of the total payment expected, in addition to the 50% they already received in the first round of the 2019 package, the USDA said in a statement.

The payments “will give farmers, who have had a tough year due to unfair trade retaliation and natural disasters, much needed funds in time for Thanksgiving,” Agriculture Secretary Sonny Perdue said in the statement.

Sign-ups for the payments will run through Dec. 6, the statement said. If conditions warrant, the third tranche will be made in January 2020, it said.

The United States and China are trying to negotiate a phase one trade pact to end the tensions, but it is unclear when it might be finalized.

The U.S. government spent some $12 billion on trade aid for farmers in 2018 and some farm groups are already calling for a third year of compensation. USDA changed the formula it used to calculate aid farmers received, paying them different rates per county rather than per crop.

A group of Senate Democrats earlier this week criticized the program in a letter to USDA, saying the payments unfairly favored farmers in the South over those in the Midwest.

Reporting by Tom Polansek and Caroline Stauffer; Editing by Sandra Maler and Tom Brown