On Oct. 19, Trump announced during a Kansas political rally an $8 billion relief program that will issue one-time payments to farmers affected by high diesel prices. The program will be overseen by the U.S. Department of Agriculture (USDA) and administered through the Farm Service Agency. Will it be enough?
The Trump administration’s latest bailout for farmers
The Harvest Fuel Relief program will rely on a formula based on the planted crops and the total acreage used during the farming process. The payouts are intended to cover only “a portion” of farmers’ losses, so they won’t be made whole.
Total payment rates for certain commodities will be announced in November, with others following at a later date, according to the USDA, meaning it’s still too early to estimate the size of the payouts.
Yet acquiring diesel fuel is only one part of the price tag behind harvesting a crop, which also incorporates pesticides, dryer fuel and repairs as well, per the Center for Commercial Agriculture at Purdue University. Analysts are grim on the outlook: The current diesel supply crunch stemming from the Iran war isn’t expected to abate going into next year.
The American Farm Bureau Federation (AFBF) projects that elevated prices will add about $8 in extra diesel costs per acre for corn farmers. Its analysis shows the average American corn farm spans 279 acres with an estimated 3.07 gallons of farm diesel used per acre.
Given the increase in the price of farm diesel — separate from on-road diesel used by highway trucks — the AFBF projects an extra $2,227 in charges for farmers, solely from the fuel. The federal rescue initiative will have to be substantial to meaningfully erect a bridge for farmers’ worsening economic situation.
‘We need genuine efforts to help farmers’
Some farm groups were critical of the last-ditch aid program. The Iowa Farmers Union, which has endorsed Iowa’s Democratic candidate in the upcoming midterms, blamed the Trump administration for the high cost of diesel and fertilizer.
“Farmers never should have been put in this position. A Band-Aid response now, 2 weeks before the election, doesn’t fix the problem,” said Iowa Farmers Union President Aaron Lehman in an Oct. 20 statement. “We need genuine efforts to help farmers now while fixing the real causes of our current situation.”
Joseph Zeballos-Roig is a policy and politics journalist based in Washington D.C with a focus on economics. He is experienced in connecting the significance of events in the capital to the lives of everyday Americans whether its taxes, tariffs, interest rates or federal programs.
