(Bloomberg) —

President Donald Trump announced a $19 billion bailout package for farmers hurt financially by the coronavirus crisis.

The aid plan includes $16 billion in direct payments to farmers to boost their incomes, along with $3 billion in government purchases of meat, dairy products and other foods, the president said Friday at a White House briefing. The Agriculture Department will receive another $14 billion in July for further assistance.

“This will help our farmers and our ranchers, and it’s money well deserved,” Trump said.

The combination of direct payments to farmers and bulk government purchases of commodities parallels the approach the Trump administration followed in its $28 billion agriculture trade bailout over the past two years. Farmers and rural communities are a critical part of Trump’s political base as he seeks re-election.

The commodities purchased will be distributed through food banks and other nutrition programs serving the poor, school children and the elderly.

USDA Payments

The USDA will make direct payments of $5.1 billion to cattle producers, $2.9 billion for dairy and $1.6 billion for hogs, according to a statement from Senator John Hoeven, chairman of the Senate Agriculture Appropriations subcommittee.

Another $3.9 billion will go to producers of row crops such as soybeans, corn and cotton, while $2.1 billion is earmarked for producers of specialty crops such as fruits and vegetables. And $500 million will go for other crops, Hoeven said.

The Agriculture Department will begin the food purchases by buying $100 million of fruits and vegetables per month, and $100 million per month each of dairy and meat, the department said in a statement.

The National Pork Producers Council, which estimates hog farmers will lose $5 billion in revenue from the crisis this year if prices don’t improve, said in a statement that the aid package won’t be enough.

“We fear the lifeline so desperately needed will fall short of what is truly needed. While the direct payments to hog farmers will offset some losses for some farmers, they are not sufficient,” A.V. Roth, the council’s president and a hog farmer from Wauzeka, Wisconsin said in a statement. “Many generational family farms will go bankrupt without immediate financial aid.”

‘Grateful’ for Aid

American Farm Bureau Federation President Zippy Duvall said he was “grateful” for the aid.

The closing of restaurants, school cafeterias and other commercial food service operations has upended the market for agricultural products, particularly dairy, meat and produce. The food-service industry is a disproportionate buyer of cheese, butter, meat, fresh fruits and vegetables. Farmers are dumping as much as 8% of their milk, according to the Dairy Farmers of America cooperative.

A shutdown of several slaughterhouses because of virus outbreaks among employees has further disrupted hog and cattle farmers’ ability to sell their livestock. At the same time, an oil price war forced ethanol plants to shut down, further depressing corn prices.

Though advocates had sought aid for ethanol producers, the package doesn’t include any assistance for biofuels, Agriculture Secretary Sonny Perdue said in a conference call with reporters.

The department aims to begin sending payments to farmers by the end of May, Perdue said.

Funding for the aid was included in the Coronavirus relief package Congress passed last month.

(Updates with details from Perdue beginning with 11th paragraph)

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