Many think that Trump is compensating farmers because they are especially hard hit by global retaliation to Trump’s tariff war. Or because they loom large on Trump’s electoral re-election map. Not so. Farmers are compensated because this is the only group that CAN be compensated without a broad Congressional action to overhaul the taxes and subsidies on a grand scale.

Curiously it is a quirky welfare measure, the Commodity Credit Corporation that was established by President Roosevelt in the 1930s to help farmers during the depression dustbowl which allows Trump to pay farmers directly – 28 billion to date. Here is the full explanation from an article in the Magazine “Successful Farming.” Here are the highlights:

“Agriculture is the only sector of the U.S. economy to receive a trade-war bailout and that’s because of the broad powers given to the CCC, created during the Depression to pay for New Deal farm subsidies. After revisions over the years, it can borrow up to $30 billion from the Treasury to support commodity prices and farm income. The Reagan administration tapped the CCC to finance an export subsidy program in the early 1980s. There has been uneasiness over the unprecedented scale of Trump’s trade-war spending; $10 billion for 2018 crops and livestock and promises of up to $16 billion for 2019 agricultural damage.“