The Trump administration will deliver US$12 billion in aid to farmers who’ve been hit by dropping prices for crops and livestock amid a burgeoning trade war in which agriculture is a main target for retaliation against U.S. tariffs.

The assistance will be a mix of direct payments to farmers, commodity purchases for food-aid programs, and stepped up promotion of new U.S. export markets, Agriculture Secretary Sonny Perdue said told reporters on Tuesday.

Farm state Republicans in Congress, who’ve been warning President Donald Trump that some of his most loyal supporters were being hurt by his trade policies, criticized the plan as welfare for farmers who would be better served by an end to the trade war, which is already dragging down prices for soybeans and other crops.

"There will never be enough money to solve the problem" created by Chinese duties on U.S. farm goods, said Senator Jerry Moran of Kansas, a Republican. "Farmers are ranchers recognize that the Trump administration cares about them. They are worried about tariffs."

Iowa Trip

The plan for providing price supports, which don’t need congressional approval, was rolled just two days before Trump is set to travel to Iowa, the top U.S. soybean-producing state. Perdue said more details about the aid will be announced by the beginning of September, which was the timeline he laid out last week.

Extra farm aid would be a balm to producers who are seeing prices drop and inventories rise because of disputes with China, Canada and other trade partners who are significant purchasers of U.S. pork, soybeans and other crops.

Farmers are a key part of the rural political base that elected Trump, who has promised them they will emerge from a trade war better off. Many farmers are accepting that message. Still, an extended trade dispute that lingers into the fall harvest -- and elections -- holds the potential to shake that support. Trump also has been under pressure from farm state lawmakers to back away from imposing tariffs.

“The farmers will be the biggest beneficiary, watch, we are opening up markets, you watch what is going to happen, just be a little patient, they are all aiming at anyone who likes me,” Trump said during a speech Tuesday in Kansas City.

Farm goods covered would range from major commodities such as soybeans, wheat and milk to legumes and nuts, depending on the program. Farmer signups will begin later this year, after the fall harvest, the USDA said.

President Trump "has promised that he had the back of every American farmer and rancher," Perdue said. The assistance is "a firm statement that other nations cannot bully our agriculture producers to force the United States to cave in."

Republican Senator Chuck Grassley of Iowa, who’s been critical of Trump’s moves on trade, said before the announcement that commodity supports aren’t a long-term solution and will be costly to taxpayers. Farmers would prefer trade to aid, he said during a conference call with reporters.

“The president’s going to have to say more than ‘I like the farmers and I support the farmers,”’ he said.

Stocks of farm equipment makers including Deere & Co. gained on reports of the planned announcement of aid to farmers. Deere shares rose 4.6 percent, more than any full-day gain since May 18. Soybean futures for November delivery gained as much as 1.4 per cent to US$8.75 1/4 a bushel on the Chicago Board of Trade, the contract’s highest since July 10.

Trade Surplus

Agriculture is the rare U.S. industry that runs a trade surplus, with a projected US$21 billion this year. Canada, China and Mexico are the three biggest buyers of U.S. farm goods, accounting for 43 percent of purchases in 2017. All three are embroiled in conflicts with the U.S.

Soybeans, the second-most valuable U.S. crop after corn, have been especially hard hit -- exports to China accounted for about one-third of the oilseed’s revenue last year. The USDA projected earlier this month that average soybean prices paid to farmers would fall 75 cents to US$9.25 a bushel next year.

U.S. farm profits were already projected to reach a 12-year low before any trade actions were announced. Farmer organizations including the American Soybean Association have called the impacts of tariffs on agriculture "devastating."

Trade conflicts "are having a real and costly impact on the rural economy and the ability of rural businesses to keep their doors open," said Wisconsin Senator Tammy Baldwin, a Democrat, asking Trump to develop a farm plan. "Without prompt action, we could lose farmers and the rural businesses they support and depend on at an even more rapid rate.”

While emergency government commodity buys are rare, they’re not unheard of. President Barack Obama allocated US$170 million to help farmers struck by drought in 2012.