CUTS TO U.S. FOREIGN AID (USAID) AND THE AMERICAN FARM ECONOMY
What is the USAID program, and why is it important?
The U.S. Agency for International Development (USAID) is the federal agency responsible for foreign aid and development programs. It funds initiatives like emergency food assistance, agricultural research, and economic development in impoverished regions. Although USAID’s budget is tiny (less than 1% of the federal budget), its programs have big impacts. For example, every $1 invested in agricultural development through USAID has historically generated about $8.5 in economic returns by boosting productivity and trade. USAID doesn’t just help people overseas – it also creates demand for American goods and expertise, supporting U.S. farmers, businesses, and jobs at home. In short, foreign aid programs like USAID are often seen as investments that pay off for the United States in terms of economic benefits and global stability.
What did the Trump administration do to cut these programs?
Since taking office in January 2025, President Trump has taken aggressive steps to scale back foreign aid. Key actions included:
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Freezing aid funding: In his first weeks, he issued executive orders putting a pause on all foreign aid spending This immediately halted disbursements to USAID projects and grants abroad.
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Canceling aid contracts: The Trump team announced plans to eliminate over 90% of USAID’s foreign aid contracts, amounting to roughly $60 billion in global development and humanitarian assistance being cut. In practice, this meant thousands of ongoing aid projects were terminated or left in limbo.
Targeting food aid programs: Trump’s budget proposals also sought to eliminate long-running food aid programs (such as Food for Peace and the McGovern-Dole school meals program) that purchase U.S. farm commodities for donation abroad. While Congress pushed back on completely zeroing out these specific programs, the administration’s intent was to drastically scale them down.
Who is impacted by the cuts to foreign aid?
​The ripple effects of cutting USAID and related programs are far-reaching, affecting multiple groups:
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Vulnerable communities abroad: First and foremost, millions of people in crisis zones lost access to U.S. food aid, medicine, and development support. Countries facing conflict or hunger (for instance, famine-stricken African nations) saw lifesaving programs suddenly scaled back or halted. This humanitarian impact is severe, though it occurs overseas.
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American aid organizations and workers: Domestically, hundreds of U.S.-based nonprofits, contractors, and charities that implement USAID projects have been hit hard. More than 80% of companies contracting with USAID are American, and they stand to lose about $28.9 billion in planned funding due to the cuts. Nearly 14,000 USAID staff and contractors were put on leave or furloughed, with some organizations facing financial collapse without funding. In North Carolina alone, over 300 aid program employees have already been laid off as grants dried up.
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U.S. farmers and the farm economy: American farmers are uniquely affected because USAID has been a major buyer of U.S. agricultural products. Roughly 40% of international food aid commodities have been supplied by American farmers – from wheat and soybeans to sorghum. In 2020, for example, the government bought nearly $2 billion worth of U.S. farm goods for food aid programs. With those programs on hold, farmers are losing a key export market. Many large farms that grew crops for food aid now have produce piling up with nowhere to go. (In Texas, about $39 million worth of sorghum, corn, and peas intended for foreign aid has been stranded in warehouses instead of shipped abroad.) This hits farming communities that depended on those sales.
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Related industries and local economies: The impact extends to American ports, shipping companies, and food-processing businesses that were involved in the aid supply chain. For example, much of the food aid was shipped out of Houston’s port – those freight and logistics jobs are now at risk. Universities that received research grants from USAID (often for agricultural innovation) are losing funding as well, leading to canceled projects and potential layoffs of scientists. In short, the economies of rural areas and states that benefited from foreign aid contracts are feeling the strain.