The abrupt dismantling of the U.S. Agency for International Development (USAID) under the Trump administration has triggered a cascade of disruptions for small-scale farmers across the United States. These farmers, who relied on USAID’s Food for Peace program and agricultural innovation initiatives, now face market instability, research funding cuts, and diminished access to international markets. With \$2 billion in annual procurement from U.S. farmers halted^1, over 400 producers directly dependent on USAID contracts are rethinking planting strategies^1, while thousands more face indirect economic fallout from severed global trade linkages and suspended innovation projects^1. The repercussions extend beyond immediate financial losses, threatening long-term agricultural sustainability and America’s competitive edge in emerging markets.
Economic Instability and Market Access Challenges
Loss of Guaranteed Procurement Contracts
USAID’s Food for Peace program historically purchased over 1.1 million metric tons of crops annually from U.S. farmers, including sorghum, corn, soybeans, and pulses^1. Small-scale growers, particularly in water-scarce regions like western Kansas, relied on USAID’s consistent demand for drought-resistant crops such as sorghum, which requires 30% less irrigation than corn^1. With the program frozen, farmers like John Boyd Jr. in Virginia face plummeting prices—soybean prices have fallen to \$9 per bushel, below the \$11 break-even threshold^2—forcing difficult choices between planting high-risk crops or leaving fields fallow.
The agency’s procurement model also supported rural economies indirectly. By purchasing through local grain elevators, USAID injected capital into small-town infrastructure, sustaining jobs in storage, logistics, and transportation^1. The sudden withdrawal of this demand has left elevators with surplus stock, destabilizing regional pricing and threatening closures^5. In Minnesota alone, \$70 million in commodity contracts with Cargill, CHS Inc., and Sinamco are now in jeopardy, risking ripple effects across Midwestern farming communities^5.
Spoilage and Logistics Breakdown
A February 10 report from USAID’s Office of Inspector General revealed that 500,000 metric tons of U.S.-grown food aid, valued at \$489 million, is stranded in ports or transit^1. Without USAID staff to coordinate distribution, perishables like vegetable oil and pulses risk spoilage, compounding financial losses for farmers who already delivered crops^1. Jordan Schermerhorn, a former USAID contractor, likened the logistics paralysis to “driving a car with two wheels,” emphasizing the irreplaceable role of agency personnel in navigating customs, local partnerships, and last-mile delivery in crisis zones^1.
Collapse of Agricultural Research and Innovation
Gutting of Land-Grant University Programs
USAID funded 19 innovation labs at land-grant universities, which conducted over 1,000 projects aimed at improving global agricultural productivity^1. These labs served dual purposes: advancing sustainable farming techniques abroad and indirectly benefiting U.S. farmers through market development. For example, the Soybean Innovation Lab (SIL) at the University of Illinois developed rust-resistant soybean varieties and mechanization tools for African smallholders, creating future export opportunities for U.S. growers^1. With funding severed on January 25, 2025, SIL and similar programs have halted, abandoning projects like a pull-behind combine prototype designed for African markets^1.
Dr. Kerry Clark of the University of Missouri warned that China is poised to fill the void left by USAID, offering its own grain exports bundled with infrastructure investments^1. This shift could permanently alter trade alliances, disadvantaging U.S. farmers in emerging markets where SIL once laid groundwork for soybean demand^1.
Disruption of Private Sector Partnerships
USAID’s Partnering for Innovation program allocated \$42 million to 50 companies to develop technologies for smallholder farmers^4. By de-risking market entry through milestone-based grants, the program enabled firms like Puris Holdings—a Minnesota pea protein processor—to expand into global pulses markets^4. Post-USAID, companies face stalled projects and investor hesitancy. Nicole Atchison, Puris CEO, noted that USAID accounted for 10–20% of pulse export demand, a gap unlikely to be filled by private buyers amid current oversupply^5.
International Market Erosion and Strategic Setbacks
Decline in Global Trade Influence
USAID’s humanitarian aid doubled as a strategic tool to cultivate consumer markets in developing nations. By improving agricultural productivity in regions like sub-Saharan Africa, the agency fostered populations capable of purchasing U.S.-grown soybean feed for poultry or processed wheat products^1. The dismantling disrupts this long-term strategy, ceding influence to competitors. The Atlantic Council notes that China is already capitalizing on USAID’s absence, offering African nations direct investment deals that prioritize Chinese agricultural exports over U.S. goods^11.
Humanitarian and Diplomatic Costs
The suspension of food aid to 35 countries has dire implications for global stability, which in turn affects U.S. farmers. Tom Waters, a Missouri farmer, echoed his grandfather’s adage: “People get hungry, they’ll fight”^9. By withdrawing aid, the U.S. risks exacerbating conflicts that disrupt trade routes and destabilize regions critical to agricultural exports. Furthermore, the closure of programs combating disinformation (e.g., countering Russian propaganda in Africa) weakens diplomatic ties that underpin trade agreements^8.
Political Responses and Legislative Uncertainty
Proposed Transfer to USDA
Representative Tracey Mann’s H.R.1207 seeks to relocate Food for Peace to the USDA, arguing the department’s budget can sustain procurement^1. While organizations like the Plains Cotton Cooperative Association support the move, critics warn that USDA lacks USAID’s logistical expertise in international aid distribution^1. Even if passed, the bill—currently stalled in committee—would require months to implement, leaving farmers without a safety net during the 2025 planting season^1.
Legal and Advocacy Efforts
Senator Dick Durbin has condemned the dismantling as “illegal” and detrimental to U.S. soft power, citing the closure of the Soybean Innovation Lab and layoffs of 30 researchers^8. Meanwhile, lawsuits by federal worker unions have temporarily reinstated some staff, but \$60 billion in foreign aid remains frozen^3. Advocacy groups like USAID Stop-Work estimate 52,000 American jobs lost in contracting firms, with supply chain executives reporting cascading layoffs and bankruptcies^9.
Socioeconomic Repercussions and Class Stratification
Corporate Consolidation Risks
Reddit analyses and academic critiques posit that USAID’s dismantling accelerates corporate consolidation in agriculture^6. As smallholders lose guaranteed markets, they face pressure to sell land to agribusinesses or transition into contract farming under unfavorable terms. This shift mirrors historical patterns where economic crises enable capital holders to absorb struggling farms, converting independent growers into wage laborers^6.
Erosion of Rural Communities
The collapse of grain elevators and research hubs at land-grant universities threatens rural viability. In Missouri, the University of Missouri’s International Programs—which connected farmers to African markets—has furloughed staff, severing a pipeline for agricultural innovation^1. As young farmers abandon unprofitable operations, rural populations decline, straining schools, hospitals, and local businesses.
Conclusion: A Crossroads for Agricultural Policy
The dismantling of USAID represents a pivotal moment for U.S. agriculture, exposing vulnerabilities in a system overly reliant on federal safety nets. Small-scale farmers, already grappling with climate change and input costs, now confront a void in market access and innovation. While legislative remedies like H.R.1207 offer tentative hope, immediate action is needed to prevent spoilage losses and permanent market erosion. Rebuilding international partnerships and reinvesting in agricultural R\&D will be critical to restoring competitiveness. As China and other rivals advance their global agricultural agendas, the U.S. must decide whether to recommit to its leadership role or cede hard-won markets to competitors. The fate of small-scale farmers—and the rural communities they sustain—hangs in the balance.
[^10]: https://www.norc.org/content/dam/norc-org/pdfs/USAID Paraguay FECOPROD Program Description.pdf
