Many farmers remain critical of President Donald Trump’s tariffs and the damage done to commodity prices and markets but were appreciative early yesterday [Macau time] that he offered to provide some cash to help offset their losses.
The U.S. Department of Agriculture announced a USD12 billion three-part plan that would borrow money from the U.S. Treasury to pay producers of soybeans, sorghum, corn, wheat, cotton, dairy, and hogs.
The USDA also will buy the surplus of commodities that would otherwise have been exported and distribute them to food banks and other nutrition programs. That will cover fruits, nuts, rice, legumes, beef, pork and milk.
The third prong of the plan is to help farm groups develop new export markets.
“This is a short-term solution to allow President Trump time to work on long-term trade deals to benefit agriculture and the entire U.S. economy,” said Secretary of Agriculture Sonny Perdue.
The money comes from the Commodity Credit Corporation, a USDA agency founded in 1933. It has authority to borrow up to $30 billion from the Treasury at any one time to “stabilize, support, and protect farm income and prices.”
Farmers said they would rather have Trump settle the trade disputes with China, Mexico, Canada and the European Union and get free trade flowing again.
“A Band-Aid doesn’t cure an illness, but it might make it temporarily better,” said Dave Struthers who grows corn, soybeans and hay on a 1,100-acre Iowa farm near Collins, about 48 kilometers northeast of Des Moines. He also sells about 6,000 pigs a year.
Reaction from trade partners to Trump’s tariff policies have pushed soybean prices about 18 percent lower and corn and pork prices down 15 percent from the time Trump began discussing tariffs this spring.
China is the largest buyer of U.S. soybeans and one of the largest importers of U.S. pork.
U.S. farmers are expected to grow 14.2 billion bushels of corn this year and 4.3 billion bushels of soybeans, down some from last year but still huge crops. There were 73.5 million pigs on farms as of June 1, the highest number on that date since records began in 1964.
“Experience has shown that trade wars and all this tit-for-tat is devastating to the [agriculture] economy and drives prices down,” said Richard Schlosser, who grows soybeans, corn and wheat in Edgeley, in southwest North Dakota. He called the Trump’s tariffs “government interference at its worst.”
Schlosser said he had been “transitioning” his farm to his son, but the future doesn’t look good for young farmers now, he said.
The temporary aid is more of an admission by the president of the “huge impact” the trade war is having on farmers, said Mark Watne, president of the North Dakota Farmers Union, which has more than 45,000 members in the state. AP
No Comments