Farmers left with ‘swelling grain stores and empty pockets’
Agricultural groups press for resumption of trade, not aid
Corn Planting As More May Storms To Slow Seeding, Growth
Photographer: Daniel Acker/Bloomberg
President Donald Trump’s new $16 billion aid package for farmers raises the federal government’s bill for the trade-war but isn’t easing anyone’s concerns about damage to the U.S. economy.
Farmers would prefer a resumption of normal trade over government handouts. Several farm-state lawmakers say the payments are too meager. And the money risks distorting agriculture markets.
“What do farmers want? They want trade,” said Beth Ford, chief executive officer of Minnesota-based agriculture cooperative Land O’Lakes Inc., before the White House released details of the plan. “Nobody wants a payment.”
Democratic Senator Tina Smith of Minnesota derided the administration’s trade assistance in a Bloomberg TV interview as “a little Band-Aid” that “won’t take care of the problem.”
The Trump administration unveiled its latest package Thursday to help farmers hurt by the trade war with China, including $14.5 billion in market facilitation payments directly to producers and $1.4 billion in government purchases to be distributed through school lunch programs and local food banks. That brings to $28 billion the total trade assistance the U.S. has announced for agriculture.
“We will ensure our farmers get the relief they need, and very, very, quickly,” Trump said at the White House on Thursday in announcing the aid. “Good time to be a farmer,” he added.
Farmers can expect to receive their first aid payments by July or August, Agriculture Department officials said in a conference call with reporters on Thursday. The final payment is scheduled for the beginning of the 2020 election year.
American farmers are struggling to remain afloat as the tit-for-tat tariffs spat with China leaves soybeans from last year’s harvest piling up. American farm income dropped 16% last year to $63 billion, about half the level it was as recently as 2013. For Trump, appeasing his rural-voter base has become crucial ahead of 2020 elections.
Trump referenced the key role farmers and ranchers played in his 2016 election as he announced the aid package, saying they were “people that have been with me from the beginning.”
“The farmers have been attacked by China” in retaliatory tariffs Beijing has imposed on U.S. agricultural exports, he added.
John C. Baize, an independent consultant who advises the U.S. Soybean Export Council, said the payments will “underwrite the farm economy.”
“That will help the president in rural America with respect to the 2020 election,” Baize said. “Clearly producers of some commodities that are doing fine will get the payments while others that are hurting because of the trade war will get less.”
Futures for corn, soy and wheat each dropped from earlier gains after the conference call, with Chicago corn declining by as much as 1.9% to $3.87 a bushel. Analysts cited concerns the plan could prompt farmers to plant more even as stockpiles of crops remain huge in part because of the trade war.
Roger Johnson, president of the National Farmers Union, called the latest aid package “a short-term fix for a very long-term problem.”