Many farmers remain critical of US President Donald Trump’s tariffs and the damage done to commodity prices and markets, but were on Tuesday appreciative that he offered to provide some cash to help offset their losses.
The US Department of Agriculture (USDA) announced a US$12 billion three-part plan to borrow money from the US Department of the Treasury to pay producers of soybeans, sorghum, corn, wheat, cotton, dairy and hogs.
The USDA also plans to buy the surplus of commodities that would otherwise have been exported and distribute them to food banks and other nutrition programs. That would 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 US economy,” US Secretary of Agriculture Sonny Perdue said.
The money comes from the Commodity Credit Corporation, a USDA agency founded in 1933. It has the authority to borrow up to US$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 EU 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 445-hectare Iowa farm near Collins.
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 when Trump began discussing tariffs this spring.
China is the largest buyer of US soybeans and one of the largest importers of US pork.
US farmers are expected to grow 14.2 billion bushels of corn this year and 4.3 billion bushels of soybeans, down a little 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.
Trump’s tariffs are “government interference at its worst,” he said.
Schlosser said he had been “transitioning” his farm to his son, but the future does not look good for young farmers now.
“My son has a good job outside of farming,” Schlosser said. “I told him he better keep that job.”
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.
“I can’t argue they are trying to help us, but how long will this last?” Watne said. “Are they truly going to get us a solution that will make things better?”
Watne prefers better crop subsidies and other revenue loss protections in the massive federal farm bill that is being hammered out in a US House of Representatives-Senate conference committee, to guard against retaliatory tariffs on US agriculture exports.
Some farmers expressed concern that few details have been released.
The USDA said it plans to roll out some of those details on about Sept. 3 and the program would begin to make payouts after the fall harvest.
“I don’t want free money. I don’t want bailouts. I want trade. Trade is what works,” said Wanda Patsche, who grows corn and soybeans and raises pigs near Welcome in southern Minnesota.
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