Trump’s Proposed $12 Billion Aid Package to Farmers Not a Winner

farmDonald Trump’s plan to provide $12 billion in federal aid to American farmers hurt by a trade war drew a sharp mix of reactions Tuesday from Iowa farm groups, politicians, agricultural economists and others.

U.S. Agriculture Secretary Sonny Perdue described the initiative as a short-term strategy that will protect agricultural producers while Trump works on long-term trade deals to benefit agriculture and the entire U.S. economy.

Critics point out that while Iowa farm income has been down, agriculture had been doing well from an export standpoint before it was negatively affected by Trump’s decisions to impose tariffs and pick trade fights with China, Mexico, Canada and other major trading partners of the United States.

Mark Recker of Arlington, president of the Iowa Corn Growers Association, said that when politics or market forces put farmers at risk, the government can and should consider initiatives to keep family farmers on the farm, but Drew Klein, state director of American for Prosperity, says, โ€We need good trade policy that helps Iowa farmers, not a government bailout to compensate for crippling tariffs,” Klein said.

Three initiatives are being targeted by the USDA to help farmers:

1. A market facilitation program will provide payments incrementally to producers of soybeans, sorghum, corn, wheat, cotton, dairy and hogs.
2. The USDA will implement a food purchase and distribution program to purchase surplus food such as fruits, nuts, rice, legumes, beef, pork and milk, for distribution to food banks and other nutrition programs.
3. A trade promotion program will be administered by the Foreign Agriculture Service in conjunction with the private sector to develop new export markets for U.S. farm products.

USDA officials announced the plans as political analysts have been warning that Republican elected officials could face a backlash in rural America in November’s election as a result of Trump’s push for new trade agreements.

U.S. soybean prices have plunged by about 20 percent since March, when Trump first imposed tariffs on steel and aluminum imports, causing China and other countries to retaliate. Commodity prices for pork, corn and other major Iowa farm products have declined as well. Iowa farmers had 220 million bushels of soybeans in storage last month, close to 40 percent of their 2017 crop.

Many Iowa farmers and GOP leaders have said the state’s agricultural community mostly supports Trump’s pursuit of better trade deals with foreign countries. But farmers’ patience could be limited. They also worry that a trade war could hurt Iowa farm implement manufacturers, such as Deere & Co., and other agribusinesses.

Gov. Kim Reynolds, a Republican campaigning for election, agreed with other Republicans that the $12 billion in federal aid to farmers is simply a short-term fix.

The Iowa Pork Producers Association said it stood behind a statement issued Tuesday by the National Pork Producers Council president’s statement that Trump’s proposal would provide “much-needed relief.”

Dermot Hayes, an economist at Iowa State University who closely monitors U.S. agriculture policy and international trade, said federal programs to purchase and give away food can end up cannibalizing existing markets, which means there is a limit to how much food can be given away.

U.S. Rep. Steve King, R-Kiron, a member of the House Agriculture Committee, issued a statement praising Trump for helping agricultural producers.

U.S. Rep. David Young: “What this really is, though, is the administration โ€” the president โ€” admitting that his trade policies are hurting Iowa farmers and producers, and all across the heartland for that matter. Farmers want markets, they want trade, and not necessarily this aid.”

Iowa Farm Bureau Federation President Craig Hill: “We continue to encourage the administration to end this trade war, and the clear preference for farmers is negotiating new trade agreements where we can grow demand for American-grown food, fiber and energy and have free access to markets, unencumbered by tariffs,” Hill said.

For more: Des Moines Register