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US stumps up $12 billion assistance package for farmers impacted by tariff war

Grain Central, July 25, 2018

THE United States has announced a US$12 billion package in emergency assistance to its farmers caught up in the escalating trade war triggered by US tariffs on China and other trading partners.

Under the assistance program, the US government will provide payments incrementally to producers of soybeans, sorghum, corn, wheat, cotton, dairy, and hogs, and will help farmers manage disrupted markets, deal with surplus commodities, and expand and develop new markets at home and abroad.

The government will also purchase any unexpected surplus of affected commodities such as fruits, nuts, rice, legumes, beef, pork and milk for distribution to food banks and other nutrition programs.

President Donald Trump directed Secretary of Agriculture, Sonny Perdue, to craft a short-term relief strategy to protect agricultural producers, authorising up to $12 billion in programs to counter the estimated $11 billion impact of retaliatory tariffs on US agricultural goods.

“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,” Secretary Perdue said.

US farmers have borne the brunt of retaliatory tariffs imposed by countries the US has targeted with trade tariffs.

Commodities impacted include field crops like soybeans and sorghum, livestock products like milk and pork, and many fruits, nuts, and other specialty crops.

Additionally, there is evidence that American goods shipped overseas are being slowed from reaching market by unusually strict or cumbersome entry procedures, which can affect the quality and marketability of perishable crops.

Responding to the assistance move, the US National Farmers Union (NFU), said it supported the president’s efforts to improve fair trade relationships with trading partners, “yet has grown weary of the administration’s go-it-alone, bull-in-a-china-shop approach”.

NFU president Roger Johnson said President Trump’s escalating trade war with China and much of the rest of the world required action to protect “the men and women who grow our food, fuel and fibre”.

“Their livelihoods are on the line with every tweet, threat or tariff action that comes from the White House. Market prices for farm products are plunging from already very low levels, and it’s been estimated that farmers lost more than US$13 billion last month alone due to trade disruptions,” he said.

“While we appreciate the move to provide stopgap assistance, this plan is a short-term fix to a long-term problem. The administration must develop a support mechanism that will mitigate the significant damage that is being inflicted upon our most vital international markets for years to come. They should do this by working with Congress to ensure farm bill programs provide enough assistance to farmers when markets collapse.”

Sources: USDA, NFU

 

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