Farmer Aid Package Coming


OMAHA (DTN) — The Trump administration is announcing $12 billion in special trade-assistance aid to farmers because of the battle over tariffs that has hurt commodity prices and lowered farm exports.

The Washington Post, Politico and Dow Jones reported the aid package announcement would come Tuesday. USDA announced a press briefing Tuesday afternoon.

Key lawmakers on the Senate Agriculture Committee had not been briefed as of late Tuesday morning about the details of the plan.

Agriculture Secretary Sonny Perdue was granted authority earlier this year in legislation to tap into Commodity Credit Corp. funds for an aid package if necessary. The Washington Post stated the aid package would come through direct assistance to farmers, a food purchase program and more funds for trade promotion.

As of now, it is unclear how it would be shared among farmers. Perdue had indicated earlier this year that he would wait until after Labor Day to make a call on how to provide an aid package.

Tuesday's announcement on an aid package comes just before President Donald Trump is scheduled to speak in Dubuque, Iowa, this Thursday. So far, the White House has not released details of the president's trip.

Farm groups have become more critical of the recent trade war that has erupted since the Trump administration placed 25{4c92fa2179cbca4bed3bb0c6c6ce267033d9d158a5f4060fb03bde3d74c11c2b} tariffs on steel imports and 10{4c92fa2179cbca4bed3bb0c6c6ce267033d9d158a5f4060fb03bde3d74c11c2b} tariffs on aluminum exports. Earlier this month, the administration also placed 25{4c92fa2179cbca4bed3bb0c6c6ce267033d9d158a5f4060fb03bde3d74c11c2b} tariffs on $34 billion in products from China, prompting nearly similar retaliation on U.S. products, including a 25{4c92fa2179cbca4bed3bb0c6c6ce267033d9d158a5f4060fb03bde3d74c11c2b} tariff on soybeans, pork and other farm products.

Speaking to DTN last week, John Heisdorffer, an Iowa farmer and president of the American Soybean Association, said his biggest concern over the tariffs and price decline is for younger farmers who haven't experienced crisis such as the 1980s, when he recalls seeing a generation of farmers decimated economically.

“And I'm afraid that's what's going to happen here,” he said. “A bunch of these guys who have only been farming about 10 years started out in some good times, but since then, it's not been so good. If things don't turn around, there are going to be a lot of farmers going to the bank next spring for an operating loan and it's going to be hard to get.”

Soybean prices for the November contract have come down from a high in May of $10.60 a bushel to as low as $8.34 a bushel in mid-July. Prices have since slowly ticked up above $8.60 a bushel.

Soybean exports to China are down more than 20{4c92fa2179cbca4bed3bb0c6c6ce267033d9d158a5f4060fb03bde3d74c11c2b} from a year ago, and pork exports to China are down 58.7{4c92fa2179cbca4bed3bb0c6c6ce267033d9d158a5f4060fb03bde3d74c11c2b} so far this marketing year, though total pork exports are only down slightly.

The aid package comes as Congress is working to finish a new farm bill, and lawmakers from both parties have been critical of the idea of the Trump administration providing a separate aid package. Republican senators told Trump earlier this spring that farmers want trade, not aid. That's become a mantra of sorts.

Sen. Charles Grassley, R-Iowa, said Tuesday morning the discussion over trade aid was raised at one of the talks with Republican lawmakers at the White House during the spring. Lawmakers were generally opposed to the idea.

“Everybody popped up and said we don't want aid, we want trade, and that means markets,” Grassley said. “Let's get this thing settled.”

Grassley also criticized dipping into CCC funds for farmer aid, which is not common.

“It's not a very good long-term solution, and the only time I know it has been used in the last 30 years, at least for dealing directly with agriculture, was in the '98-'99 framework, and I'm not even sure why it was used then,” Grassley said. “It was a fairly costly thing at that point.”

Regarding Trump's visit to Dubuque, Grassley said the president needs to update farmers on what is happening with trade talks. “The president is going to have to say more than 'I like the farmers and I support the farmers.”

Secretary Purdue announced that the actions taken by the President are a short-term fix and will give Trump time to work on his long-term trade policy. The Secretary mentioned that China's actions have hurt farmers before tariffs and retaliatory tariffs were launched recently. 

Secretary Purdue announced three programs: 

1. The market facilitation program provides incremental payments to soybean, sorghum, corn, wheat, cotton, dairy and pork producers to help manage disruption in markets, deal with commodity surplus and expand to new markets.

2. The food purchase and distribution program would purchase affected commodities such as fruit, nuts, rice, legumes, beef, pork and milk for distribution to food banks and other nutritious programs.

3. The trade promotion program would assist, along with the private sector, in developing new export markets on behalf of producers.

Secretary Purdue said, “The programs we are announcing today are a firm statement that other nations cannot bully our agricultural producers to force the United States to cave in.” 

Source: DTN/Northern Ag Network

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