USDA pays farmers $1.1B of $12B promised trade assistance

File photo: Flickr/ USDA/Lance Cheung

EVANSVILLE, Ind., Nov. 21 (UPI) — The U.S. Department of Agriculture has doled out roughly $1.1 billion of the $12 billion in aid it promised farmers to compensate for losses caused by the nation’s trade war with China.

Applications for aid are still coming in, as farmers across the country complete their harvests.

The money, economists say, is doing what the government promised. It will help keep many farmers solvent — for this year. But they worry that if the nation’s trade disputes do not end soon, the agricultural industry will need more assistance in 2019.

“If we look to 2019, farmers are still going to need support,” said Krista Swanson, an agricultural economist at the University of Illinois Urbana-Champaign. “What the budget shows is more losses.”

The prices for many of the foods grown in the United States took a hit this year. Nations around the world responded to tariffs levied by the Trump administration by imposing their own, many on U.S. agricultural products. Among the most damaging were those imposed by China, which had been the United States’ leading soybean importer and one of its leading pork importers, among other commodities.

Since setting the tariffs, Chinese soy and pork buyers have gone elsewhere. Soybean prices dropped by nearly 20 percent, and hog prices by around 12 percent. The corn, wheat and dairy industries also took hits.

The emergency aid, distributed through the Market Facilitation Program, will pay about half of what soy and pork farmers lost to the trade dispute. Other commodities get smaller payments.

It’s possible the Trump administration will make more aid money available later in the year — but there is no guarantee. And there has been no mention of aid after 2018, Swanson said.

Agricultural industries are scrambling to seek out new international customers.

They’ve had some initial success. New soybean markets have opened in Europe and Africa, and pork producers have started selling in some South American countries.

But no matter what they do, there is no way to quickly fill the void left by China, economists say. As long as those tariffs remain, U.S. agriculture will suffer.

“We rely on exports,” said Dave Warner, a spokesman for the National Pork Producers Council. “We’re exporting 28 percent of our total product. If we have something like the trade dispute we’re in now, we’re going to get hurt.”

There’s been little to indicate the two nations are close to reaching a truce since the Trump administration leveed the first round of tariffs against China this summer, accusing the country of stealing intellectual property rights. Since then, both countries have levied additional tariffs, and threatened even more.

Trump is scheduled to meet with China’s president, Xi Jinping, at the G20 summit in Argentina at the end of this month.

“I’m remaining positive,” said Swanson, whose family also grows corn and soybeans in Illinois. “Hopefully they can make some progress and give us some good news going into 2019.”

Many farmers across the country have echoed similar hopes — but they’re preparing for the worst. New tractor and equipment purchases are being put off, Swanson said. Some farmers will plant fewer crops production. Others will take out loans to cover their expenses.

“There’s been some real negativity among the younger farmers,” said Randy Souder, a soy farmer in Iowa. “They’re afraid for their futures. Prices can go down, and they can stay down for years. They haven’t figured out how to cope with what’s coming in the next few years. But they’ll learn. We all have to.”


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