Tuesday, July 24, 2018

USDA announces $12 billion plan to help farmers hurt by trade war: cash, purchases of products, trade promotion

The Department of Agriculture has announced "a $12 billion package of emergency aid for farmers caught in the midst of President Trump’s escalating trade war," The Washington Post reports, calling it "the latest sign that growing tensions between the United States and other countries will not end soon." President Trump plans to talk about trade issues in a trip to Illinois and Iowa on Thursday. "The administration announced the package weeks earlier than initially planned," notes Chuck Abbott of Agriculture.com. "During a briefing, USDA officials said details would be released in the next couple of weeks."

The package includes payments to soybean, sorghum, corn, wheat, cotton, dairy and pork farmers, and purchase of fruits, nuts, rice, legume, beef, pork, and milk for charitable donation. Signups are expected to begin by Labor Day, "just as voters in some of the most heavily impacted states are preparing to cast votes in the midterm elections," the Post notes. "There are several key Senate races in farm-dependent states like Missouri, North Dakota, and Indiana this November, and the outcome of those races could determine who controls the chamber next year. . . . White House officials hope it will temporarily quiet some of the unease from farm groups, but the new plan could revive debates about taxpayer-funded bailouts and the degree to which Trump’s trade strategy is leading to unforeseen costs."

The package will also "provide funds to outside organizations to build overseas markets for U.S. food and ag exports," Abbott reports. Payments will depend on prices farmers get for their products. It will use USDA's existing Commodity Credit Corp. so it will not require approval by Congress, though the CCC has not been used to mitigate the impacts of trade disputes. "Some Republicans several months ago had warned against using the CCC as part of a trade-war related bailout, saying it could distort market forces and pay farmers for products they don’t produce," the Post reports. "And there was bipartisan criticism from Republicans and Democrats on Tuesday to what the White House was trying to do. At least two Republicans said the plan equated to a type of welfare program for farmers:" Sens. Bob Corker of Tennessee and Rand Paul of Kentucky.

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