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Trump offers ag $12B in aid; EU may buy more soy

By JIM RUTLEDGE

WASHINGTON, D.C. — Beginning next month, farmers hit by punishing tariffs in an escalating trade war with China and other trading partners will be eligible for emergency aid from a $12 billion USDA funding package.

In another development, the United States and European Union appeared to step back from a series of planned tariffs, agreeing on July 25 to ease trade barriers and lower tariffs with a promise, President Trump said, that included the EU buying billions of dollars of American soybeans and natural gas.

Earlier that day, in the midst of criticism of the aid package that some called “a bailout,” the USDA issued a rare rebuttal in a series of comments from 18 lawmakers and a few farm groups, accompanied by three Fox News video clips by USDA Secretary Sonny Perdue, that urged support for Trump’s message.

On July 24, the President appeared before 4,000 veterans at the Veterans of Foreign Wars (VFW) 119th annual convention in Kansas City, asking farmers “to be a little patient.” The remarks came just a few hours after the USDA announced its $12 billion plan to provide “short-term relief” to farmers hurt by “illegal retaliatory tariffs,” Perdue said during a call with reporters.

Trump criticized the agriculture industry’s broadside lobbying efforts attempting to persuade the administration to back off his trade policies, arguing farmers “will be the biggest beneficiary” of his actions. “Just be patient,” he repeatedly urged.

Under the USDA’s multibillion-dollar plan, Perdue said three specific programs will be established to assist agricultural producers hurt by the tariffs, to meet the costs of disrupted markets, which the administration estimates will be about $11 billion.

“This is a short-term solution,” he said, to allow the administration “to work on long-term trade deals to benefit agriculture and the entire U.S. economy. The President promised to have the back of every American farmer and rancher, and he knows the importance of keeping our rural economy strong.”

The USDA will use the following programs to aid farmers:

•The Market Facilitation Program authorized under the Commodity Credit Corp. (CCC) will provide payments to producers of soybeans, sorghum, cotton, corn, wheat, dairy and hogs

•The Food Purchase and Distribution Program, through the Agricultural Marketing Service, will purchase surplus agricultural commodities for distribution to food banks and other nutrition programs – targeted commodities include fruits, nuts, rice, legumes, beef, pork and milk

•Trade Promotion Programs, which will be managed through the Foreign Agricultural Service (FAS), will assist the private sector in developing new export markets for U.S. farm products

The USDA said it expects producers may be able to sign up for these programs at their regional Farm Service Agency offices beginning after Labor Day. Perdue said Congressional approval is not needed to proceed with the program.

On Capitol Hill, the funding plan was met with mixed reaction from members of Congress and from farm groups across the country. Republican Sen. Ben Sasse of Nebraska said, farmers “don’t need gold-plated crutches. What they want is to end the trade war.”

Senate Agriculture Committee Chair Pat Roberts (R-Kan.) said, “It’s problematic, to say the least,” while Sen. Bob Corker (R-Tenn.) called the President’s tariff-and-subsidy policy “incoherent.”

On Twitter, Sen. Rand Paul (R-Ky.) wrote: “Tariffs are taxes that punish consumers and producers. If tariffs punish farmers, the answer is not welfare for farmers – the answer is remove the tariffs.”

“Wisconsin farmers want trade, not aid,” said Rep. Ron Kind (D-Wis.), who serves on the House Ways and Means Committee. “Our farmers aren’t looking for government handouts – they just want market access and opportunity to compete.”

Soybean farmers have been hit hard by the Chinese tariffs, with soy prices dropping by more than $2 per bushel since May, according to the American Soybean Assoc. (ASA). The EU deal, on the other hand, could help farmers, if true.

John Heisdorffer, ASA president and an Iowa grower, said, “While soybean growers appreciate the administration’s recognition that tariffs have caused reduced exports and lower prices, the announced plan provides only short-term assistance.”

He said the best way to reduce the nation’s trade deficit is by increasing exports. “Farmers don’t have time to wait and see how this trade war turns out,” he added.

In supporting the USDA plan, American Farm Bureau Federation President Zippy Duvall said the aid “will provide welcome measure of temporary relief to our farmers and ranchers who are experiencing the financial effects of the trade war.

“This should help,” he said, “but we cannot overstate the dire consequences that farmers and ranchers are facing.”

In an early-morning tweet hours before the administration announced the relief package, Trump wrote: “Tariffs are the greatest!”

Shortly after, Farmers for Free Trade Executive Director Brian Kuehl responded, “Most farmers in Trump country don’t think tariffs are ‘the greatest.’ Crops don’t grow overnight. Farmers and producers need time and long-term certainly to do their jobs, not constant chaos created by haphazard trade policy.

“Despite what President Trump tweets, his harmful trade policies are hunting farmers and families across the country.”

National Farmers Union President Roger Johnson said the group supports the President’s efforts to improve fair trade relationships with trading partners, yet “(the NFU) has grown weary of the administration’s go-it-alone, bull-in-a-china-shop approach.”

The National Pork Producers Council (NPPC) thanked Trump for taking action. Hog farmers are facing a 40 percent tariffs on their exports.

NPPC President Jim Heimerl, a producer from Ohio, said, “The restrictions we face in critical markets such as Mexico and China – our top export markets by volume last year – have placed American pig farmers and their families in dire financial straits.”

The USDA said further details will be announced in coming weeks on who will be eligible for the funding and the criteria needed to qualify for the aid.

8/2/2018