Bloomberg reports that farmers across the United States are pushing back against the Trump administration's pledge to provide $12 billion in assistance to farms impacted by the ongoing trade war.
Neal Bredehoeft, a corn and soybean farmer in Missouri, summed up the current sentiment across the Midwest. In interview after interview, farmers delivered essentially the same response to President Donald Trump’s pledge yesterday to provide $12 billion in assistance: It’s nice to know you’re thinking about us, Mr. President, but what we want is a quick return to free trade. It’s “better to get our income from the marketplace than from the government,” Bredehoeft said. -Bloomberg
We assume this means farmers, or at least Neal and whoever else Bloomberg is talking about, will promptly refuse their portion of up to $20 billion per year in federal agriculture subsidies.
The planned assistance will be a mix of direct payments to farmers, purchases of various commodities for food-aid programs, and "the stepped up promotion of new export markets,"
According to Bloomberg, however, "The package has offended the sensibilities of many farmers who supported both Trump and a party that historically champions small government and free trade"
Agriculture is the third-biggest U.S. export industry. American farmers ship about one-third of their output abroad, generating an estimated $21 billion trade surplus this year, though that’s now under threat after China imposed tariffs on U.S. soybeans and other farm products.
“We want access to markets,” Stan Nelson, a fourth-generation corn and soybean farmer in Middletown, Iowa, said by phone as he was en route to check in on his combine at the local tractor dealer in preparation for the fall harvest. “We don’t want government payments, but we do appreciate President Trump recognizing the concern out in the country.” -Bloomberg
“We would prefer trade not aid,” said Dave Struthers, a soy farmer who also raises 6,000 hogs a year in Collins, Iowa. “We’d like to see things figured out on these trade issues.”
The government’s proposed package is like a Band-Aid that “slows bleeding -- it doesn’t heal the wound,” said Struthers, a Trump supporter. “It’s a temporary fix. That’s all any government influx of money would be. It is better than nothing.”
Earlier Wednesday, White House economic adviser Larry Kudlow told CBS This Morning that the planned $12 billion stimulus package is a short-term solution and that the Trump administration won't be making a habit of aid programs.
"What we’ve put on the board is what I think is a temporary assistance measure, I don’t think it’s going to get near to $12 billion," said Kudlow. "Nobody’s really thrilled about this. We’re just trying to protect American agriculture from some of the unfair trading practices."
Kudlow said the attempt to shore up markets is a reaction to a “broken” system of world trade that has worked against the U.S. in the past. He called for patience in allowing the U.S. to achieve reciprocity in trade. -Bloomberg
“No one is thrilled with subsidies, I get that,” Kudlow said. “On the other hand, we need a backstop for our patriotic farmers who have been hurt.”
Some Congressional GOP panned the plan, saying it failed to address the underlying issues of the White House's brewing trade wars.
Extra farm aid would be a balm to producers who are seeing prices drop and inventories rise because of disputes with China, Canada and other trade partners who are significant purchasers of U.S. pork, soybeans and other products.
While the overall economic impact of tariffs on steel and aluminum and Chinese imports already implemented by President Donald Trump is expected to be muted, American industry has warned it could hurt their earnings and lead to higher prices for consumers. On Wednesday, General Motors Co. cut its profit forecast this year on surging metals prices. -Bloomberg
That said, extra farm aid would help producers of targeted goods, such as pork, soybeans and other crops.