August 29, 2018

US farmers to receive US$4.7 billion in the first round of state aid

The US$12 billion state aid package rolled out by the Trump administration in July for US farmers will begin its first round of compensation for market losses in September with US$4.7 billion.

Soybean growers, among the hardest hit from Chinese tariffs in a trade battle, will receive US$3.6 billion, according to the government plan released on Monday. The pork industry will receive the second-highest payment of US$290 million while dairy producers will also be eligible for assistance, the US Department of Agriculture (USDA) said.

Registrations will commence September 4, Sonny Perdue, Agriculture Secretary revealed, right when the harvest season begins and before the congressional elections on November 6. State aid pay-outs will start as soon as mid-September.

During a conference call, Perdue reiterated that the Trump administration will not just stand by while farmers are targeted by countries who are acting in bad faith

Adding on efforts to the aid programme for state farmers, the USDA will extend another US$200 million to promote US agricultural exports. The government will also step up commodity purchases to help boost prices, making at least US$1.2 billion of purchases, including US$559 million of pork.

Extra farm aid would help producers who are seeing prices drop and inventories rise because of disputes with China, Canada and other trade partners who are significant purchasers of US pork, soybeans and other crops.

Farmers are a key part of the rural political base that elected Trump, who has promised they will emerge better off from a trade war. Many farmers are accepting that message. Still, an extended trade dispute that lingers into the fall harvest - and the election - holds the potential to shake that support. Trump has been under pressure from lawmakers representing rural districts to back away from imposing tariffs.

Source: Union Leader