October 20, 2020

 

Trump administration assures record bumper year for farmers ahead of election

 

United States President Donald Trump is providing record government aid for farmers, making up for more than a third of US agriculture income this year, Reuters reported.

 

The aid programme could be important for Trump's election success in key agriculture states of Wisconsin, Ohio, Iowa and Minnesota.

 

Government payments have increased annually since Trump took office. This includes longstanding crop insurance payments, as well as compensation programmes channeled to farmers who reported lost sales during the US-China trade war.

 

Roger Hadley, a northeastern Indiana farmer with about 1,000 acres of corn and soybeans, said he not confident that they will be taken care of if Joe Biden gets elected, at least in the short-term.

 

While famers urged Trump to boost trade in 2018, they have since received repeated bailouts even as the COVID-19 stimulus stalls in congress for millions of Americans.

 

The government aid provided to farmers compensated them for lower prices as a result of the US-China trade war and large worldwide supplies of crops.

 

The latest farm aid package, announced in Wisconsin on September 17 worth US$14 billion, will mean federal payments to farmers are expected to reach a record US$51.2 billion in 2020. The government's share of farmers' net cash income will also rise to 39.7%, the biggest in 20 years.

 

Net cash income is a farm health indicator that calculates a farmer's money that can be kept after expenses. According to the US Agriculture Department (USDA), forecast net farm income would rise 4% in 2020 from last year. This was before the latest aid package was announced.

 

Corn and soybean prices have gone up thanks to China's increased purchases as well as US weather concerns. Soybean has reached multiyear highs while corn has hit a one-year peak, increasing farmer income.

 

Farmers will be able to stabilise balance sheets, repay debts and have access to loans to purchase seed and equipment for next year using government payments and rising crop prices.

 

The latest government aid will channel US$3.5 billion for corn and $1.4 billion for soybeans. The package was calculated based on mid-January and July prices, before the increase in August.

 

-      Reuters