Farmers prefer trade over cash

Many farmers remain critical of President Donald Trump’s tariffs and the damage done to commodity prices and markets but were appreciative yesterday that he offered to provide some cash to help offset their losses.

The US Department of Agriculture announced a $12 billion ($NZ17.6b) three-part plan that would borrow money from the US Treasury to pay producers of soybeans, sorghum, corn, wheat, cotton, dairy, and hogs.

The USDA also will buy the surplus of commodities that would otherwise have been exported and distribute them to food banks and other nutrition programmes. That will cover fruits, nuts, rice, legumes, beef, pork and milk.

The third prong of the plan is to help farm groups develop new export markets.

‘‘This is a short-term solution to allow President Trump time to work on long-term trade deals to benefit agriculture and the entire US economy,’’ Secretary of Agriculture Sonny Perdue said.

The money comes from the Commodity Credit Corporation, a USDA agency founded in 1933. It has authority to borrow up to $30b from the Treasury at any one time to ‘‘stabilise, support, and protect farm income and prices’’.

Farmers said they would rather have Trump settle the trade disputes with China, Mexico, Canada and the European Union and get free trade flowing again.

‘‘A Band-Aid doesn’t cure an illness, but it might make it temporarily better,’’ said Dave Struthers who grows corn, soybeans and hay on a 450 hectare Iowa farm near Collins, about 48 kilometres northeast of Des Moines. He also sells about 6000 pigs a year.

Reaction from trade partners to Trump’s tariff policies have pushed soybean prices about 18 per cent lower and corn and pork prices down 15 per cent from the time Trump began discussing tariffs this spring. China is the largest buyer of US soybeans and one of the largest importers of US pork.

‘‘Experience has shown that trade wars and all this tit-for-tat is devastating to the (agriculture) economy and drives prices down,’’ said Richard Schlosser, who grows soybeans, corn and wheat in Edgeley, in southwest North Dakota. He called the Trump’s tariffs ‘‘government interference at its worst.’’

Schlosser said he had been ‘‘transitioning’’ his farm to his son, but the future doesn’t look good for young farmers now.

‘‘My son has a good job outside of farming,’’ Schlosser said. ‘‘I told him he better keep that job.’’

The temporary aid is more of an admission by the president of the ‘‘huge impact’’ the trade war is having on farmers, said Mark Watne, president of the North Dakota Farmers Union, which has more than 45,000 members in the state. ‘‘I can’t argue they are trying to help us but how long will this last? Are they truly going to get us a solution that will make things better?’’

Watne prefers better crop subsidies and other revenue loss protections in the massive federal farm bill that is being hammered out in a House-Senate conference committee, to guard against retaliatory tariffs on US agriculture exports. –

‘‘A Band-Aid doesn’t cure an illness, but it might make it temporarily better.’’ Dave Struthers, farmer