Trump dis­penses bil­lions to help suf­fer­ing farm­ers

But pay­ments may not mit­i­gate fall­out over his trade war

Baltimore Sun - - NATION & WORLD - By Don Lee

WASHINGTON — Mov­ing to off­set the ef­fect his trade war has had on ru­ral Amer­ica, Pres­i­dent Donald Trump has by­passed Congress to send about $20 bil­lion in aid to farm­ers, mostly go­ing to a bun­dle of states that are es­sen­tial to his re­elec­tion chances next year.

The pay­ments have ranged from as lit­tle as $2 for some small-scale farm­ers to more than $1 mil­lion each for some cor­po­rate agri­cul­tural en­ter­prises.

To side­step Congress, which has long con­sid­ered price sup­ports for farm­ers its ex­clu­sive do­main, the ad­min­is­tra­tion cited an ob­scure law from the 1940s that was passed in the af­ter­math of the Dust Bowl and the Great De­pres­sion.

Un­til Trump, no pres­i­dent had ever used that law to make di­rect pay­ments to farm­ers, let alone tens of bil­lions. The strat­egy bears some re­sem­blance to the one Trump used to shift mil­lions of dol­lars that Congress ap­pro­pri­ated for the mil­i­tary to pay for sec­tions of his bor­der wall. Un­like the bor­der wall money, how­ever, the farm aid has not drawn chal­lenges from Congress, per­haps be­cause Democrats have their own po­lit­i­cal rea­sons for not want­ing to op­pose help for ru­ral ar­eas in po­lit­i­cally im­por­tant states.

The pay­ments are likely to reach nearly $25 bil­lion by early next year, mak­ing them twice the net cost to tax­pay­ers of former Pres­i­dent Barack Obama’s auto in­dus­try bailout dur­ing the Great Re­ces­sion.

Even so, they may fall short of cov­er­ing farm­ers’ losses from the trade war with China or fully mit­i­gat­ing the po­lit­i­cal fall­out Trump has faced in some Mid­west­ern com­mu­ni­ties.

It’s not that farm­ers are in open re­volt against Trump. Sur­veys and in­ter­views sug­gest most are stick­ing with him and hop­ing for the best. But the trade war’s ef­fect — es­pe­cially the un­cer­tainty about fu­ture poli­cies — could dampen en­thu­si­asm come Elec­tion Day next year.

“Turnout is the key ques­tion: Are they just go­ing to stay home or are they go­ing to vote for Trump?” asked Kather­ine Cramer, a po­lit­i­cal sci­ence pro­fes­sor at the Univer­sity of Wis­con­sin who has re­searched ru­ral at­ti­tudes and the po­lit­i­cal and cul­tural di­vide be­tween ru­ral and ur­ban Amer­i­cans.

If farm­ers feel too pinched by the trade con­flict, “the great­est im­pact will be a lack of en­thu­si­asm — and they’ll stay home and not vote — which could make a huge dif­fer­ence,” she said.

For farm­ers, the cost of the trade war can be mea­sured in lost mar­kets in China, which has been by far the largest buyer of the soy­beans and other grain crops that are the lifeblood of agri­cul­ture across the Mid­west and Great Plains.

U.S. sales of soy­beans to China ex­ceeded $14 bil­lion in 2016, but prices fell as ten­sions mounted. Soy­bean ex­ports to China plunged to $3.1 bil­lion last year.

Early last month, Trump an­nounced that he and Chi­nese Pres­i­dent Xi Jin­ping would shortly be sign­ing a “Phase 1” agree­ment in which China would buy $40 bil­lion to $50 bil­lion of U.S. farm goods a year, about dou­ble the an­nual amount be­fore ex­ports to China plum­meted last year.

That hasn’t hap­pened.

Some farm­ers say they are weary­ing of Trump’s on-again, off-again rhetoric, with its still-un­ful­filled prom­ises of an im­mi­nent end to the con­flict with Bei­jing.

Some farm­ers worry that China is devel­op­ing new sup­ply chains in Brazil, Ar­gentina and else­where that may be hard to break even if the trade war ends.

Scott Henry of Ne­vada, Iowa, a small town 40 miles north of Des Moines, backed Trump in 2016. And the 29-year-old, third-gen­er­a­tion corn and soy­bean grower hasn’t given up on the pres­i­dent yet. Nei­ther is he cer­tain to vote for him.

“Trump has done just enough with tax pol­icy and busi­ness reg­u­la­tions to keep peo­ple” sup­port­ive, he said.

But, he added, “I have no con­fi­dence that we’ll ac­tu­ally get any­where on trade. What we’ve learned is there’s a lot of talk from this ad­min­is­tra­tion and very lit­tle ac­tion.”

Trump has “bought some votes from farm­ers” with the added farm spend­ing, he said, ad­ding that he’s a lit­tle trou­bled by the scale of the ex­pense.

Trump jus­ti­fied the spend­ing by claim­ing he was us­ing tar­iff money col­lected from China to pay for it. But U.S. im­porters and Amer­i­can con­sumers, not China, foot the bill for tar­iffs on Chi­nese im­ports. And the cash pay­ments to farm­ers ac­tu­ally come from tax­payer funds through the bor­row­ing au­thor­ity of the Com­mod­ity Credit Corp., ac­knowl­edged Richard Fordyce, the Depart­ment of Agri­cul­ture’s Farm Ser­vice Agency ad­min­is­tra­tor.

In an in­ter­view, Fordyce said the ad­min­is­tra­tion moved ahead of Congress be­cause it saw the need and wanted to re­spond di­rectly to the im­pact from re­tal­ia­tory tar­iffs.

“The pay­ments are com­ing at a time when the farm­ing years are very cycli­cal,” he said. “These pay­ments are com­ing at a time when it’s crit­i­cally im­por­tant for them and their farm­ing op­er­a­tions.”

RAN­DALL BEN­TON/SACRA­MENTO BEE 2013

Some farm­ers say they are weary­ing of Pres­i­dent Trump’s on-again, off-again rhetoric, with its still-un­ful­filled prom­ises of an im­mi­nent end to the con­flict with Bei­jing.

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