WASHINGTON -- America's farmers have been shut out of foreign markets, hit with retaliatory tariffs and lost lucrative contracts in the face of President Donald Trump's trade war. But a $12 billion bailout program Trump created to "make it up" to farmers has done little to cushion the blow, with red tape and long waiting periods resulting in few payouts so far.
According to the Department of Agriculture, just $838 million has been paid out to farmers since the first $6 billion pot of money was made available in September. Another pool of up to $6 billion is expected to become available next month. The government is unlikely to offer additional money beyond the $12 billion, according to Sonny Perdue, the agriculture secretary.
Farmers are facing a "perfect storm" that includes low commodity prices, a farm-labor shortage, failure by Congress to pass new farm legislation and bad weather, Zippy Duvall, president of the American Farm Bureau Federation, told a crowd of about 200 Arkansas farmers gathered Oct. 9 in McCrory for the annual dinner of the Woodruff County Farm Bureau.
"I've told the president, we need trade not aid," Duvall said.
The program's limitations are beginning to test farmers' patience. The trade war shows no signs of easing, with China and the United States locked in a stalemate that has reduced American farmers' access to a critical market for soybeans, farm equipment and other products. Europe is planning more retaliatory tariffs on top of those already imposed on American peanut butter and orange juice, and Canada and Mexico continue to levy taxes on American goods, including on pork and cheese.
Trump, who has had broad support in many farm states, still insists that his get-tough approach to trade will ultimately help American farmers, a position Perdue reiterated last month when he said farmers are "resilient" and can plan ahead for market conditions.
Farmers are no strangers to foreign tariffs or to government subsidies. But receiving monetary support in response to a trade dispute set off by the U.S. government is unusual. The program, which is using a Depression-era fund, allows farmers earning less than $900,000 a year to receive money if they produce one of the agricultural products that has faced retaliation. In some cases, the government is buying excess food such as apples and orange juice and giving it away through nutrition assistance programs.
Under the program, different types of commodities receive different rates -- for instance, hog farmers get $8 per head for 50 percent of their herd, while dairy farmers get 12 cents for every hundred pounds of milk -- creating questions about equity.
The National Corn Growers Association has said the trade wars have cost its producers some $6 billion, or 44 cents a bushel. The National Association of Wheat Growers has presented similar numbers during the weeks since the aid program was first mentioned.
Farmers said they had mixed feelings about the bailout when it was announced last summer, as they tend to prefer free enterprise over government intervention, but many are disappointed as the subsidies have not made up for their losses.
"I don't think this is going to be enough to compensate them," said Eric Belasco, an economist at Montana State University and a scholar at the American Enterprise Institute. "It seems like there's not really an end in sight."
So far, farmers in Illinois, Indiana, Iowa, Kansas and Minnesota have been the biggest recipients of assistance, the USDA said, with soybeans, wheat, corn, dairy and hogs being the goods most in need of support. Until this year, China bought about 60 percent, or $13 billion worth, of the U.S. soybean crop.
The bailout has also benefited two U.S. senators who continue to run farms: Charles Grassley, R-Iowa, and John Tester, D-Mont.
The program has been bogged down by bureaucracy as well as practical challenges, which made it slow to roll out. Farmers who want payments must fully complete their harvests and sell crops before they can apply for aid -- presenting a challenge for some crops that have been delayed by bad weather.
Rains in late September in Arkansas, from the remnants of Tropical Storm Gordon, delayed the soybean harvest. Many of those fields were filled with beans that molded or sprouted, become discolored or hold excessive moisture. That led to lower prices at grain elevators.
Roderick A. De Arment, who grows soybeans and corn in Virginia, said that the subsidy application paperwork had been sitting on his desk because he had been waiting for his beans to dry for harvest. The wet weather has delayed the entire process, but he expects that if he gets 1,000 bushels of beans, he may be entitled to about $800 in return from the government.
"It's kind of a patch," said De Arment, who is an old friend of Robert Lighthizer, the Trump administration's top trade negotiator. "It's a bad situation, but it provides some relief for the farmers who are impacted."
That relief has not been enough to keep many farmers from feeling the pain of Trump's trade war.
Lynn Rohrscheib, who farms 7,000 acres of soybeans and corn in eastern Illinois, said she needed to sell soybeans at $10 a bushel to break even, and she can get only $8 a bushel. She is holding on to some of her beans, hoping for higher prices, but she had to sell a significant portion of this year's crop to pay her bills. If the standoff with China continues, she said she would need to lay off some of her 18 employees.
"We don't want a handout," she said. "We want trade. We want to sell the crop."
She said she was losing patience with the Trump administration.
"We were all really supportive at the beginning," she said. "We figured we didn't know all the facts and something would happen and this won't be a long-term thing. Now it looks like this is going to be a several-year thing and people are getting frustrated."
Farmers in general are having a tough year. The Agriculture Department's economic research service predicts net farm income in the United States this year will fall by $9.8 billion, to $65.7 billion, a 13 percent drop from 2017. Weak pricing, tight credit and corporate monopolies have put pressure on farms in recent years, and new trade barriers have exacerbated their economic problems.
Information for this article was contributed by Stephen Steed of the Arkansas Democrat-Gazette.
Business on 11/20/2018
Print Headline: U.S. farmers see little of $12B aid