Last week President Trump and Sonny Perdue promised to protect farmers caught in the middle of trade troubles. One possible solution to mitigate the affects of Chinese trade tariffs and NAFTA re-negotiations would be to have the USDA buy surplus U.S. crops, using its authority under the Commodity Credit Corporation, a federal entity that funds farm subsidies. Agricultural minded lawmakers are unconvinced that this is a good idea. Coverage of this skepticism was covered by DTN Progressive Farmer and Bloomberg by way of Agweb.com and Farm Futures.
AgWeb’s coverage from Bloomberg begins this way
(Bloomberg) — Leading lawmakers on congressional agriculture committees said Tuesday they’re skeptical that the White House can fix any economic harm for farmers arising from a trade dispute with China by giving them temporary aid through the Agriculture Department.
“We don’t need another subsidy program, we need to sell our product,” Republican Senator Pat Roberts of Kansas, chairman of the Senate Agriculture Committee, said at a meeting of agricultural reporters in Washington. “If we do that, we don’t need some sort of crazy-quilt program.”
President Donald Trump promised U.S. farmers on Monday they will emerge better — even though Beijing has threatened to impose tariffs targeting U.S. agricultural products — in part by directing the Agriculture Department to find ways to shore up finances that could be harmed by lower exports.
One option could be to use the department’s authority under the Commodity Credit Corporation, a federal entity that funds farm subsidies, to buy surplus U.S. crops, Steve Censky, deputy secretary of the USDA, said Monday.
Such a move would set a bad precedent by politicizing farm payments, said Representative Collin Peterson of Minnesota, the top Democrat on the House Agriculture Committee.
“I am against a one-time bailout of a situation created by the administration,” Peterson said. Farmers “want their markets left intact and not screwed up by some policy. Giving them money isn’t necessarily going to buy them off.”
Peterson proposed using a farm bill, due for reauthorization by Sept. 30, as a way to deal with trade disruptions.
Farm Futures continues the Bloomberg story noting that leading lawmakers on congressional agriculture committees said Tuesday they’re skeptical that the White House can fix any economic harm for farmers arising from a trade dispute with China by giving them temporary aid through the Agriculture Department.
While the moves could significantly increase farm subsidies, their cost shouldn’t be a concern “in an era when paying for stuff isn’t important,” Peterson said. Congress passed a tax-overhaul plan in December that’s projected to decrease federal revenue by almost $1.5 trillion over the next decade and a $1.3 trillion spending bill last month that raises funding for defense and domestic programs.
Roberts later dismissed Peterson’s idea, saying “there’s no new money” to boost farm payments.
Soybeans, the second-most valuable U.S. crop after corn, would be especially hard-hit — exports to China accounted for more than one-third of the oilseed’s revenue last year. Farmer organizations including the American Soybean Association have called the impacts of tariffs on agriculture “devastating,” even as farmers who are supporters of the president have taken a more wait-and-see approach.
DTN Progressive Farmer’s Chris Clayton also covered this skepticism with his post titled, “Congress Cool to Aid Payments”. He highlights the lawmakers’ criticism of the USDA using its authority to create new trade aid for farmers.
WASHINGTON (DTN) — Key leaders on the Senate and House Agriculture Committees are questioning the logic of allowing USDA to create a new program to provide trade-offsetting payments to farmers at the same time Congress is working to approve a new farm bill.
Congress boosted Perdue’s ability last month by getting rid of restrictions on the agriculture secretary’s emergency authorities.
Removing the restriction opens up as much as $15 billion in emergency spending authority to Agriculture Secretary Perdue.
Key lawmakers on the House and Senate Agriculture Committees spoke to members of the North American Agricultural Journalists association on Tuesday, and a key topic was whether the Trump administration would use new authorities to pay farmers for income losses from trade disputes.
Senate Agriculture Committee Chairman Pat Roberts, R-Kan., said farmers already have commodity programs and crop insurance. A new payment program created by USDA isn’t the answer, he said.
“We don’t need another subsidy program,” Roberts said. “We need to sell our product. We need a major sale, and it would be wonderful if we got good news on NAFTA with Mexico. There is wheat sitting on the ground in Kansas that should basically be going to Mexico. Mexico is buying from Argentina … So we need a market. We need to sell our product. If we do that, we don’t see some kind of ‘crazy’ subsidy program that would set a precedent, and sure enough it would be asked for every year. We just don’t need that.”
Roberts said he’s not against assistance to “our hard-pressed” farmers, but he said it would be better to start selling product instead.
Roberts also implied emergency payment programs from USDA can become partisan. He pointed to a situation in 2000 when then-President Bill Clinton’s agriculture secretary created a specific payment for Iowa grain farmers.
Sen. Debbie Stabenow, D-Mich., ranking member of the Senate Agriculture Committee, said the committee’s work has been successful because it has been bipartisan. She said it would be unfortunate if a USDA fund became used by the Trump administration to pay farmers in a hotly contested mid-term election year.
The separation of powers in the U.S. sometimes makes strange bedfellows. This may be an instance where the bipartisanship is more of a function congress wanting to protect its power of the purse from the executive branch. However, it is a good sign when all involved are interested helping the U.S. farmer during these turbulent times.
Image Courtesy Farm Futures