Trump’s New Farm Bailout Idea Probably Won’t Work

Written by SK Ashby

American farmers who've already been screwed by Trump's trade war over the last year are about get screwed again now that Trump has escalated the war.

To that end, Trump has called for bailing out the agricultural industry (again) by directly purchasing their crops and donating it to foreign countries. But, as the Financial Times explains, there's just a few problems with that.

Soybeans farmers have been harmed more than any other farmers and other nations have very little if any need for soybeans.

Moreover, Trump's big plan may not even be legal under current federal law and would violate some of our international agreements.

Most of the yellow soyabeans grown by US farmers are not ingested by people. Instead they are crushed at industrial processing plants into animal feed and vegetable oil.

I don’t think that any food aid recipient in the past needed, or in any way was in the market, for soyabeans,” said Abdolreza Abbassian, grain analyst at the UN Food and Agriculture Organization in Rome. [...]

The US had already committed $3.5bn to food aid this year under the Food Assistance Convention, an international agreement. Among the convention’s principles are one advising members to “purchase food and other components of food assistance locally or regionally, whenever possible and appropriate,” as opposed to importing food from overseas.

US federal law also requires an analysis of whether the receiving country would be able to store the inbound foodstuffs, to prevent them from rotting, and for the US to assess whether the aid would undermine local farmers, according to a report by the Congressional Research Service.

I was skeptical of Trump's new proposal for bailing out American farmers even before I learned that it might be illegal.

The Financial Times also speculates that Trump's proposal could also face challenges from rivals in the agricultural industry and their associated exporters because it might be an illegal subsidy under World Trade Organization (WTO) rules.

It's possible the White House will wiggle their way through these obstacles and start directly purchasing crops from farmers, but by the time that happens it will probably be too late to make a difference before the next election if it ever does.

"Soybean farmers getting today the same price they got in 1981."

Seems bad.