On Thursday, hours before the second-largest U.S. farm group said producers “are in desperate need of a lifeboat to keep them afloat,” the House Agriculture chairman said that fiscal constraints would preclude Congress from a multibillion-dollar bailout for farmers. “I don’t think there’s any way for it to come out of us,” said Collin Peterson after a hearing on the farm economy.
Two of the four farmers testifying at the hearing called for a new round of the Trump tariff payments — officially known as Market Facilitation Program payments — which sent more than $8 billion to farmers and ranchers to mitigate the impact of retaliatory Chinese tariffs on the agricultural sector. Another of the witnesses, Bart Davis of Georgia, said, “It is clear that supplemental assistance is needed” beyond crop insurance and farm subsidies because of low commodity prices, natural disasters, and the trade war.
Agriculture Secretary Sonny Perdue has said repeatedly that the administration does not plan an MFP encore. When reporters asked Peterson if Congress would step in with aid, he replied, “I don’t think that’s going to happen. … The problem is, if we do it, we have to pay for it,” which would mean an offsetting cut in other USDA programs or a House vote for additional spending.
On Friday morning, the Trump administration made good on its threat and increased tariffs on $200 billion worth of Chinese goods. At this point, there’s no end in sight for the Sino-U.S. trade war, but even if a resolution were reached, it would take some time before U.S. exports rebounded, said the National Farmers Union, lamenting low commodity prices and mammoth grain inventories. “In the long term, there needs to be a fundamental shift in the way we establish the economic sustainability of agricultural production,” said NFU president Roger Johnson. “But until that happens, struggling family farmers and ranchers are in desperate need of a lifeboat to keep them afloat, whether it’s another round of Market Facilitation Program payments or some other form of economic disaster assistance.”
Minnesota farmer Mike Peterson, who advocated an additional round of MFP payments, said he originally supported the Trump administration policy of trade confrontation as the route to better trade relationships, but that “the approach to these trade disputes has caused damage that I’m afraid will take us decades to overcome.” Texas grower Matt Huie supported “an additional and improved version of MFP or some similar package crafted by Congress.”
“While it is important to act to address China’s policy abuses and the impacts on our trading relationship, U.S. farmers cannot continue to withstand the economic impact of the trade dispute on our bottom line,” said Davis, the Georgia farmer, who also urged Congress to pass a disaster relief bill. That legislation has been stalled for months in the Senate in a dispute over aid to Puerto Rico.
To watch a video of the Agriculture subcommittee hearing on the farm economy, click here.