US farmers fret over China trade threat to aid deal
Plan to buy surplus crops leaves soya farmers in uncharted territory
Gregory Meyer in New York, Financial Times
May 13, 2019
In late February, with American and Chinese diplomats enmeshed in trade talks a week before a since-extended deadline, a top US agriculture official explained what he hoped would result from a deal.
“I think we’ll see free, fair and reciprocal trade,” Ted McKinney, undersecretary for trade and foreign agricultural affairs, told reporters.
If free trade is the goal, the White House is taking a roundabout route. As Donald Trump raised tariffs to 25 per cent on $200bn worth of Chinese imports last week, the US president declared he would use the proceeds to buy up surplus agricultural products and ship them to “starving countries” as humanitarian aid. The US agriculture department soon announced it was readying a plan.
The proposed state crop purchases pushed agricultural markets further into uncharted waters a year after the dispute flared between the world’s two largest economies. Soyabean futures marked a new more-than-10-year low in Chicago on Monday, tumbling 2.1 per cent to $7.805 a bushel.
US soyabean shipments to China effectively dried up last autumn after Beijing hit them with a 25 per cent tariff. Since December, when trade talks restarted, China committed to buy 20m tonnes in a sign of goodwill. About 5.6m tonnes have since left US ports.
Another 7.4m tonnes have been sold but not yet shipped. Farmers now fret that China will cancel the sales.
The new US tariffs are “going to extend this trade war,” said Bill Gordon, who farms corn and soyabeans on 2,000 acres in southern Minnesota. “We’re already bleeding. It’s going to prolong that haemorrhage and not a lot of us are going to be able to make it.”
Recognising the farmers’ plight, the US government last year authorised a $12bn bailout programme that included up to $7.2bn in payments for soyabean growers. The US also approved the purchase of $1.2bn of foods for donation to domestic charities…
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