Saturday, April 18, 2020

U.S. farm aid jumps to $19 billion

What started at $15.5 billion has ballooned to $19 billion in federal government aid for United States agriculture.

The announcement from United States Agriculture Secretary Sonny Purdue has $16 billion in direct payments to farmers and $3 billion in food purchases to bolster market prices.

The purchases of meat, milk and produce will be distributed to food banks and others who help needy people.

The direct payments to farmers is made up of $5.1 billion for cattle, $2.9 billion for dairy, $1.6 billion for hogs, $3.9 billion for row crop producers, $2.1 billion for specialty crops producers and $500 million for other crops.

Producers will receive a single payment determined using two calculations: 85 per cent of price losses between January 1 and April 15, and 30 per cent of expected losses from April 15 to June 30.

The payment limit is $125,000 per commodity with an overall limit of $250,000 per individual or entity. 

Qualified commodities must have experienced a five per cent price decrease between January and April.

There is nothing like this either federally or provincially across Canada, but Canadian farmers are left to compete against their subsidized counterparts south of the border.

And Purdue and Agriculture Minister Marie-Claude Bibeau assured the public that the border will remain open for agriculture trade.

Under normal circumstances Canada could impose countervailing duties to offset the impact of the U.S. subsidies, but the U.S. has gutted the disputes-settling mechanism at the World Trade Organization, so we're left at the mercy of U.S. President Donald Trump.