U.S. agriculture secretary tells producers no further payments are planned to compensate them for trade war with China
SAN ANTONIO, Texas — American farmers are being weaned off government support.
“Don’t make plans in 2020 for another Market Facilitation Program,” United States Secretary of Agriculture Sonny Purdue told growers attending the 2020 Commodity Classic conference.
Government subsidies have been keeping American farmers afloat during a nasty trade war with China that has seen the Asian superpower put the brakes on imports of U.S. crops like soybeans and sorghum.
U.S. President Donald Trump authorized US$12 billion in farm aid in 2018 and another $16 billion in 2019 under the Market Facilitation Program.
The lion’s share of that money went to U.S. soybean growers, prompting other exporters like Canada to complain that the direct payments were distorting markets by encouraging U.S. growers to continue planting soybeans despite a growing global glut of the product.
Purdue made it crystal clear that will not be the case going forward.
“In 2020, I’m telling you all to do what you do and plant for the market,” he told the 5,000 U.S. farmers attending the conference.
Purdue said if markets don’t move up, that will be a signal that farmers are producing too much of a certain commodity and need to scale back.
China has agreed to import $36.5 billion of U.S. agricultural products in 2020 and another $43.5 billion in 2021.
No commodity specific details have been released but the base year used for the calculations is 2017, when China bought $24 billion in U.S. agricultural products. Half of the sales that year were soybeans.
Purdue acknowledged that grain markets appear to be skeptical about the two-year pact because two months of the 2020 calendar have gone by and nothing much has changed.
“They want to see ships loaded and ships unloaded and we will see that,” he assured growers.
“We’re seeing some evidence of unloading taking place and hopefully we can get past this coronavirus pandemic very quickly and get back to the trade.”
Purdue said China can’t double the volume of trade with the U.S. without first making some regulatory changes and that is what is taking place.
In the meantime, the U.S. Department of Agriculture is implementing a “matrix of verification” to track sales to China.
“We’re going to do what President Trump says: we’re going to trust, but verify,” he said.
Purdue also had some choice words for another major player in the grains and oilseeds markets.
He said Europe must start embracing modern farming techniques and stop living in the past.
“Europe is going to become a museum of agriculture, not a productive part of agriculture.”
Purdue said he has spoken to European farmers who are frustrated that their governments continue to reject new crop breeding techniques.
“They’ve got good farmers in Europe if they would just turn them loose and let produce,” he said.
Purdue said European farmers fear American agriculture and for good reason.
“They want to denigrate American food because they’re fearful the products of the American producer will make them uncompetitive,” he said.
Purdue said attacks about American agriculture being unsustainable are unfounded because U.S. growers are dramatically increasing production using fewer arable acres.
And he appeared to address the mounting global concerns about farm chemicals.
“To be accused of doing things that would harm the land, harm the environment is just wrong and we need to tell people the truth about what’s happening out here,” he said.
“There is not a farmer in the room today that wants to poison your land so your future progeny cannot produce food on that land.”