Iowa is an agricultural powerhouse, exporting products all over the world. That’s why many are concerned about a possible trade war with China.
A program that brought Americans government cheese four decades ago could get tapped to protect U.S. farmers if escalating tariff threats between the U.S. and China break out into a full-fledged trade war.
But U.S. lawmakers and experts question whether taxpayers would support spending billions of dollars through the Commodity Credit Corp. to purchase surplus food to support farmers.
“The best approach is not to get into a trade war to begin with, rather than figuring out how to spend billions of taxpayer dollars to bail out farmers,” said Ferd Hoefner, senior strategic adviser for the National Sustainable Agriculture Coalition, a Washington, D.C., group that represents several farm group.
“We shouldn’t get into a trade tit-for-tat that puts the American farmer at risk,” he said.
President Trump has promised to protect U.S. farmers from the backlash of an escalating trade dispute with China, directing U.S. Ag Secretary Perdue earlier this month to use “his broad authority to implement a plan to protect American farmers and agriculture.”
Perdue has been tight-lipped about how he proposes to help farmers, saying he doesn’t want to give “away our playbook” to China.
But the Commodity Credit Corp. likely will play a role.
Here’s why: The USDA agency, formed in 1933 at the height of the Great Depression, has broad authority to support farm prices and incomes.
While it might be best known for giving millions of pounds of cheese to Americans during the 1980s and 1990s, the Commodity Credit Corp. also buys and donates surplus food supplies to schools, food banks and countries struggling with hunger, said Chad Hart, an Iowa State University economist.
The agency, a government-owned corporation with $30 billion in bonding authority, makes loans and provides direct payments to farmers when prices for corn, soybeans, wheat and other products are low.
‘If the government buys corn, what are they going to do with it?’
Soybeans and pork production, two areas in which Iowa is a national leader, would likely see some of the biggest hits with added Chinese tariffs.
The communist country has proposed tariffs on $50 billion…