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Using tariff money to purchase crops

Using tariff money to purchase crops

The government could buy grain and export it through humanitarian programs, President Trump said

By Diego Flammini
Staff Writer
Farms.com

The U.S. government could use the money it collects from tariffs imposed on imports from China to purchase crops from American farmers, the president said.

Today, the U.S. Trade Representative increased tariffs from 10 percent to 25 percent on $200 billion worth of Chinese goods.

Those higher tariffs represent opportunities to reinvest in ag and other sectors, President Trump said on Twitter.

“With the over (US$)100 billion dollars in tariffs that we take in, we will buy agricultural products from our great farmers, in larger amounts than China ever did, and ship it to poor & starving countries in the form of humanitarian assistance,” the president tweeted.

“Buying US$15 billion of ag products from farmers would leave US$85 billion left over for infrastructure, health care and other areas,” he added.

A legal mechanism is in place for the U.S. government to purchase and export grain from farmers.

The Food for Peace Program has provided food aid around the world since 1954. The program has helped more than four billion people since its inception.

But whether or not the government could purchase enough grain to make a significant different for farmers’ bottom lines remains unknown , said Dan O’Brien, an ag economics professor at Kansas State University.

“It can be done but what we don’t know is what quantity of grain they’re talking about,” he told Farms.com. “We don’t know how much of the tariff money the government would use or if it would make a difference in market prices.”

Farm groups are unhappy with how the president is handling the situation with China.

Corn, soybeans and wheat growers farm about 171 million acres of crops and are feeling the effects of this trade war at home.

Regaining good access to China is imperative for growers, said Davie Stephens, president of the American Soybean Association.

“We have heard and believed the president when he says he supports farmers, but we’d like the president to hear us and believe what we are saying about the real-life consequences to our farms and families as this trade war drags on,” he said in a statement today.

The National Corn Growers Association and National Association of Wheat Growers also released statements about how the trade war is affecting farmers.

Comments (5)


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this will never happen in the form the President suggests! Purchasing commodities directly from farmers is the only way to be sure the money goes where it is supposed to and that will not happen as it is unfair to those farmers who have marketed their crops already. Paying out thru the marketing assistance does not remove crops from the market place and therefore has no real effect on the current market. Major rethinking the process needs to be done.
Tracy Gayer |May 13 2019 5:48PM
Only a man that has had so many bankrupt businesses could think up this idea. It's crazy. And if it ever came to pass would be a massive transfer of money (a huge tax) from the US consumer to people outside the USA. And many US firms would go out of business as their costs increased and/or China's demand for their products fell. The lesson form history is that no-one wins from trade wars.
John Strak |May 13 2019 9:21AM
The $100 billion that the US Government receives from tariffs is a tax on US consumers. We will pay this tax on imports from China. It is nothing more than a tax increase on everyday working Americans. I have seen it said that it will cost an average American family over $700 per year.
Robert A Schehrer |May 11 2019 10:44AM
BRILLIANT!!!
P.J. |May 11 2019 10:39AM
An excellent idea! China gets pressured to make a fair trade agreement that would benefit everybody in the US from this day forward, the farmer benefits with a fair price for their product, and somebody starving gets fed instead of benefiting some rich fat cat in China.
Dillday Farms |May 11 2019 7:38AM