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American farmers become direct victims to trade war

By Wu Lejun (People's Daily)    17:11, August 06, 2018

“Farmers want trade not aid. Tell the administration and Congress ‘Open markets and end tariffs,’ ” said a video advertisement denouncing the US-led trade war which hurts the interests of the US farmers, warning that American farmers have fallen into victims of the trade war.

The 32-seocnd video clip, in which the US administration was blamed for its trade policies that have brought negative effects on national economy, aroused heated discussion after being aired in the US mainstream media.

The meat storage in the US refrigeration houses is piling up owing to the trade conflicts and tariffs hike. It is estimated that the amount of beef, pork, turkey and poultry stored in the US factories will make a record of over 2.5 billion pounds (1.125 billion kilograms).

A research by Iowa State University indicates that pork processing enterprises will lose $18 for each pig, and face an annual loss of over $2 billion, after relevant countries take retaliation measures to counter the extra tariffs imposed by the US government on steel and aluminum products since this March.

The pork producers now face huge economic losses resulted from the escalated trade conflicts, said Jim Heimerl, president of the US National Pork Producer Council (NPPC), adding that some of these enterprises may go bankruptcy.

Meat production has been ramping up in the last decade and is expected to hit a record of 103 billion pounds this year, according to the US Department of Agriculture.

Such a situation will make the meat producing industry more dependent on exports, but now Mexico and China, the largest meat importers, both announced to increase tariffs on imported pork from the US as a response to the additional tariffs levied by the US on imported steel and aluminum products.

In 2017, the US exported nearly 17 percent of its pork production to China and about one third to Mexico, according to NPPC statistics. A pig was worth $147 on average in 2017, $54 of which should be attributed to exports, said NPPC’s spokesperson Jim Monroe.

The spokesperson added that roughly 550,000 jobs were related to the pork industry last year, and 110,000 of them were created by export business. Mexico and China are major markets for the US, and the hog industry will face more uncertainties if the trade disputes continue.

“We are victims and we know it on the first day,” said Ken Maschhoff, chairman of Maschhoff Family Foods and co-owner of the country’s largest family-owned pork producer. Maschhoff was also the chairman of NPPC trade policy committee.

A continued drop of pork price will force the farmers to live on the low incomes from pork and soybean businesses, and some even have to sell their farms, The Missourian commented on its website.

China provided an opportunity by reopening its market to US beef not long ago, but now the escalating trade conflicts between two countries have brought so many uncertainties that threaten farmers in Montana, a big agricultural state in the US, Brett Doney from Great Falls Development Authority told People’s Daily.

It may take a generation to build customers again if the agricultural producers lose the market, Doney added.

The cost of doing business with the US will grow as the trade conflicts aggravate, said Lola Raska, Executive Vice President of Montana Grain Growers Association (MGGA).

The interests of American farmers will be greatly damaged if wheat buyers give up Montana and turn to producers in other places, noted Raska, adding that it will be less possible for the buyers to go back to the US market after they start changing the formula or processing procedures of wheat products.

The US government recently announced an agricultural subsidy plan worth $12 billion to aid the domestic soybean producers whose interests have been hurt by the trade disputes, along with sorghum, corn, wheat, pork and dairy.

But the plan was strongly opposed by a large number of congressmen, representatives of agricultural associations and farmers, who claimed that they wanted a market, not subsidies and urged the administration to end the trade disputes with other economies as soon as possible.

“This trade war is cutting the legs out from under farmers and the White House’s ‘plan’ is to spend $12 billion on gold crutches,” said Senator Ben Sasse, a Nebraska Republican, noting that farmers want to feed the world instead of getting subsidized and hurt.

Senator Ron Johnson, a Wisconsin Republican, echoed to the farmers, saying they want “trade, not aid.” 

American farmers want trade agreements not subsidies, said Brian Kuehl, Farmers for Free Trade Executive Director, “the best relief for the trade war would be ending the trade war.” 

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Web editor: Bianji, Hongyu)

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