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The US federal government shutdown may have a significant negative impact on American farmers. Many of them are already feeling a financial squeeze from the present trade conflict between the US and China.
Because President Donald Trump made a sudden reversal on a bipartisan funding extension before Christmas, it has forced a sizeable portion of the government to shut down last Saturday. And now we are nine days later, and there is no solution.
Scott Irwin, a University of Illinois agricultural economist, said this could be bad news for farmers hoping to receive subsidies from the federal government. These subsidies were first introduced with the hope of reducing the negative impacts of the tariffs placed on agricultural goods being sent from the US to China.
Irwin told the media this week that the partial shutdown of the government may lead to delays in aid payments to American farmers.
“If you’re talking about cash in the farmer’s pocket, the longer this goes on, the longer it’s going to delay that program, which is really just getting ramped up,” Irwin told Reuters.
In August the White House administration began a $4.7 billion initial investment plan that was aimed at helping those farming corn, cotton, dairy, hog, sorghum, soybean, and wheat. It now could expand to as much as $12 billion.
The trade war has already had a clear negative impact on many American farmers who rely heavily on exports to China to make money.
In November it was reported that there are farmers in America who have been forced to plow their crops under, burying them in their fields, because there is not enough room in storage facilities, and they can’t sell their products because of the Chinese tariffs.
Almost all of the grain depots and silos are almost full, so farmers have to figure out their own storage or let the crops rot.
After the summit between President Trump and Chinese leader Xi Jinping, it was agreed that China would resume purchases of some US agricultural products, including soybeans, but the continuing government shutdown is making it hard to know whether this is happening.
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