In late May, the President unveiled more aid to farmers in a $16 billion package. The tariff President wants to ensure some people receive help for changing trade deals with China. In an article by Humeyra Pamuk of Reuters, said payments rates to farmers would be determined by where they farm rather than what crops they grow.
If you want to be cynical, you would say an election is coming soon and some farmers were a key voting block and they might swing some states to the President. The big crop is soybeans which more than 60% of the crops went to China. The decrease is partly due to tariffs as well as soybeans were going for food to pigs. There is an pig virus in China which has reduced the number of hogs or less demand for soybeans.
The Secretary of Agriculture Sonny Perdue said the aid was based on feedback of last’s years aid package and will have a single payment rate for the county calculated by the damages in that area, instead of a rate for every commodity across the country.
Linking to dividend paying stocks, governments can and will pursue different policies depending on their agendas. For all policies, there are some that benefit and some that lose, on the expectation in general it will be better in the future. It can be good that the aid packages have been changed because of crisis, but the crisis is one of the government’s making. so aid should be given. When you invest in agriculture companies which is good because we all need to eat, government policies need to be taken into consideration.
There are more questions than answers, till the next time – to raising questions.