The losses incurred by the ag sector might already exceed the size of the ag sector bailout proposed by Trump. One constraint is the WTO.
Credit: Russell Hodin, via Ian Bremmer. [added 7/26, 1:34PM Pacific]
In the WTO Agreement on Agriculture, the US entered into some constraints on the amount of trade-distorting measures in the agriculture sector. Such measures fall into the “amber box”, which can be best understood by referring to this schematic, from a 2005 CBO analysis (I was a reviewer), back in the time when we were fighting to liberalize the agricultural trade regime.
Source: CBO, “Policies that Distort World Agricultural Trade,” CBO Paper, August 2005.
According to Politico “Morning Trade” today:
A USDA official provided some reassurance that the payments won’t push the U.S. beyond its dreaded “amber box” subsidy limits at the World Trade Organization. The U.S. agreed to a $19.1 billion cap on trade-distorting subsidies when it joined the WTO.
USDA trade counsel Jason Hafemeister said the U.S. currently reports to the WTO about $5 billion worth of domestic support that could potentially skew world trade.
“I think you can be confident that as we’ve looked at these programs, looked at our numbers, we should be below our ceiling for trade-distorting domestic support,” he said.
Taking this conclusion at face value requires that (1) no more than $12 billion of direct subsidies are disbursed, (2) the $5 billion current subsidy number is correct. I’m not sure regarding (2) — after all numbers and facts are malleable in this administration. In point of fact, consider CBO’s estimates of expenditures under the commodity and diaster program.
Source: Johnson, Monke, “What is the Farm Bill?” CRS Report RS22131 (April 26, 2018), Table 2.
The red portion of the bar for 2018 looks larger than $5 billion, although I don’t know how disaster payments fit into the WTO constraint.
On (1), I wonder how restrained Mr. Trump will be going forward, given the incurred costs might already exceed $12 billion. Even if the US stays under the limit, the additional intervention is sure to irritate our trading partners, who may in turn escalate their spending.
And hence, we retreat on our long-standing goal of reducing price-distorting subsidies in the agricultural sector. Perhaps it’ll take something like the ballooning of ag expenditures in the Reagan 1980s, and the 2000’s to spur a pruning back of these programs.
Source: Johnson, Monke, “What is the Farm Bill?” CRS Report RS22131 (April 26, 2018), Table 3.
“The losses incurred by the ag sector might already exceed the size of the ag sector bailout proposed by Trump. One constraint is the WTO.”
I noted earlier that Kudlow – Trump’s chief economics liar – said this would cost less than $12 billion. You note why covering up the mess they created would cost a lot more as in “inadequate”. Of course PeakDishonesty said this was “appropriate”. Which actually means Peaky is AOK with failure to protect Trump’s base. Yes Trump is a failure and his base applauds him for failure.
Does Trump even know of the WTO?
I doubt it. Those three letters are at the back half of the alphabet. Trump always got stuck at “D” because it stood for “Donald”. Of course, it also stands for “Dimwit.”
I doubt Trump cares one bit about the WTO. What are they going to do?
Trump is the Honey Badger: https://www.youtube.com/watch?v=XcCH18lSzV0
corrected link: https://www.youtube.com/watch?v=4r7wHMg5Yjg
Killer whale! Yes – Trump is all about killing the progress we have made as a nation. Make America White Again!
“D” is for Dotard!
Looks like Trump is becoming the type of president he always accused Obama of being.
Every accusation is a confession etc etc.
How funny is it watching the usual anti-Trumpers searching for another nonsensical argument to support their anger? We know you actually feel the anger you express, but we also know how weak are your arguments.
What you don’t yet comprehend is that Trump was elected as a direct counterpoint to your ongoing emotional responses we’ve observed for years. Ridiculing the deplorables and hicks, arrogantly expressing derision of the country, its history, the flag patriotism, our military, our religious beliefs, and the many other things conservatives hold dear has resulted in electing someone who strikes back.
Trump’s election is a direct result of your own actions. He sensed what many conservatives wanted him to do, promised he’d do it, and is successfully following through on his promises. His approval is growing no matter what you say and do. You have given him a long list of policy and attitude corrections that need to be made, and your actions and comments are adding to that list.
You’re up against a doer and fighter and not a politician. Please keep it up!
CoRev Trump appeals to ignorant voters…folks like you. You’ve even admitted that you haven’t read any macro textbook or international econ textbook or micro textbook. Trump’s appeal is to voters who are attracted to the “strong man” of history. It’s deep in the reptilian part of the conservative brain. And I love your comment about deriding history and the military and religious beliefs…this coming from someone who’s basic understanding of history stops at the high school civics level; couldn’t tell you the origin of the rank of colonel; and never read anything beyond parts of the bible. Ever read Reinhold Niebuhr? I have. Ever read Thomas Aquinas? I have. Ever read John Calvin’s Institutes? I have. Ever read Maimonides? I have. And how many agnostic or atheist works have you read that might question your religious beliefs? I’ll bet none. Here’s a new(ish) book that you might find challenging to your religious beliefs in the supernatural and “magic” touches:
https://www.amazon.com/Big-Picture-Origins-Meaning-Universe/dp/1101984252
Try challenging yourself a little.
He sensed what many conservatives wanted him to do,
What many conservatives sensed was the dawning realization that the world was passing them by. The unifying principal around today’s conservative movement is a fierce anti-intellectualism. You yourself like to brag about how ignorant you are about textbook econ and econometrics. The deplorables were sick and tired of always being outsmarted and losing intellectual arguments, so instead of deciding to make themselves smarter, they lashed out at the ballot box. But that lashing out was self-destructive and is ending up hurting the people who most believed in him.
You’re up against a doer and fighter
You’ve just made my point about the appeal for conservatives of strong men rather than intelligent men. But Trump’s bravado is all hat and no cattle. Kim played him for a fool. Trump looked groveling standing next to Putin. And yesterday the EU played Trump like a fiddle by flattering him into thinking he’d just won a great trade war battle when all he did was reset things to where they were before he launched his tariff tantrums.
2slugs, you proved that the arrogance is out of control. More importantly you confirm: “What you don’t yet comprehend is that Trump was elected as a direct counterpoint to your ongoing emotional responses we’ve observed for years.”
With your own arrogant comments “Trump appeals to ignorant voters., Trump’s appeal is to voters who are attracted to the “strong man” of history., (Not betas), basic knowledge of history stops at the high school civics level, then you a provide your reading list which has little to nothing to do with your understanding of any of it” We understand that the liberal mind is superior über alles!
Your 2nd response is totally wrong. Conservatives reacted to your actions because they did not believe liberals were going to improve the country. Finally, we are seeing the true picture of how far left liberals had drifted, and what “the fundamental transformation of America” meant. Embrace your own role in this counter revolution, Making America Great Again.
Your dislike/hatred of what the US stand for doen’t allow you to see any progress. Your anger only allows you to see the shortest most negative views of events, while losing any understanding of what the bigger picture might be. You react with anger and don’t think.
basic knowledge of history stops at the high school civics level, then you a provide your reading list which has little to nothing to do with your understanding of any of it
The “reading list” was intended to show you that some of us are far more learned about religious beliefs than your standard issue Bible Belt Republican. Who would be on your reading list of serious religious scholars? Jerry Falwell? Billy Graham? Oral Roberts? Joel Osteen and his Prosperity Gospel crap?
Conservatives reacted to your actions because they did not believe liberals were going to improve the country.
I think the key word here is “believe”. Conservatives don’t seem to have a lot of intellectually credible arguments, so they rely upon a belief in their gut.
Your dislike/hatred of what the US stand for doen’t allow you to see any progress.
Your heror worship of Dear Leader Trump doesn’t allow you to see regress. He’s done nothing to make international trade freer. He’s done nothing to balance the budget. He’s done nothing to improve race relations. He’s done nothing to make our allies more secure. He seems to have the reverse Midas touch. Instead of everything turning to gold, it turns to shit. Is that what you meant when you claimed that Trump has some kind of supernatural “magic touch”?
2slugs, everything you have said reinforces our belief in him over your complaints. For instance, He’s done more than the last administration to make international trade freer and more fair to US interests. He’s done nothing to balance the budget, because he never promised to do so. He’s done more to improve minority economic standing than the previous administration. He’s done more to ensure our allies are more capable than relying on US assets than the previous administration. The remainder of your comment is out in la la land.
The beginning of this comment is just crazy, angry arrogant look at me BS.
CoRev He’s done more than the last administration to make international trade freer.
Are you drunk? In what world do tariffs and trade wars enhance freer international trade??? This is one of the stupidest things I’ve heard in a long time.
He’s done nothing to balance the budget, because he never promised to do so.
Funny how you marched with Tea Party types against Obama’s deficits when the economy was in a deep recession, but you seem quite relaxed about Trump’s yawning deficits when the economy is at full employment. And apparently you still don’t understand the connection between budget deficits and trade deficits. Hint: we don’t have chronic trade deficits because of unfair trade practices by the Chinese or the EU countries.
He’s done more to ensure our allies are more capable than relying on US assets than the previous administration.
Hmmm…so he’s cutting back on ERI???
How many ways can 2slugs be wrong? In almost every way! “Funny how you marched with Tea Party types against Obama’s deficits when the economy was in a deep recession, …” nope! I did march against Obmamacare.
The key context of my prior comments was the arrogance of liberals thinking only they had the best solution. Nearly every one of your comments has emphasized your own arrogance, anger and blind belief in liberal/Obama solutions.
And yet you still don’t understand or recognize the importance of the your actions and those others like you in determining Trump’s successful election.
“Why stop at $12 Billion?”
1) Crop insurance can cover some of the income loss.
2) Other markets can be found and guaranteed. See the new EU agreement to immediately start buying US soybeans.
3) Farmers losses are more important than the futures traders losses, which have other methods to mitigate loss.
4) Perhaps most importantly, this is just part of as negotiations for improving overall international trade conditions for the US so is accordingly a short term condition.
5) WTO is slow and toothless.
Stop calling it “crop insurance”. Insurance is funded by subscribers who pay a premium. The $12B is just taxpayer money being handed out through a program that administers crop insurance. This is a bailout, plain and simple.
The EU did not agree to “immediately start buying US soybeans.” The EU agreed to increase its imports of soybeans. The EU did not say when or by how much. But more importantly, the EU didn’t agree to do anything more than what it intended to do anyway irrespective of the tariffs.
Farmers losses are more important than the futures traders losses, which have other methods to mitigate loss.
Just a few weeks ago you were telling us that farmers had plenty of ways to mitigate losses. Quite a turnaround.
this is just part of as negotiations for improving overall international trade conditions for the US so is accordingly a short term condition.
This is just incoherent gibberish. Trade negotiations have always been ongoing since Adam and Eve rode around on the backs of dinosaurs (see, I do understand conservative religious beliefs). They didn’t just start at noon on 20 Jan 2017. But killing TPP is hardly a good way to improve overall international trade conditions. And thinking about withdrawing from the WTO doesn’t sound promising either. It’s the old Trump tactic of cutting off his nose to spite his orange face.
WTO is slow and toothless.
Ask Bush 43 if it’s toothless. As to being slow, some might call it deliberate. But then again, conservatives always prefer to start building something before reading the instructions. It’s the manly thing to do.
2slugs, you again show your ignorance. I said: ” 1) Crop insurance can cover some of the income loss.” You then claimed: “Insurance is funded by subscribers who pay a premium.” While confusing my comment to mean it is replaced by the $12B. Crop insurance is just one source for farmers to mitigate financial loss.
And your comment re crop insurance is like so many of your comments, too simple!
“…In purchasing a crop insurance policy, a producer growing an insurable crop selects a level of coverage and pays a portion of the premium —
or none of it in the case of catastrophic coverage — which increases as the level of coverage rises. The federal government pays the rest of the premium
(62%, on average, in 2014…”
you still don’t want to admit most soybean farmers have not sustained a loss. Sonny Perdue, explained it in announcing the $12b grant. Please look it up and learn something.
The remainder of your comment is even worse than the errors I just pointed out.
CoRev The federal government pays the rest of the premium
In other words, farmers are fine with getting a 62% government subsidy because that doesn’t sound like welfare. What a joke. Crop insurance is supposed to be for “acts of God.” Oh wait, you regard Trump as God incarnate, so maybe his self-inflicted violence to soybean prices is a kind of “act of God”.
most soybean farmers have not sustained a loss
But in your previous post you said:
Farmers losses are more important than the futures traders losses
No contradiction there. So apparently farmers won’t suffer a loss if the government provides welfare for farmers. In that case, why not provide welfare for anyone that might otherwise suffer a loss?
2slugs, you are getting even more incoherent. If you actually knew about farming you’d understand the contradiction is in your mind. Here’s a hint: think about when insurance is paid. Before or after an event? BTW, my proof or how little you actually understand about crop insurance was in figure 3. I’ve been consistent as has your ignorance.
CoRev In this particular case, the bailout payments will begin in September. The soybeans will still be drying in the fields. The bottom line is that the $12B “crop insurance” bailout is not insurance in the normal sense of the term. It’s simply welfare for farmers.
2slugs “The bottom line is that the $12B “crop insurance” bailout is not insurance in the normal sense of the term. It’s simply welfare for farmers.” You still don’t understand the contradiction. ONLY YOU HAVE CLAIMED THAT THE CROP INSURANCE WAS THE BAILOUT.
CoRev calls Trump a doer and a fighter. WTF? Face to face Trump folds like a little girl. OK – when he gets on the Twitter had gets bold but face to face he is coward. Doer? Besides a lot of tweeting – he has done very little so far. For which I am thankful as what he wants to do would set us back to the slave era.
let’s call it for what it is. a $12 billion dollar conservative slush fund to buy midterm voters. funny how peakloser and corev will cry that democrats are buying the black vote with welfare (they are not-most of it goes to nonblack folks), but do not seem to acknowledge this “bailout” is nothing more than buying the vote. fascinating way to rationalize one’s worldview.
If we spent $12 billion on health care for someone who really needed it – it would be SOCIALISM. Bailing out a really dumb trade war is called PATRIOTISM. Orwell rules!
Baffled, it’s a safety net. May not even be needed, but we’ll see. You do like safety nets don’t you?
Safety net for corrupt Republican politicians – got it!
“safety net”. cute. you can rationalize anything corev. welfare for farmers to vote in the midterm election. nothing more, nothing less. why should we have a safety net to protect against trump policies?
Baffled asks: “why should we have a safety net to protect against trump policies?” Because Govt policies take timed to be implemented
and their positive effect are delayed. Do you want the current trade inequities to continue tot eh detriment of US businesses? How long, until most production is totally gone?
Are you that dense and angry? Or just oblivious?
you have an interesting way of rationalizing your acceptance of bailouts and welfare for votes, corev. if you are black, you are a welfare queen. but if you are white, you are a patriot deserving of government support.
“Because Govt policies take timed to be implemented and their positive effect are delayed.”
again, we need a safety net for trump policies. are you dense and angry? or just an idiot?
Baffled, racist! How could you have brought up my or anyone’s race? Only a racist does that!
W’ve been talking about soybean prices for months now, and last week Sonny Perdue and even a few farmers agreed that they had still not been hurt by the prices. How long before they feel the pain y’all are hoping for? Or perhaps the EU soybean buys will occur (Y’ano those buys you do not want to admit are even possible), and perhaps Trump’s overall strategy will change Chinese policies?
corev, i simply find it interesting you have no problem providing welfare to a white farmer, but cannot help a black welfare queen? and i called nobody a racist. i only observed a distinction between the races. why are you so offended? i am not wrong in my descriptions.
if soybean farmers are not being hurt, then we really have no need for a $12billion dollar bailout, right? and yet it exists. again, we need a safety net for trump policies. idiot.
Baffled, you are a racist. Even talking about race makes you such, but repeating racist comments after being called out makes your racism even more obvious. White farmer and black welfare queen are indicators of your warped racist beliefs.
You ask: “if soybean farmers are not being hurt, then we really have no need for a $12billion dollar bailout, right?” With any luck, you’re correct. But, we have FEMA, remember that old thread, just in case of need also, right? I’m suprise you haven’t brought up all the black welfare queens helped during Katrina.
Menzie Your Grant Wood caricature is a little behind times. Instead of the old red MAGA hat, Trump introduced a new green “Make Our Farmers Great Again” hat at an Iowa rally today.
https://www.radioiowa.com/2018/07/26/trump-brings-make-our-farmers-great-again-cap-to-iowa/
sales, marketing and branding are trumps strengths. follow through is his weakness-that is where his bankruptcies came from.