Sunday, May 12, 2019

South Dakota, SSR

     Having completely fouled up the production and marketing matrix that sustained South
Call It Humanitarian Aid
But It's Just Another Boondoggle
Dakota farmers for decades, our benevolent comrades in Washington, D.C. are trying to make amends.   
Coming up with one of the most socialistic schemes I've ever seen in the government's quest to support our farmers, who've been clobbered by the "so easy to win" trade war with China, President Trump yesterday announced that the United States government would buy American crops to offset losses in the farm belt.  Apparently, the plan is to abandon existing market mechanisms and let central planners in Washington decide the disposition of affected products--soybeans being high on the list--by buying them and determining their distribution.
     Though it's a far cry from the collective farming methods used by the Soviet Union during most of the 20th century, this aspect of intervening in the free market dispostion of agricultural products is Soviet-style farm policy.  There was no market in the Soviet Union for farmers, only government controlled supply and demand.  By effectively creating the oversupply of soybeans via its misguided tariff war, the Trump administration has now stepped in on the demand side and promised $15 billion worth of purchases of soybeans and other affected crops.  The president has said that the products would be distributed to "poor and starving" countries as a gesture of humanitarian aid.
     On the surface, you have to admire Trump's magnanimity, but I doubt that the president has a clue about the mechanics and logistics of this distribution scheme, nor a sense of the history of American food aid and its effects on the countries receiving it.  Federal agencies called upon to make this happen haven't disclosed even the outline of a program, which has to be an enormous challenge, considering the hundreds of millions of bushels of product that have to be harvested, stored, transported to ports, and shipped to myriad countries around the world.  I doubt this could happen in the space of a crop year.
     In the meantime, food aid has at best a checkered track record when it comes to doing much good in the countries that receive it.  The National Bureau of Economic Research studied this in 2012 and concluded that "U.S. food aid increases the incidence, onset and duration of civil conflicts in recipient countries."  A Foreign Policy analysis titled "Please Don't Send Food" reaches much the same conclusion.  Well-intentioned as they've been, U.S. food aid programs have created more problems than they've solved.  Using the "give the man a fish/teach a man to catch fish" dictum, helping develop food production techniques is probably a much better way of assisting undernourished populations.  Sending teams of ag-technicians instead of food is a common sense approach that most South Dakotans would probably understand and appreciate.  Tossing food at hungry people is simply a grandiose version of throwing rolls of paper towels at victims of natural disasters.
    Basically, the Trump administration is using the patina of public-relations to sugar coat what is essentially a payoff to farmers whose crops have become unmarketable thanks to the tariff wars.  It's a nice try, but it's not easy to fool free market adherents, who used to be called Republicans.

1 comment:

  1. The cynic will avow that the Trump campaign/administration secured the allegiance of the 'donor class' with the promise of tax cuts and regulatory 'freedom', and the support of a not inconsiderable portion of the electorate with racism, homophobia, xenophobia, and misogyny. Faced with a massive circumstance of economic mismanagement, by a president whose financial acumen is increasingly under question, I can't help wondering if those once bought will remain so.

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