Echoes of war: the trump has forced American farmers to destroy the crop

© RIA Novosti / Igor Alienability in fotobanka harvest soybean fields. Archival photoEchoes of war: the trump has forced American farmers to destroy the crop© RIA Novosti / Igor Ajankohtaista the image Bank

Launched by Donald trump’s trade war with China once again hit American farmers. Due to retaliatory customs duties the export of soybeans has actually stopped. As a result, thousands of farmers were on the brink of ruin. What awaits US agriculture and why attempts to save the industry more reminiscent of the era of the great depression — in the material RIA Novosti.

Even if warned

Growing demand for soybeans in China could not remain without attention of American farmers, long accustomed to deliver this culture for export. This year, soybean in the US has provided 89,1 million acres of land — two times more than the year before.

Farmers had hoped to increase the already high proportion of beans in the structure of us exports (soybeans accounted for nearly 60% of deliveries of agricultural products from the US to China). However, the conflict of trump’s main trading partner countries has led to the fact that Beijing has imposed 25% duty on U.S. soybeans. As a result, the profitability of the export of this crop has fallen to virtually zero and delivery to China fell by 98%.

Although soybean is a strategic product for China in Beijing sensibly decided that in the world there are other suppliers who will happily take the place of Americans.

According to the USDA, in 2017-2018, the US controlled 35% of the world soybean market. Only 2% less was the share of Brazil, 14% were in Argentina and the rest of the world. Figure China — 4%.

While Brazil has occupied 47% of the Chinese soybean market, and Argentina is only 5%. Now, both countries expect to increase.

Termination of a trade war is the only thing left to hope for American farmers. Theoretically it could happen, after talks Donald trump with XI Jinping next week in Argentina at the summit of «Big twenty».

However, with the new bellicose statements by Washington to Beijing, for example, an appeal to the European companies not to buy Huawei products, the chances for the restoration of normal trade between the two countries is close to zero. Grown this year beans can hardly wait for good news.

However, most manufacturers of soy today is simply destroying crops and burying it in the ground or leaving to rot in the field. So did American farmers during the great depression in the 1930-ies.

President Roosevelt then had to pass a special act on assistance to farmers. Many economists still believe this document is disputed: Roosevelt forced the farmers to destroy the crops (and livestock — livestock), to artificially create shortages in the market and raise prices.

What led such an economic policy, is best illustrated by the Pulitzer prize novel by John Steinbeck «Grapes of wrath».

«This is a crime that has no name. This grief can not be measured by any tears. This defeat, which frustrated in all our successes. The fertile earth, the straight tree rows, the sturdy trunks and juicy fruits. And children dying of pellagra must die because oranges do not bring profit <…> And they are speechless and look at passing the potatoes, hear the squeal of pigs, which are cut and covered with lime in the ditches, looking at the orange of three mountains, which slide down mudslides fetid manure; and in the eyes of the people defeated; in the eyes of the hungry anger is brewing,» wrote Steinbeck in 1939.
Russia joins the race

As for China, Beijing successfully expanding its procurement of soybean. Soon one of the largest suppliers will be included and Russia: the far East is ideal for growing this crop, and prospective acreage are much closer to China than the us.

According to the head of the Agency of the Far East to attract investment, Valery Dubrovsky, the region expects investments for the development of about one million hectares of agricultural land. Half of the money will come from China.

The Chinese COFCO Corporation has already filed an application for the grant of resident status TOR St. Michael in Primorye (TOP — priority development areas, special economic zone). The company plans to build in Russia a large grain Elevator and warehouse for storage of agricultural products.