In the US there is a dissent within the Republicans as Trump administration announced a loan waiver to farmers; However, in India, this scenario never occurred as not just the ruling party, even the opposition has always been in favour of providing relief to the farmers
In what looks like an inspiration from India's political practice of declaring massive loan waivers for farmers and sops in every budget for that class of businessmen and workers, the Trump administration announced Tuesday it would provide $12 billion in emergency relief to ease the pain of American farmers slammed by President Donald Trump's escalating trade disputes with China and other countries.
However, some farm-State Republicans quickly dismissed the plan, declaring that farmers want markets for their crops, not payoffs for lost sales and lower prices. Such sane voices, however, are rare in Indian polity.
The US Agriculture Department said it would tap an existing programme to provide billions in direct payments to farmers and ranchers hurt by foreign retaliation to Trump's tariffs.
With congressional elections coming soon, the government action underscored administration concern about damage to US farmers from Trump's trade tariffs and the potential for losing House and Senate seats in the Midwest and elsewhere.
The administration said the programme was just temporary. In India, loan waivers for farmers are a permanent fixture in every budget.
Readers may recall that the new chief minister of the Indian State of Karnataka, HD Kumaraswamy, had, earlier this month, announced farm loan waiver days after he took the charge. He said, “I’m giving one more good news to our farmers; we have decided to waive existing crop loans up to Rs 1 lakh borrowed from the cooperative sector. I have earmarked Rs 10,700 crore for this.”
Earlier, States like Punjab, Maharashtra and Uttar Pradesh announced waiver of loans to help ‘distressed’ farmers.
In May, Punjab chief minister had urged Prime Minister Narendra Modi for a debt waiver for the farmers in his State. He said, “With continued debt stress, the number of farmer suicides is increasing and there is widespread resentment amongst them.”
"This is a short-term solution that will give President Trump and his administration the time to work on long-term trade deals," said Agriculture Secretary Sonny Perdue as administration officials argued that the plan was not a "bailout" of the nation's farmers.
That provided little solace to rank-and-file Republicans, who said the tariffs were simply taxes and warned the action would open a Pandora's box for other sectors of the economy. In India, businesses other than farming have never made this demand.
"I want to know what we're going to say to the automobile manufacturers and the petrochemical manufacturers and all the other people who are being hurt by tariffs," said Sen John Kennedy, R-La. "You've got to treat everybody the same."
Sen Ben Sasse, R-Neb., said the plan would spend billions on "gold crutches," adding, "America's farmers don't want to be paid to lose — they want to win by feeding the world. This administration's tariffs and bailouts aren't going to make America great again, they're just going to make it 1929 again."
The programme is expected to start taking effect around Labor Day. Officials said the direct payments could help producers of soybeans, which have been hit hard by retaliation to the Trump tariffs, along with sorghum, corn, wheat, cotton, dairy and farmers raising hogs.
The food purchased from farmers would include some types of fruits, nuts, rice, legumes, dairy products, beef and pork, officials said.
Trump did not specifically reference the plan during a speech to veterans in Kansas City but asked for patience as he attempts to renegotiate trade agreements that he said have hurt American workers.
"We're making tremendous progress. They're all coming. They don't want to have those tariffs put on them," Trump told the Veterans of Foreign Wars national convention. "We're opening up markets. You watch what's going to happen. Just be a little patient."
Agriculture officials said they would not need congressional approval and the money would come through the Commodity Credit Corporation, a wing of the department that addresses agricultural prices.
The officials said payments couldn't be calculated until after harvests come in. Brad Karmen, the USDA's assistant deputy administrator for farm programmes, noted that the wheat harvest is already in, so wheat farmers could get payments sooner than other growers.
Soybeans are likely to be the largest sector affected by the programmes. Soybean prices have plunged 18% in the past two months.
Trump declared earlier Tuesday that "Tariffs are the greatest!" and threatened to impose additional penalties on US trading partners as he prepared for negotiations with European officials at the White House.
Later Tuesday, he tweeted: "I have an idea for them. Both the US and the EU drop all Tariffs, Barriers and Subsidies! That would finally be called Free Market and Fair Trade! Hope they do it, we are ready - but they won't!"
Tariffs are taxes on imports. They are meant to protect domestic businesses and put foreign competitors at a disadvantage. But the taxes also exact a toll on US businesses and consumers, which pay more for imported products.
The Trump administration has slapped tariffs on $34 billion in Chinese goods in a dispute over Beijing's high-tech industrial policies. China has retaliated with duties on soybeans and pork, affecting Midwest farmers in a region of the country that supported the president in his 2016 campaign.
Trump has threatened to place penalty taxes on up to $500 billion in products imported from China, a move that would dramatically ratchet up the stakes in the trade dispute involving the globe's biggest economies.
The moves have been unsettling to lawmakers with districts dependent upon manufacturers and farmers affected by the retaliatory tariffs. In Indian Parliament and Legislative Assemblies, no MP or MLA has ever drawn a parallel between farmers and other producers.
On the other hand, the opposition party in India has time and again demanded loan waivers — far from opposing the idea when the ruling party proposed a waiver at any point of time. For instance, in June when Prime Minister Narendra Modi was visiting Uttarakhand for the first time after his party came to power in 2014, opposition leader and Congress Committee president Pritam Singh was quoted as saying, "It is time for Modi to repay the debt to the people of the State by at least offering a loan waiver to farmers and a financial package for the state. It is time the prime minister began to fulfill the promises he had made to the people of the state to give credence to his words."
Sen Jerry Moran, R-Kan., said the proposal was raised a month ago when senators visited the White House for a broad discussion on trade. He said the lawmakers told the president "that our farmers want markets, and not really a payment from the government. And he said, 'I'm surprised, I've never heard of anybody who didn't want a payment from the government.'"
Sen Bob Corker, R-Tenn., who has been critical of the president in the past, said the tariffs "are a massive tax increase on American consumers and businesses, and instead of offering welfare to farmers to solve a problem they themselves created, the administration should reverse course and end this incoherent policy."
Republican Sen Charles Grassley, whose family operates a farm in eastern Iowa, said the administration's move was "encouraging for the short term" but farmers needed "markets and opportunity, not government handouts."
The Agriculture Department predicted before the trade fights that US farm income would drop this year to $60 billion, or half the $120 billion of five years ago.
Mark Martinson, who raises crops and cattle in north-central North Dakota and is president of the US Durum Growers Association, said the $12 billion figure "sounds huge" but there are many farmers in need. "I don't think this will cover us for a very long time — and it might not even buy me a tank of diesel. I think it will only put out the fire a little bit."
"We are just kind of being played," said Tom Giessel, who was cultivating his fields when he stopped his tractor to take a cell phone call from a reporter seeking his reaction to the plan.
Giessel, who grows wheat and corn near the western Kansas community of Larned, said he was "glad they are trying to be doing something, but I don't know when the day is over how much difference it is going to make. The underlying problem is still there."
The imposition of punishing tariffs on imported goods has been a favoured tactic by Trump, but it has prompted US partners to retaliate, creating risks for the economy.
Trump has placed tariffs on imported steel and aluminium, saying they pose a threat to US national security, an argument that allies such as the European Union and Canada reject. He has also threatened to slap tariffs on imported cars, trucks and auto parts, potentially targeting imports that last year totalled $335 billion.
The president is meeting with European Commission President Jean-Claude Juncker on Wednesday. The US and its European allies are meeting as the dispute threatens to spread to automobile production.
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