Trump on LDCs: Give Shitholes Food Aid

♠ Posted by Emmanuel in ,,, at 5/13/2019 04:37:00 PM
Feed Shithole Countries Program [FSCP]--a forthcoming American "gift" to the world?
Sometime ago, precisely zero people were surprised when US President Donald Trump characterized what were understood to be poor, migrant-sending countries as "shitholes." Rising to political prominence on a false, racist claim--the Obama "birther" conspiracy--displaying such verbal animus was to be expected. More recently, though, Trump has been toying with the idea that all the agricultural products which would have been sold to China can instead be purchased by the US government and distributed to these "shithole" countries as food aid. This action is to be done to help farmers who voted by and large for this obese racist (who probably doesn't need more food anywaygoing by his portly physique).

Leaving aside the intent here--Trump does not have a charitable or well-meaning bone in his body (remember that his "foundation" was a scam that's since been shut down)--there are several salient points which suggest it will help neither American farmers nor citizens of poor countries if Trump's latest harebrained idea was to be implemented. Bloomberg explains.

First, this idea has already been tried before during the Carter administration, and it didn't quite work as planned:
In the 1980s, crops expanded just as the export ban caused Soviet Union countries to start buying grain elsewhere. At the time, growers could deliver supplies to the Commodity Credit Corporation below certain loan rates...

The purchases aren’t a “very effective” way to deal with overhang, “and that’s what the government eventually realized," said Arlan Suderman, chief commodities economist at brokerage INTL FCStone Inc. “It does help support cash prices, but it limits rallies in the market because the market knows if it rallies too much, there are all those bushels still in the bin that will come out.”
Second, much of what China bought was not for human consumption but rather feed for livestock. What's more, LDCs are ill-positioned to receive a deluge of food anyway:
Aid programs are also too small. The U.S. government’s Food for Peace program usually buys and ships about $1.5 billion worth of goods a year to other countries. On top of that, the nations in need are usually seeking food-grade commodities, such as rice and wheat, said Joseph Glauber, former chief economist at the U.S. Department of Agriculture. The vast majority of U.S. corn and soy production is for use in animal feed or biofuel.

Many poor countries may also not have the facilities needed to process soybeans, which can also yield cooking oil. Some countries may also be opposed to large amounts of aid because it could hurt their farmers.
Third, dumping government-subsidized foodstuffs in the developing world would constitute a flagrant violation of WTO rules specifically meant to protect poor countries' farmers from such dumping:
Trump’s move could also generate disputes in the World Trade Organization as the measures can be seen as market distorting. The aid could send prices lower, hurting countries like Brazil and Argentina, which are also major corn and soybean exporters. “You can’t just dump grain at concessional prices,” Glauber said. “That would constitute an export subsidy. That is something the WTO members agreed not to do.”
Memo to Trump: the developing world doesn't need your racism or your country's food aid.