President Biden on Thursday, April 28, asked Congress to provide $500 million for agricultural subsidies to increase U.S. production of crops, particularly wheat and soybeans, to address lost production world expected from Ukraine due to the invasion and continuation of the war provoked by the Russian President. Vladimir Poutine.
In remarks to the White House on his $33 billion overall request, Biden said, “Ukraine was one of the largest agricultural producers in the world. It typically produces 10% of all the wheat shipped globally. »
“Putin claimed that the sanctions prevent Ukrainian and Russian food products from entering the market – the sanctions that we imposed on Russia. Simply not true,” Biden said.
“Putin’s war, not the sanctions, is impacting the food harvest and disrupting the movement of that food by land and sea to countries around the world that need it.
“This funding will help mitigate rising food prices at home and abroad caused by Russia’s war in Ukraine.
“It’s going to help American farmers produce more crops like wheat and oilseeds, which is good for rural America, good for the American consumer, and good for the world.”
In a letter to House Speaker Nancy Pelosi, D-Calif., Biden wrote, “Additional food security and humanitarian assistance will get wheat and other commodities to those in need, build countries’ resilience in the face of global food supply and price shocks, and provide life-saving relief. aid to those displaced or otherwise affected by Russia’s war in Ukraine.
Biden added that the request “includes funding to support the production of food crops in the United States that are experiencing global shortages due to the war in Ukraine, for example, wheat and soybeans helping to meet rising food prices. food prices here at home and around the world.”
A White House fact sheet said: “An additional $500 million in domestic food production assistance will support the production of American food crops that are experiencing global shortages due to the war in Ukraine, for example, the wheat and soy. Through higher loan rates and crop insurance incentives, the demand provides better access to credit and reduces risk for farmers who grow these foods, while lowering costs for American consumers.
The Food and Environment Reporting Network said in a report: “Some $400 million would be spent on higher loan rates for food crops, such as wheat, rice, pulses and oilseeds, including soybeans, canola and sunflower. Farmers would be encouraged to grow more wheat by doubling it with soy via a crop insurance incentive.
FERN added that the Department of Agriculture “estimates that wheat farmers could harvest enough wheat next year to offset up to 50% of Ukraine’s wheat exports.”
“Ukraine has exported an average of 19 million tonnes per year over the past two marketing years. Half that volume — 9.5 million tonnes, or nearly 350 million bushels — would equal 18% of the USDA’s forecast crop of 1.94 billion bushels this year. There are 36.7 bushels of wheat in a ton.
Under the White House proposal, loan rates for food crops would be increased for two years. The loan rate for wheat would increase by 63%, oilseeds by 40% and rice and pulses by 21%. The loans would run for 12 months. Currently, repayment is generally due in nine months.
To encourage more double-crop wheat, the administration proposed a $10 per acre incentive on crop insurance premiums for soybeans that are planted after wheat.
Reaction to the proposal was mixed.
Joe Glauber, a former USDA chief economist now at the International Food Policy Research Institute, told FERN sky-high commodity prices are already prompting farmers to plant more crops. FERN said Glauber was skeptical of the short-term impact of the White House proposal. The wheat incentive was aimed at the 2023 crop, not this year’s, he said.
“It’s totally baffling to me,” Glauber said. The wheat incentive was convoluted, he said, because it is tied to crop insurance coverage of the soybean crop that would be planted after the winter wheat harvest in late spring.
The National Wheat Growers Association told FERN it will work with Congress to refine the administration’s proposal for more double-crop wheat.
“We would like to see wheat production encouraged across the country and incentivize spring and winter wheat growers,” said Chandler Goule, general manager of NAWG.
A spokeswoman for the American Soybean Association said, “We look forward to hearing more details. The ASA appreciates that the administration is considering a role for agriculture and working with Congress on next steps.
Senate Agriculture Committee staff told DTN/Progressive Farmer during a Senate Agriculture Committee field hearing in Michigan today on the next farm bill they have. were briefed on some details of the package on Thursday, but had not seen details of the Biden administration’s request.
DTN/Progressive Farmer also noted that the World Bank has forecast commodity prices to remain high for several years. A World Bank report said, “For most commodities, prices are expected to be significantly higher in 2022 than in 2021 and remain elevated over the medium term.”