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- Portuguese!What’s your first language??
- Portuguese!What’s your first language??
Okay, can we pity their children who didn't vote for him at least?
You guys have to understand just how interconnected farmer economic stability is tied to USAID.
Essentially, farming doesn't make money because we produce more food than the nation needs to support itself -- too much supply. However, if we reduced farming to just US needs, the farming industry itself would die -- not enough demand. So, the US government, through organizations like USAID, buys a shit ton of US agricultural production and then redistributes it around the world. This creates the demand that justifies our farming industry producing enough food to stay solvent.
When USAID starts cancelling contracts and other projects, part of what that money was buying was from US farmers. Without that income, many farmers run the risk of not being able to sell their supply. This means that either prices drop, hurting them, or the supply sits unbought and they eat the storage costs, also hurting them.
Big farms might be able to weather the storm but the smaller guys with narrower margins are going to suffer.
The bankruptcy numbers are just an indication that the trickle down effect is starting to take a toll.
That's not how this works. No farms with contracts to USAID are directly affected yet. But farmers buy seed, equipment, etc. based on projections that are often months in advance. But they're also buying on credit. If market direction deviates from the previously anticipated direction, the financial impacts hits all farmers, not just the ones withr immediate contract with USAID hits.According to that article no farms are affected yet, but they will be in the future. So, none of the foreclosed farms in the OP are a result of USAID cuts.
That's not how this works. No farms with contracts to USAID are directly affected yet. But farmers buy seed, equipment, etc. based on projections that are often months in advance. But they're also buying on credit. If market direction deviates from the previously anticipated direction, the financial impacts hits all farmers, not just the ones withr immediate contract with USAID hits.
For example: Imagine that 6 months ago, a farmer bought seed with the expectation that the market for his yield will be $5. He's buying that seed on a loan. However, if the market learns that USAID will be purchasing less product in the future, now you have the same supply and less demand. That means that the market price for that future yield is only $4.
Depending on the margins that our farmer is holding on his crops, he might no longer be in a position to service his debt. It doesn't matter if he has a contract with USAID. He's selling to the market and the market is paying less.
That's what I mean by the interconnectivity of USAID and farming. USAID's purchases provide the market demand that keeps prices high for all farmers, not just the farmers they directly contract with. What you're seeing with the bankruptcies is that the market isn't going to continue paying current prices for crop yields. But the farmers bought their seed and equipment when the price expectations were higher. And the reduction of USAID from future purchases contributes to lowering price expectations for everyone.
A -- they don't. The US government is invested in sustainable food prices around propping up farmers. Without those government handouts, the cost of groceries to the general population would skyrocket.A- farmers shouldn't base their livelihood on govt handouts.
B- still, none of those farms in the OP are because of USAID cuts, because those would be loans for seed that they are gathering now.