US drought: Obama calls for new farm bill

2012-08-12 16:09

Washington - US President Barack Obama urged members of Congress on Saturday to pass a farm bill that would help the agricultural sector cope with the most severe drought that has struck the United States in half a century.

"They need to pass a farm bill that not only helps farmers and ranchers respond to these kinds of disasters, but also makes necessary reforms and gives them some certainty year-round," Obama said in his weekly radio and internet address.

"That's the single best way we can help rural communities right now, and also in the long-term," he added.

The appeal came one day after the Department of Agriculture slashed production estimates for its globally crucial corn and soybean crops, saying the record heat across the farm belt had cut expected output to the lowest level in six years.

The department predicted corn prices would soar as high as $8.90 a bushel, compared to its July projection of $6.40. Soybean prices were expected to hit $15-17 a bushel, $2.00 higher than the USDA forecast last month.

It said the record temperatures across the country in July left much of both crops damaged, sending yields per acre on corn to the lowest level since 1995 and, for soybeans, the lowest since 2003.

The US farm belt has been ravaged by the most stifling drought since the 1950s, which intensified when the country's contiguous 48 states endured the hottest July on record last month.

In some rural areas, municipal water suppliers are talking about mandatory restrictions because they have seen such a dramatic drop in the water table that they fear being unable to fulfill deliveries to customers.

While weather forecasters are predicting a cooling of temperatures across the Midwest in the next week, it is unlikely to reverse those numbers as most of the crops are already maturing.

Obama said that half of the corn crop in the United States was in poor or very poor condition while cattle farmers were struggling to feed their animals.

"And if we don't get relief soon," he warned, "Americans everywhere will start feeling the pinch, with higher prices on grocery store shelves all across the country."

Analysts point out that this price hike - coupled with rising gasoline prices - could come right before the November 6 presidential and congressional elections, affecting their outcome.

The president said the White House had been working with the Department of Agriculture and other agencies to make sure the government was doing everything it could to help farmers and ranchers fight back and recover from this disaster.

"Already, we've given farmers across 32 states access to low-interest emergency loans," he pointed out. "We've opened up more federal land for grazing. And we're working with crop insurance companies to give farmers a short grace period on their premiums, since some families will be struggling to make ends meet at the end of the year."

Obama also noted that this past week, his administration had announced an additional $30m to help get more water to livestock and restore land affected by the drought.

He said the administration was making it easier for farmers, ranchers and businesses to get emergency loans, and the Department of Transportation was helping truck drivers deliver supplies to states that needed them the most.

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