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Obama announces help for farmers

August 14, 2012

President Barack Obama announced plans to stem the impact of the worst drought in 50 years as he began a three-day trip to the Midwest state of Iowa.

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On a presidential campaign trip to the drought-hit state of Iowa, U.S. President Barack Obama announced an emergency purchase of up to $170 million (137 million euros) of meat and fish to help farmers. The aim is to hold up prices against rising feed costs.

"Right now folks here in Iowa and across the heartland are suffering from one of the worst droughts in 50 years," Obama said on Monday. "Farmers and ranchers depend on a good crop season to pay the bills and put a roof over their heads, and I know that things are tough right now."

The US Department of Agriculture (USDA) will buy pork, lamb, chicken and catfish, and the food will be sent to assistance programs, such as food banks.

"The purchases will help mitigate further downward prices, stabilize market conditions and provide high quality, nutritious food to recipients of USDA nutrition programs," Agriculture Secretary Tom Vilsack said in a statement.

Federal law allows the USDA to buy meat and poultry products to help farmers and ranchers affected by natural disasters.

It is the latest in a series of drought-relief steps which also include low-interest loans.

Americans will face higher food prices at the supermarket next year because of the drought. Corn and soy bean yields have been cut and their prices on the futures market have soared.

The USDA said on Friday this year's corn crop would fall below 11 billion bushels for the first time in six years. Soybean production was forecast at a five year low.

Some light rain fell at the weekend across the Midwest and more is expected later this week. Temperatures have fallen slightly, down to 27-32 degrees Celsius in the north.

Wine producers in the Midwest could see output cut by as much as a half because of the drought. However, the quality could be improved because of the heat and lack of rain.

"Everybody is looking for a really great harvest (for quality) ... but a smaller harvest," said Cary Greene, spokesman for WineAmerica, an industry group in Washington.

jm/crh (Reuters, AP)