U.S. announces measures to soothe drought pain

Aug 13, 2012, 12:54 PM EDT

* US to buy $170 mln in meat to offset drought impact

* Republican VP candidate blocking disaster aid - Obama

* Iowa seen as key swing state in 2012 election

By Jeff Mason

CHICAGO, Aug 13 (Reuters) - President Barack Obama announcedan emergency purchase of up to $170 million of meat and fish onMonday on a campaign trip to drought-hit Iowa, and accusedRepublican vice presidential candidate Paul Ryan of blockingdisaster aid to farmers.

Obama named the Wisconsin congressman, the presumptiveRepublican nominee for vice president, as "one of those leadersof Congress standing in the way of the Farm Bill." The 2012bill, which includes disaster aid programs, is stalled in theRepublican-controlled House of Representatives.

"So if you happen to see congressman Ryan, tell him howimportant this farm bill is to Iowa and our rural communities,"Obama said in remarks to be delivered in Council Bluffs, on theMissouri River on the western edge of Iowa.

"It's time to put politics aside and pass it right away."

As the House Budget Committee chairman, Ryan has demandedlarge cuts in Farm Bill spending, including food stamps for thepoor. He was also campaigning in Iowa on Monday, two days afterbeing chosen to be Republican presidential candidate MittRomney's running mate for the Nov. 6 election.

Ryan voted for a $383 million livestock disaster aid billthat the House passed on Aug. 2 before a five-week recess. ARomney campaign spokesman said "no one will work harder todefend farmers and ranchers than the Romney-Ryan ticket."

U.S. farmers are suffering through their worst drought in ahalf a century as concern mounts that livestock producers can'tafford the soaring cost of corn, a staple for feed.

Under the plan announced by Obama, the AgricultureDepartment will buy pork, lamb, chicken and catfish with moneyfrom an emergency fund for responses to natural disasters. Thefood will be sent to assistance programs, such as food banks.

Obama planned a three-day swing through Iowa, a battlegroundstate the Democrat hopes to win in November. He planned to visita farm in the No. 1 corn-producing state to witness the impactof the drought. The Iowa corn crop is forecast 25 percentsmaller than 2011 due to the worst drought in half a century.

Swing states, including Iowa, Ohio, Florida, and Colorado, could hold the key to Obama's White House re-election bid.

The White House also is directing the Department of Defenseto "encourage" its vendors to speed up purchases of lamb, porkand beef and freeze the food for later use.

"This is a win-win. Farmers and ranchers will have anopportunity to sell more of their products at this critical timeand taxpayers will get a better price on food that would havebeen purchased later," a White House official said.

"The president has directed his administration to continueexploring every possible avenue to provide relief to communitiesstruggling with this historic natural disaster."



Analyst Mark McMinimy of Guggenheim Partners noted the"incredibly fortuitous timing" of the announcement, which hesaid demonstrated the advantages that Obama has as an incumbentrunning for re-election. The money for the purchases will comefrom a fund reserved for helping farmers and ranchers hit bynatural disaster.

Last week the governors of two poultry-growing states,Maryland and Delaware, asked the Obama administration for relieffrom the requirement to use corn ethanol in gasoline, saying thecrop was needed to feed livestock.

The announcement of the purchases, a small amount comparedto annual U.S. meat production, had little immediate impact onlivestock prices in Chicago markets.

Livestock prices are expected to weaken as the higher costof corn, soybeans and hay forces farmers and ranchers to sendanimals to slaughter sooner. On Friday, the government said highfeed prices were expected to squeeze returns to producers.

So far this fiscal year, the Agriculture Department hasspent $941 million to buy more than 1 billion lbs (453.6 millionkg) of food, from apricots and beans to potatoes and walnutsalong with meat, eggs and fish, for the school lunch and fooddonation programs.