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Why they’re now struggling

The Trump administration’s decision has resulted in the stoppage of critical supplies to 177 countries. But the impact isn't limited to USAID recipients. Local U.S. suppliers of food and other resources have lost a share of their income.

That includes Vance Ehmke and his wife, Louise. Their farm produces grain that gets shipped overseas. And if the program goes away completely, they, and many farmers like them, will be at a loss for income.

"USAID annually buys about $2 billion of surplus and commodities like wheat and grain," Vance told ABC News. "There's a very valuable market that's vanished."

The Ehmkes aren't the only ones losing income in light of the USAID freeze. USAID contractors are said to have reported laying off nearly 13,000 American workers — though the number could be much larger.

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Far-reaching consequences

Cutting off aid to foreign countries could have a massive impact on international relationships. But that aside, it could cause a world of unfavorable consequences domestically.

USAID doesn't just send supplies overseas. It also, as the Ehmkes explain, helps fund a lot of research — research that’s critical to preserving the U.S. food supply.

As Louise explained, farmers need drought-resistant crops. But they can't do that sort of research on their own. In the absence of research, the U.S. food supply could be threatened by extreme weather events, which have increased in frequency in recent years due to climate change.

For example, according to The Associated Press, a University of Illinois Urbana-Champaign lab working to expand soybean usage could shutter in April without funding. And that's just one of many food labs reliant on grant money from USAID for critical research.

Farms may also have to raise prices to compensate for their lost income if they lose out on their USAID contracts. That could drive food prices up across the board.

As it is, in January, food prices were up 1.9% annually, per the Consumer Price Index. Given that 70% of Americans are already struggling to cover the cost of groceries, according to Swiftly, a rise in food prices would only exacerbate the problem.

And even if local farmers raise prices, that may not be enough to compensate for lost USAID contracts. This means that farmers across the country risk struggling financially or, in a more dire scenario, falling into poverty.

More than 80% of companies with USAID contracts are American, according to data company DevelopmentAid. So, this decision has the potential to spur an unemployment crisis.

For Vance Ehmke, the concern is twofold. He's worried about his family's livelihood and the wellbeing of in-need communities overseas.

"We do have a humanitarian and a moral obligation to help, you know, get food to these food-deficient areas," he said.

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Maurie Backman Freelance Writer

Maurie Backman is a freelance contributor to Moneywise, who has more than a decade of experience writing about financial topics, including retirement, investing, Social Security, and real estate.

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