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Farmers Need Long Term Solutions, Not Free Handouts

July 27, 2018

President Trump is sending relief to farm country for the negative effects brought on by his trade war with China. USDA Secretary Sonny Perdue announced that the administration would spend $12 billion on farm programs, which he believes will help offset the $11 billion impact of retaliatory tariffs. USDA will divide the money between The Market Facilitation Program, a newly created Food Purchase and Distribution Program, and a Trade Promotion Program.

It’s an understatement to say that farm country is struggling right now, even before Trump announced new tariffs against some of our largest trading partners. Net farm income has declined roughly 50% since 2013. Commodity prices are barely at production costs. Family farms are going under across the country. The contribution of agriculture to the economy is at an all time low.

Some have compared the current farm economy to the farm crisis of the 1980’s, when bankruptcies became the norm.

So the acknowledgment by the Trump administration that we’re withering out here in rural America is great. But it was Trump’s tariffs and moves to reopen beneficial trade deals that exacerbated the problems we’re already experiencing.

Take soybeans. China purchases about 60 percent of U.S. soybean exports. China responded to Trump’s tariffs by threatening their own tariffs on soybeans, causing the price per bushel to go into a freefall. In May, the price was about $10.50 per bushel. Today the price is about $8.50 per bushel. To put that in perspective, “for every $1 lower in average price per bushel, U.S. soybean farmers will see their revenue decrease by over $4 billion, or about 10% of total revenue.”

Don’t get me wrong: China definitely plays dirty when it comes to trade. Agriculture is impacted by this as much as any other industry.  In the past five years alone, delays in Chinese approvals of new genetically modified crops have cut U.S. gross domestic product by roughly $7 billion.

So farmers appreciate that we want trade deals that are fair, beneficial to the U.S., and stop the shenanigans by the Chinese. But starting a trade war, especially one that puts us in the middle, wasn’t the best way to fix the problem. Nor does throwing a bunch of money at farmers now make up for the problems that have been created. Farmers learn from an early age that the only way to make a living is through an honest day of hard work growing crops and selling them at a profit. Farmers do not want handouts and they do not want U.S. taxpayers to foot the bill just to keep us afloat.

Instead, we want a president to focus on opening up new markets, finding new customers, and giving us more opportunities. We want long term solutions, not a temporary fix. We need to hold countries like China accountable for playing games, but we need to be smart about it.

But if the Trump administration persists in engaging in a multi-front trade war, U.S. farmers need more consumption here at home. The easiest way to ease some of the pain is to develop new uses for the crops we’re already producing. The U.S. is currently sitting on years of record breaking corn surpluses. With the right incentives and support, that corn crop could be turned into biodegradable plastics that would not only benefit farmers, but also the environment. Imagine if we were able to reduce our consumption of oil-based plastics to something more sustainable.

China is an important trade partner for United States’ agriculture interests, whether they’re always fair about it or not. President Trump’s bailout for farmers is a nice gesture, but not the solution we need.

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Hi, I'm Amanda. My family farms corn and soybeans in Southwest Michigan. I'm an attorney and I'm passionate about agriculture!

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