July 26, 2018; New York Magazine
Are farmers generally happy with the promise of $12 billion in federal aid in return for having their trade relationships interrupted? Not at all. Arguing that it is at best a short-term fix with serious long-term consequences, farmers launched into campaign mode yesterday across rural America. One line was repeated over and over: “Trade over aid!”
Eric Levitz in New York Magazine notes that the trade war has already cost US farmers dearly. “The National Farmers Union,” writes Levitz, “estimates that the tariffs foreign countries have placed on American farm products—in retaliation against Trump’s various tariffs—have already cost U.S. agricultural interests $13 billion.”
Farmers speaking out yesterday made any number of points in support of this position while trying not to bash the administration entirely. In essence they boiled down to:
- The money being vastly inadequate even as a short-term plug.
- The interruption of hard won trade relationships would be disruptive and possibly hard to resume in the long term.
- The destabilization of the farms would make them unattractive to lenders upon which they depend.
Bloomberg reports on this last aspect:
Some farmers are going to have some tough conversations with their bankers, said John Heisdorffer, president of the American Soybean Association and himself a grower in Keota, Iowa. While the assistance plan “will help out a little bit,” he said, sour prices will prompt bankers to ask: “Why should I give you money again to operate?”
Farmers for Free Trade, a nonprofit advocacy group backed by the American Farm Bureau Federation and major commodity groups like the National Pork Producers Council, is investing $2.5 million in a four-month ad campaign to show the pain caused by Trump’s new trade policies. Farmers for Free Trade formed last year in response to Trump’s potential withdrawal from NAFTA and other administration trade policies.
One television ad is set to run on Fox News, CNBC, and CNN, as well as in local television and radio markets in Iowa, Pennsylvania and Michigan. The ad responds to White House trade adviser Peter Navarro saying on July 19th that the impact of the tariffs are nothing more than a “rounding error.” The ad sends this rebuke: “America’s farmers and factory workers are not a rounding error.”
Farmers for Free Trade will also deploy digital and print advertising along with town hall events starting during the August congressional recess. Just when Trump “rages against reality” by demanding that his family, let alone his staff, adhere to the rule that Fox is the only source of approved news, the farmers are bringing their inescapable truth directly to the president where he lives.
US farm exports, which enjoyed their third-best year on record in fiscal year 2017 according to US Department of Agriculture Secretary Sonny Purdue, are key to the sector’s profitability. Those profits are now under threat after China imposed tariffs on US soybeans and other farm products in retaliation for US tariffs on Chinese manufacturing goods. Trump’s recent $12 billion emergency relief package for farmers includes direct payments to farmers, purchases of agricultural commodities for food-aid programs, and stepped-up promotion of new export markets. National Review reported that the aid will come from the Commodity Credit Corporation, a depression-era program that can borrow $30 billion from the US Treasury without the approval of Congress. Not known for resisting subsidies, farmers are taking issue with this bailout. Government relief is not nearly enough to fill the gap that this emergency of Trump’s own making is creating.
While some farm groups applauded the handout, many took it as confirmation that the White House has no intention of calling off its trade war anytime soon. After all, if the president were on the brink of a breakthrough with China, he wouldn’t feel compelled to funnel such large subsidies through an obscure New Deal–era program. On Tuesday, the American Soybean Association demanded a “a longer-term strategy to alleviate mounting soybean surpluses and continued low prices, including a plan to remove the harmful tariffs.” That sentiment was echoed by other agricultural lobbies, including the recently formed Farmers for Free Trade—which is preparing a $2.5 million campaign against the president’s tariffs.
This developing story will showcase the consequences of the Trump administration’s trade policies and actions. Farmers for Free Trade intends to make known the real-life costs of farmers, manufacturers, factory workers, and families who are experiencing the loss of jobs, cancelled contracts, and increased prices.—Jim Schaffer