Exchange-Tariffs' Impact-Farmers

In this July 6 photo, Larry Enders works on his farm in Bremen, Ind. Enders estimates that he's already lost about $23,000 on the value of last year's harvest since the tariff battle between the United States and several of its trading partners got underway.

President Donald Trump ditched the ubiquitous red ball cap with white lettering Monday for one colored John Deere green and embroidered with big yellow letters exclaiming: "Make Our Farmers Great Again."

Less than 24 hours after the Made In America Showcase at the White House, the Trump administration Tuesday announced a plan to deploy $12 billion in emergency aid to American farmers in the trenches of an escalating series of trade wars.

The Trump administration earlier this year levied $34 billion in tariffs on Chinese imports, citing unfair trade practices and the theft of intellectual property from American companies, which led the Asian country to retaliate with its own tariffs against agricultural goods such as soybeans, corn and pork.

Combined with tariffs levied by other longtime trading partners against the U.S., prices for those commodities have dropped sharply, threatening to do long-term economic damage to those sectors.

Trump has promised to help farmers and ranchers, however, and Tuesday, made good on those promises by announcing the $12 billion in aid, most of which will be made directly available to producers through a "market-facilitation program," payments to offset losses suffered as the result of tariffs on soybeans, corn, wheat, dairy and hogs, the U.S. Department of Agriculture said.

A food purchase and distribution program would buy surplus commodities and provide them to food banks and other nutrition programs run by the USDA, while a third piece to the aid package would promote new export markets for farmers.

All three of the programs would be administered by the USDA and don't need congressional approval, officials said, and could be supplemented by further relief efforts should pressure on agricultural producers not be lifted soon.

"This is a short-term solution that will give President Trump and his administration the time to work on long-term trade deals," Agriculture Secretary Sonny Perdue said in a call with reporters Tuesday afternoon.

Greg Ibach, the undersecretary for marketing and regulatory programs and the former chief of the Nebraska Department of Agriculture, said the USDA began formalizing the emergency aid plans in April at Trump's direction, with the idea farmers could begin signing up for payments near Labor Day, as harvest approaches.

Tuesday's announcement was made "so farmers and ranchers will understand that the USDA, Secretary Perdue and President Trump have made good on their promise not to have farmers and ranchers at the tip of the spear" in the trade war, Ibach said.

Payments to producers would be calculated based upon their lost profit, said Rob Johannson, the USDA's chief economist, although specific details of the plan won't be published for a few weeks.

End to trade disputes sought

Members of Nebraska's congressional delegation said they appreciated the president's support touted by Trump on social media and in a speech to the national VFW meeting in Kansas City, Missouri, on Tuesday, but suggested ending trade disputes would best help the state's farmers and ranchers.

Sen. Deb Fischer, a member of the Senate Agriculture Committee, said she believes the U.S. should work toward "a solution that provides certainty by protecting and expanding market access for our ag producers."

Rep. Adrian Smith, who represents most of Nebraska's rural areas in Congress, said the farmers and ranchers in the 3rd District "tell me repeatedly they prefer competition and open trade over checks from the government."

"Our agricultural producers have proven time and again they can compete with other countries by producing more food, more efficiently, if given the opportunity," Smith said in a statement.

Sen. Ben Sasse, who has been critical of Trump's trade policies, said the trade war cuts the "legs out from underneath farmers," and he slammed the emergency aid plan as spending "$12 billion on gold crutches."

"America's farmers don't want to be paid to lose — they want to win by feeding the world," Sasse said in a statement before alluding to the economic conditions at the onset of the Great Depression. "This administration's tariffs and bailouts aren't going to make America great again, they're just going to make it 1929 again."

The $12 billion aid figure put forward by the Trump administration would offset an estimated $11 billion in economic damage incurred by the retaliatory tariffs against American farmers, USDA officials said. It will be administered using a Depression-era program called the Commodity Credit Corp., which is run by state and county Farm Service Agencies and pays for trade promotion programs, as well as the purchase of surplus foods.

Steve Nelson, president of Nebraska Farm Bureau, said that estimate falls far short of the effects felt by farmers in the Cornhusker state and beyond, however.

American farmers lost out on $400 billion of additional trade opportunities in Asian markets over the next decade when Trump withdrew from the Trans-Pacific Partnership agreement, Nelson said, and they are still waiting for bilateral agreements with those nations to take shape.

"If we could do bilateral trade agreements with those countries, like what the president has talked about, that would be very helpful moving forward," he added. "We're losing trade every day to those countries because we don't have agreements with them in place."

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Sasse said he, too, wants the U.S. to remain in the North American Free Trade Agreement, which is crucial to Nebraska ag producers, while also re-engaging with the TPP.

Nebraska's junior senator, who joined Republican Sens. Rand Paul of Kentucky, Bob Corker of Tennessee and Ron Johnson of Wisconsin in criticizing the president's plan, also said he supports legislation limiting Trump's ability to unilaterally impose tariffs on other countries.

Farmers want to compete

Farmers in Butler County, like Devin Jakub, who plans to one day take over the family farm near Brainard, say they weren't looking for a handout. Rather, they want Nebraska agriculture to compete in the global market.

But despite escalating tensions, Jakub said he and many others still have confidence in Trump's approach to renegotiating trade deals.

Loyalty is important to farmers, he said, so much so they are willing to endure some short-term hardships for better prospects in the long term, both for agriculture and the country.

While the emergency aid package may be viewed as the government bailing out agriculture, and will provide welcome relief to some, Jakub said farmers didn't choose to have taxes slapped on their exports.

"I can definitely see it both ways," he said. "We'd rather see all of our stuff go to market, but a little sacrifice might be worth it in the future."

Near David City, Lukas Fricke, a fifth-generation row crop and hog farmer, said despite feeling the squeeze of the tariffs — roughly 25 to 30 percent of the pork produced in Nebraska is exported to other countries — he and others in the area are hopeful the cyclical nature of the agricultural economy returns to a more profitable time soon.

Meanwhile, Fricke said he won't hold his breath waiting for details from the USDA on how the program will be administered. His neighbors aren't likely to, either.

"I appreciate, and think a lot of other people appreciate the thought and gesture for people out here in the Heartland," Fricke said. "But instead of money, I think a lot of people would like markets."

Reach the writer at 402-473-7120 or cdunker@journalstar.com.

On Twitter @ChrisDunkerLJS.


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