No matter where Nebraskans looked, the last two weeks have illustrated the struggles faced by the state’s largest industry, agriculture.
A combination of factors – low commodity prices, bad trade policy, property taxes, etc. – has created this imperfect storm battering rural Nebraska. But this confluence of reports highlights the absolute importance of crafting legislation both at the state and federal levels that ensures a vibrant agriculture industry, which will, in turn, benefit the entire state.
Two numbers provide critical perspective for the significance of farmers and ranchers to all Nebraskans. One in every four jobs in Nebraska is related to agriculture, according to the state Department of Agriculture, and 91 percent of the state’s land area is used for farming and ranching.
Let those sink in for a moment. Now, consider why these recent reports trouble us:
* For the fourth consecutive month, the Nebraska Economic Forecasting Advisory Board dropped its revenue projections for 2019-21 fiscal years – this time, by about $110 million. Rural members expressed concern about what one called a “continued ripple effect” of free-falling farm income, which has been more than halved since 2013, affecting other industries.
* Meanwhile, farm loans nationwide are at their highest levels since the Great Recession. The Farm Service Agency reports that 19.4 percent – nearly one in five – direct farm loans were delinquent in January, compared to 16.5 percent a year prior. Nebraska also ranked second in farm-related bankruptcies in 2018. Though the number pales compared to the 1980s farm crisis, it’s tripled in a year.
* In a far-reaching survey, economists from the Federal Reserve Bank, Princeton University and Columbia University reported that tariffs championed by President Donald Trump cost the U.S. economy billions. Agricultural exports, Nebraska’s strength, have suffered as “retaliations disproportionately targeted agricultural sectors, and in part because U.S. tariffs raised the costs of inputs.”
Now, not all the news on this front is bad news. Several property tax reform proposals remain alive in the Nebraska Legislature, and optimism in U.S.-China trade talks has delayed the implementation of additional Chinese tariffs that would further hurt the state’s ag industry.
While that progress is welcome, it’s small in comparison to the problems suffered most acutely by the state’s farmers and ranchers. But, if these trends continue to worsen, other Nebraskans will increasingly feel the pinch, too.
Added heartburn in agriculture will manifest itself in our state budget, likely creating shortfalls moving forward. No Nebraskan, even in growing urban areas, will be spared from this impact on taxes, funding and services.
As such, it’s in all of our best interest to fight for property tax reform and reduced barriers to trade – changes that would help agriculture industry that powers our state.