A farmer learns pretty quickly to be a jack-of-all-trades.
Fix a tractor, check. Monitor weather and commodity prices, check. Calculate marginal cost of corn versus soybeans, check. Advance political agenda at federal level.
Well, no one’s perfect.
Producers, and indeed the entire agriculture-dependent economy that includes St. Joseph, are entering a time of great uncertainty about U.S. farm policy. Many entered the year with optimism, believing last year’s trade spat with China was a one-time event, like a hail storm.
Then came the breakdown of trade talks between the United States and China, right in the middle of planting season. Where we go from here is as uncertain as the weather, as indicated in this opaque statement from the U.S. Agriculture Department earlier in the week:
“Farmers should continue to make their planting and production decisions with the current market signals in mind, rather than some expectation of what a farming support program might or might not look like.”
Nothing like throwing caution to the wind.
President Donald Trump tried to bring some clarity later in the week with an announcement of $16 billion in aid to farmers impacted by the trade impasse. This comes on top of a similar program for $12 billion last year.
Last year’s tariff relief, known as the Market Facilitation Program, provided $415 million to 53,000 applicants in Missouri. The largest share went to soybean producers, who lost access to the massive Chinese market.
Farmers said these payments made an impact in Northwest Missouri, and the 2019 program could provide a similar benefit. We’ve talked to some farmers who acknowledge the slide in soybean prices, but many expressed loyalty to the president and his line on trade.
The question many of us should ask, however, is what exactly are we fighting for in this trade war? Is it greater access for U.S. exports, protection for domestic industries, national security or the elimination of China’s theft of U.S. technology and trade secrets? Is the president just bothered by the trade imbalance or using tariff payments as a bargaining chip?
Even with $16 billion in aid, which is nothing to sneeze at, the loss of your largest market is a heavy price to pay. Those in the agriculture industry deserve a better explanation of the endgame here.
In 1980, George H.W. Bush coined the term “voodoo economics” in his criticism of then-candidate Ronald Reagan’s plan to spur economic growth with tax cuts. Reagan, who eventually picked Bush as his vice president, was vindicated when the economy performed as he predicted.
Will things work out as well this time? The use of state resources to prop up victims in a trade war sounds to us like a new kind of voodoo.