As a developing trade war creates difficulty shipping U.S. commodities overseas, farmers and ranchers eagerly anticipated details of a federal aid package of as much as $12 billion. There was talk of payments of $1.65 per bushel for struggling soybean farmers.
When the U.S. Department of Agriculture’s plan was finally fleshed out Monday, that soybean nugget was included. But there were considerable caveats.
One is that a farmer’s average adjusted gross yearly income for tax years 2014, 2015 and 2016 be less than $900,000.
Another is that the payment is capped at $125,000 per farmer, though there is the possibility of more in the future.
Those two stipulations mean the program offers more of a helping hand than a full-on bailout.
Whether you think that’s a good idea likely depends on which side of the political spectrum you prefer.
To us, the plan is a good first step. It’s clearly geared toward smaller farms because the $900,000 threshold is not hard to eclipse. And for big operations that manage to qualify, the $125,000, while welcome, isn’t going to be a savior.
American farmers and ranchers are in a tough spot. Historically, it seems, the ag markets have often offset themselves. Crop prices would be low, but cattle prices high. Or the market for crops was strong, while livestock producers took less. Somehow, though, it all seemed to work out.
The way things stand now, that might not be the case for our neighbors who work the fields and feedlots, the crops and the cattle.
The problem is real.
For the past few years, the returns producers have gotten for all of their commodities have been low. Meanwhile, input costs — seed, food, fertilizer — have, at best, leveled off. And land prices, at least locally, have mostly continued to climb.
You don’t need to be a mathematician, scientist, economist or banker to see the danger.
And the trade tariffs imposed earlier this year by the U.S. and then other countries, particularly China, only amplified the problems.
They are also the reason the Trump administration has proposed some help, while taking flack for doing so.
It’s nice that $3.6 billion of the $4.7 billion in payments announced so far is for soybean farmers. And it’s nice that the plan includes some other features:
- As much as $1.2 billion to buy commodities “unfairly targeted” by foreign tariffs and distribute that food through nutrition assistance programs.
- Another $200 million to “develop foreign markets for U.S. agricultural products.”
While worthy efforts, they aren’t likely to solve the mounting problems faced by farmers and ranchers.
Maybe that’s fine. Certainly ag producers are accustomed to hard work, fending for themselves and overcoming obstacles. But to be dismissive of the severe struggles of the industry is foolish. It’s the prime driver of northeastern South Dakota’s economy and we’ve been struggling in recent years.
It’s always tough to find the right amount of government support for struggling private businesses. And that’s especially true when talking about the producers of so much of the world’s food. Complicating that is that part of the financial woes are of our own doing. We imposed tariffs on other nations, and they retaliated, further hurting an already rough ag economy.
Candidate Trump was supported in 2016 by rural Americans, those same Americans who now are hurting. It’s time for his administration to return that favor to rural America.
That means working to find more ways to help farmers and ranchers who don’t see hope in the way of higher commodity prices in the next few years.
And it might mean more payments.