America’s agricultural industry is built on risk, and most of that risk is borne by farmers and ranchers.
They leverage their assets, sometimes land that has been in their family for generations, to borrow money to pay for the chance to put seed in the ground and hope it makes a crop or feed calves and hope they grow fast enough to be sold for a profit.
Paying back that loan requires that many variables align. The weather must cooperate. Commodity prices must be stable. The equipment must function accordingly. The neighbor’s herbicides must not drift onto the farmer’s fields. The rancher’s livestock must successfully fend off diseases and pests. Fires and floods must be avoided. Farm labor must show up for work.
Certainly there are government programs to help farmers shoulder all that risk so long as they remain in compliance with government-mandated conservation programs. However, the risk is still there, and ag producers stand to lose everything if they experience several consecutive years in which the variables don’t line up.
And that’s the situation in which the ag community finds itself. We’re going on five years of unfavorable commodity prices. Thanks to the awesome productivity of modern farms, agricultural supply has been outstripping demand.
So when the president sends farmers to the front lines in a trade war, that’s asking a lot. Yet, that’s what happened last summer. With tit-for-tat tariffs between the U.S. and China as we try to arrive at a fair trade deal, the U.S. has lost its biggest foreign market for soybeans. The price for soybeans plummeted.
The U.S. Department of Agriculture acknowledged that imposition on farmers last year and implemented the Market Facilitation Program, which made direct payments to American farmers based on their production levels. However, the trade war is ongoing, and farmers don’t know the details of a similar program for 2019 crops.
As recently as April 30, U.S. Secretary of Agriculture Sonny Perdue said that farmers should not anticipate a market facilitation program for 2019.
Then on May 5, President Donald Trump tweeted threats of new tariffs on Chinese products, and the markets fell. On May 10, those tariffs became a reality, and even more tariffs are waiting in the wings if he doesn’t get the deal he wants from China.
Seemingly in response to public outcry, Trump tweeted that the government would buy U.S. farm products and ship them to “starving countries.”
How many starving people are we going to feed with unprocessed soybeans?
The USDA has not, as of this writing, been forthcoming with details of this 2019 “trade aid” program. It doesn’t seem as if Perdue knew the program would exist until shortly before the president announced it.
Now, farmers are facing the final decisions of what to plant, and they still don’t know what government help will be available for individual commodities. How can they make the best decisions of what to plant to best mitigate the risks they have taken?
Was a failure in the trade talks such an impossibility that no one at USDA could have drafted a 2019 trade aid program just in case?
This year’s program should have already been ready to go should talks between China and the U.S. fail. Instead, USDA is playing catch up. Meanwhile, our farmers are missing vital information as they face the most important decisions of the year.
The growing season doesn’t wait around for politicians in Washington to make up their minds.
We expect better performance from our public servants, and, frankly, our nation’s vulnerable food producers deserve better.