Title : AMERICA'S FAMILY FARMS IN THE TARIFF CROSSHAIRS
link : AMERICA'S FAMILY FARMS IN THE TARIFF CROSSHAIRS
AMERICA'S FAMILY FARMS IN THE TARIFF CROSSHAIRS
Trump Has No Idea What
His Tariffs Have Unleashed
for Farmers
By: Robert Leonard
The New York Times
27 July 2018
His trade war will hurt business at a time when the rural population is aging, and it will probably hollow out farm communities.
KNOXVILLE, Iowa — Today President Trump is visiting Dubuque, Iowa, where every year at harvest time, millions of tons of grain come via rail and truck to be loaded onto barges on the Mississippi River and shipped to Mexico, China and much of the rest of the world. Harvest puts coin into the hands of farmers, and they and their communities — indeed all of America — profit. Not this year.
The president is here to trumpet a $12 billion plan to aid American farmers. Why do they need aid? For Iowans, it’s because 33 percent of our economy is tied, directly or indirectly, to agriculture, and Mr. Trump recklessly opened trade wars that will hit “Trump country” — rural America — hardest and that have already brought an avalanche of losses. Indeed, the impact of his tariffs will probably be felt by family farms and the area for generations.
So perhaps visiting Dubuque is the least he could do.
The cost of being shut out of overseas markets for soybeans, beef, pork, chicken and more will be in the billions. Once those markets are gone, they will be difficult to recover. Commodity prices continue to drop, and good weather suggests an excellent crop is in the making, which will drive prices further down.
Brazil is ready to step in with increased soybean production, and China has already shifted its purchasing power there.
But the fallout will not just be tallied in statistics. In farm country, U.S.A., the Trump tariffs have poured gas on what has been a slow-burning conflagration.
Rural America is about to undergo a major demographic shift. President Trump didn’t start it, but he has accelerated a crisis that might have taken a generation or two to play out. Now it might take only a few years.
Rural America is going to be hollowed out very quickly. Farms will become consolidated, and towns that are already in trouble will certainly die.
Iowa’s farmers are aging, and younger farmers aren’t replacing them proportionately. Sixty percent of Iowa farmland is owned by people 65 years or older, and 35 percent of farmland is owned by people 75 or older.
The Department of Agriculture conducts a Census of Agriculture every five years. The 2017 census isn’t available yet, but the 2012 census showsthe average age of the American farmer was 58.3 years. This isn’t because young people in rural America don’t want to farm; it’s because, if it isn’t already the family business, the costs are much too high to allow many of them to get into it.
A friend, a small-town Iowa banker who specializes in working with farmers, offered a local example. It’s time for Mom and Dad to retire, get off the farm and move to town. Much of the time, if no heir is interested in continuing the operation, the farm is auctioned to the highest bidder.
This time, one son wanted to take over the farm. But there were other children entitled to their share, so the farm went up for auction.
But now they had to compete with larger farm operations. The son “did the best he could,” said my friend, but a big operation “bid it up more than it was worth, some guy from out of town no one knew — probably from one of the big operations up north. The kid didn’t have a chance. It was heartbreaking.”
I use Iowa in my examples, but much of rural America will be affected in a similar way. In the worst possible outcome of this scenario, losses and farm consolidation accelerated by Mr. Trump’s tariffs will make the devastating 1980s farm crisis look like a bump in the road as it drives a significant rural-to-city migration.
Smaller operations don’t have the capital to weather a trade war and will be forced to sell, most likely to larger operations.
In my community, I learned this week that a hog operation I drive by every day is folding. The confinements are being dismantled, and anything portable can be found on Craigslist. A friend close to the family told me pork prices have been down for years, and with the tariffs it’s just not worth it anymore.
Another casualty: our community banks. As farms get larger, farm loans are less likely to be local. A big operation with farms in dozens of counties that maybe even cross state lines probably won’t use local banks for credit.
When our community banks are gone, one of the major economic engines of our small towns will be gone.
At a certain point, populations won’t be enough to support rural hospitals and clinics, and they, too, will be gone. Rural hospitals are one of the major employers in the community. Even if you have a good manufacturing company in town, if you lose the hospital, they won’t be able to attract the employees they need.
Those plants may be forced to leave as well — especially since the tariffs have hit them hard also. One friend who has a small manufacturing business says his costs have doubled since Mr. Trump announced tariffs on aluminum and steel, and that his business is down 40 percent.
Some of the farmers I speak with are unwavering in support of the president; they’d vote Republican even if Mr. Trump personally slapped the heck out of the preacher at the church potluck. But others are starting to recognize how the economic impact of the tariffs is hitting them personally. Iowa’s congressional delegation, all Republican with the exception of Democrat Dave Loebsack in Iowa’s Second Congressional District, have warned the administration. So has Iowa’s Republican governor, Kim Reynolds.
This is why, earlier this summer, Vice President Mike Pence came to the Midwest for a reassuring visit and why Sonny Perdue, Mr. Trump’s secretary of agriculture, offered his $12 billion band-aid of a handout Tuesday.
And it’s why President Trump is here now, crowing of those billions. What farmers really want are the markets restored.
Farmers take out lines of credit in the spring — usually due the following Jan. 1 — to pay for seed and other input costs, and then pay the loans back after harvest. Like any other loan, there are consequences to not paying, including losing the farm. Farmers are going to know before the midterm elections if they are going to be able to pay back loans.
The larger farm operations and the larger agribusinesses will be hovering, looking for any weakness, and ready to purchase smaller farms. And rest assured, when the Trump payments are made to farmers, the larger operations will be the ones that gobble them up.
Mr. Perdue, and likely President Trump, know the $12 billion won’t make a difference, even in the short term. Farmers and others in the industry know the offer is meaningless. But most rural Republicans aren’t farmers, and many are Fox News devotees. So when they turn on Tucker Carlson or Sean Hannity, the hosts will likely extol the “virtues” of Mr. Trump’s farm policies and tariffs rather than the reality of their failures.
The most poignant evidence of the depopulation of rural Iowa over the last three-quarters of a century is the lily. Drive any highway or rock road in the state about this time of year and you will see that about every half-mile, the ditches are full of beautiful orange lilies.
Behind the lilies are hundred-acre fields of corn or beans, and if you park your car and wander the field behind the lilies, you will invariably find nails, broken crockery and remnants of life where a farmhouse once stood. The lilies are all that’s left of the dreams of the optimistic family that planted the lilies and made a farm and a life on the land generations ago, only to see it lost.
The destruction of a way of life cuts as deep now as it did back then, especially when it comes from this president. The only thing he knows about food is that it always comes served to him on a silver, or maybe gold, platter.
HAVE A GREAT DAY!
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