There were probably many U.S. Department of Agriculture political appointees and career civil service workers on the team that assembled the “trade aid” bail out announced by the White House last week for farmers.
Unfortunately, none of them remembered one of the most famous quotes of President Ronald Reagan, who said, “The most feared eight words in the English language are, ‘I’m from the government and I’m here to help.”
The impact of that came true as soon as the White House announced a $12 billion package targeting farmers who produce soybeans, pork, and other U.S. commodities that now carry heavy tariffs in retaliation for U.S. tariffs on Chinese products. The aid package was designed to give farmers a one-time payment to offset a $2 drop in soybean prices and losses in other commodities that have occurred since the trade war ramped up on Memorial Day.
While farmers are suffering from a more than 50 percent drop in farm income over the past 7 years, most farmers would rather return to the nearly $11 price that November soybean futures were approaching on May 29. That was before they fell to $8.25 and left many farmers looking at an unprofitable year in crop and livestock production.
While a few individual farmers voiced support for the government check, most would rather return to the higher commodity prices resulting from a healthy grain and pork trade with China, according to farm organization members speaking for their members. And many members of Congress, on both sides of the political aisle, voiced the same on behalf of their constituents.
The farm leaders were complimentary to President Trump, all thanking him for acknowledging the fact that commodity prices had plummeted as a result of the trade war. But they also said publicly that their members would prefer to sell their products to China.
President Zippy Duvall of the American Farm Bureau said, “Our emphasis continues to be on trade and restoring markets.” President John Heisdorffer of the American Soybean Association said, “ASA has consistently advised the Administration that the best way to reduce our nation’s trade deficit is by increasing exports. Farmers don’t have time to wait to see how this trade war turns out.”
Many members of Congress were not as complimentary. Sen. Ron Johnson, R-Wis., said, "This is becoming more and more like a Soviet-type of economy here.” Sen. Ben Sasse, R-Neb., said, “This administration’s tariffs and bailouts aren’t going to make America great again; they’re just going to make it 1929 again.” Sen. Joni Ernst, R-Iowa, said, “We need a longer-term strategy to ensure farmers are able to sell their goods around the globe.”
Outside of Congress, some critical reaction came from two respected ag economists who don’t have to stand for re-election, and don’t have any skin in the game. Former USDA chief economist Joe Glauber said, “Writing checks to everybody isn’t the first, best answer.” And highly respected ag economist Bob Thompson said, “The $12 billion aid package will do nothing to rebuild trust and confidence in the U.S. as a reliable ag supplier.”
If the words of President Reagan had been heeded, President Trump may not have said to Kansas Senator Jerry Moran, “I’m surprised. I’ve never heard of anybody who didn’t want a payment from the government.”
Stu Ellis is an observer of the Central Illinois agriculture scene. In addition to his weekly column, you can view his “From The Farm” and “Harvest Heritage” reports on WCIA 3 News.
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