“Farm country is God’s country,” President Donald Trump told members of the American Farm Bureau at their national convention Monday afternoon in Nashville.
We like to think so, but actions speak louder than words. If Mr. Trump truly values the country’s farm belt, he needs to ease off protectionist policies that hamper free trade.
Food and ag exports account for more than $3.5 billion in annual sales for Kansas. These sales, which account for the largest portion of our exports, occur primarily through NAFTA, the North American Free Trade Agreement with Canada and Mexico.
If Mr. Trump deep-sixes NAFTA, which he has threatened to do, our neighbors have promised to look elsewhere for such goods.
This is not idle chatter.
Predicting a shake-up, Mexico is negotiating agreements with Argentina and Chile to purchase corn and is in talks with the European Union to purchase other goods it formerly bought from the United States.
And as we’ve learned from the United States’ withdrawal from the 12-nation Trans-Pacific Partnership this summer, other countries are quick to fill our absence. Without the protections of the TPP, Japan has imposed 50 percent “safeguard” tariffs on U.S. exports, cutting our sales there by 25 percent.
Meanwhile, Australia’s sales of beef to Japan are up by 30 percent, Canada’s sales to Japan are now virtually duty-free, and the European Union has arranged a free-trade deal with Japan dubbed “cars-for-cheese.”
As for NAFTA, Ted Mc-Kinney, an undersecretary for the U.S. Department of Agriculture, in December advised the country’s farmers to devise a “backup plan,” if the negotiations fall through.
Sorry, sir. But most farmers these days do not have the luxury of a contingency plan. It’s not as if they can deal individually with Justin Trudeau, Canada’s PM, after all.
With prices so depressed, farmers need these government trade deals more than ever.
Today’s farmers are earning about one-half from just a few years ago. Corn is fetching about $3.50 a bushel compared to $8.12 in July 2012; soybeans are hovering above $9, down from almost $17 in 2012, today’s wheat is $4.30 a bushel compared to $9.60 in 2008.
Since 2012 prices for most crops have been on a downward slope. For the large part, world production has caught up with and surpassed demand. A strong U.S. dollar, which makes American goods more expensive abroad, has also worked to depress foreign demand for U.S. goods.
Large harvests, cooling demand and export challenges have worked to conspire a perfect storm for farmers, and, likewise, farm implement dealers and manufacturers and fertilizer and feed suppliers.
U.S. FARMERS were there for Mr. Trump at election time. The test will be whether he is inclined to return the favor.
— Susan Lynn
