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Photographer: Chip Somodevilla/Getty
Is the relationship between President Donald Trump and farm country starting to go bad?
At first glance, things have never been better. According to recent data, net farm income will hit $103 billion this year, a whopping 23% increase over 2019. The problem is that most of that bounty isn’t due to anything produced down on the farm. Instead, more than one-third of it came from direct federal aid, a 65% boost over last year. Without those funds, farm income would be at its lowest since 2014.
This hasn’t been lost on the president. Late last year, he tweeted: “Our great Farmers will recieve another major round of `cash,’ compliments of China Tariffs, prior to Thanksgiving.” (Spelling and punctuation his.)
But even as some farmers benefit from the president’s largesse, most don’t. And with much of the assistance set to expire, and minimal effort on the part of Trump or Congress to address underlying problems in the farm economy, anxieties are rising across rural America. Barring a big post-pandemic rebound in the price of everything from soybeans to cheese, farmers will be first in line to pay for the Trump administration’s policy mistakes come January.
In 2016, Trump earned his biggest vote margins in the most sparsely populated counties. That was partly because several demographic factors associated with Trump voters are more common in rural America. But economics, too, played a role. Net farm income had declined from a record $124 billion in 2013 to $62 billion four years later, and Trump’s campaign themes resonated with some long-festering rural anxieties. The pay-off came on Election Day, when several farm-heavy swing states, such as Wisconsin, unexpectedly went his way.
The honeymoon, though, was brief. Trump’s decision to initiate a trade war with China not long after taking office led to retaliatory tariffs on American goods, including food. In 2018, U.S. agricultural exports to China declined by 53%, to $9 billion from $19 billion. To make up the difference, and placate a key constituency, the administration arranged for direct offsetting payments to farmers that totaled $14 billion last year.
If the Covid-19 pandemic had never happened, those payments would’ve been more than enough to push total government farm aid to record levels over the past two years. A first round of relief spending then added another $19 billion. Late last week, the administration added another $13 billion. The upshot is that direct government assistance will account for more than 36% of total farm income this year.
As generous as those programs have been, though, they can only paper over the structural problems facing America’s agricultural economy. Cash receipts earned from selling actual goods, such as livestock, are expected to decline to their lowest levels since 2010. Farm debt is slated to hit a record $434 billion this year, and the debt-to-asset ratio may reach 14%, the ninth consecutive annual increase. With cash tight, health-care affordability has become a key concern on farms across the country.
If the Trump administration were serious about assisting farmers, it would offer both a plan to address these long-term problems and some guidance on what farmers can expect when assistance programs expire. Without a commitment to renew those programs, perhaps through additional Covid relief, direct aid will likely fall by half in 2021.
So far, farm country has remained loyal to the president. But there are some recent hints of trouble. The most recent DTN/The Progressive Farmer Agriculture Confidence Index, a three-times-per-year survey, found farmers expressing record-low levels of confidence in August. And while 71% of respondents still expressed support for Trump, that’s a precipitous drop from 89% in April. By Election Day, a further decline could be the difference between winning a swing state and losing it.
Unless Trump can present an economic future to rural America that isn’t dependent on government aid, he’d be wise to prepare for the latter.
To contact the editor responsible for this story:
Timothy Lavin at [email protected]
Published on September 24, 2020, 10:30 AM EDT
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