Many farmers “are struggling to stay afloat” because of the trade war and persistently low commodity prices, said the National Farmers Union board on Tuesday, calling on Congress and the White House to strengthen the federal safety net. Separately, the president of the American Farm Bureau Federation said another multibillion-dollar round of Trump tariff payments may be needed.
The farm leaders spoke as the USDA enters the early stages of implementing the 2018 farm bill, which modestly boosts crop and dairy supports. The law boosts rates for so-called marketing loans for grains and soybeans by 13-24 percent and lowers premiums for the insurance-like dairy subsidy program while offering better coverage.
“In neither case do the changes reflect the severity of existing market challenges and the immediacy of the financial crisis facing farm farmers and ranchers,” said the NFU board in a resolution. “Despite their best efforts, many farmers are struggling to stay afloat.” Farm income has slumped since 2013. Lenders are charging higher interest rates and demanding more collateral.
In advocating “significant, long-term solutions (that) strengthen the safety net,” the NFU resolution said that among the options worthy of congressional consideration was diversion of cropland into conservation usage. The 2018 farm law will gradually expand the Conservation Reserve, which pays landowners to idle fragile cropland, to 27 million acres from the current limit of 24 million acres. The NFU is the second-largest U.S. farm group and the AFBF is the largest.
Iowa Sen. Chuck Grassley told reporters that farmers are not looking for a new round of the Trump tariff payments, officially called Market Facilitation Program payments. “They’re looking for an agreement” to restore overseas markets, he said. The USDA says up to $9.6 billion in cash will be paid to farmers to offset the impact of unfair tariffs on U.S. agriculture.
AFBF president Zippy Duvall echoed Grassley in saying, “We want trade, not aid” on the Adams on Agriculture program.
“I think if we continue on this difficult road with trade, we’ll have to take a second look, another look, at whether there is another round of mitigation payments,” said Duvall. The AFBF, the largest U.S. farm group, supports Trump’s use of tariffs as a tool to force China to amend unfair trade practices but farmers also want the administration to follow through on pledges to write new trade agreements. If there is no progress, said Duvall, “they’re going to have to consider having another payment.”
Agriculture Secretary Sonny Perdue said last fall there would be no payments in 2019 because farmers would adapt to the changing market situation. On Tuesday, the CBO said corn and soybean prices are unlikely to improve in the near to mid term. The USDA is scheduled to make its first estimate of 2019 net farm income in early February.