With a trade war looming, commodity prices swooning, and the dairy industry in full-blown crisis, a growing number of American farmers are embracing a controversial set of farm policies that would manage the country’s commodity production and stabilize crop prices. No paywall
USDA announced Friday that it will likely establish a Federal Milk Marketing Order for the state of California. The agency will have a referendum for California dairy producers from April 2 to May 5, during which two-thirds of producers have to vote in favor of the FMMO for it to become official.
Agriculture Secretary Sonny Perdue drew a familiar picture of a fragile farm economy recently for lawmakers pondering the 2018 farm bill: income at half its 2013 level, high production costs, debt on the rise, and low commodity prices in the year ahead.
A growing number of farmers and rural advocates say President Trump's trade and rural infrastructure proposals would further damage the struggling farm economy, despite his vow to boost rural America through renewed investment.
U.S. farm numbers continue to drift lower, dropping to 2.048 million according to a USDA survey conducted last June, only a shadow of their peak during the Depression. At the same time that the total falls, the portion of land operated by the biggest farms, the powerhouses with more than $1 million a year in sales, continues to grow, now covering a quarter of all farmland.
Five weeks after he told the largest U.S. farm group that he supports "a [farm] bill that includes crop insurance," President Trump asked Congress to slash the taxpayer-subsidized program by a third. The $26-billion cut over a decade was part of a fiscal 2019 budget package that called for the eradication of USDA's first green-payment program and for denial of crop subsidies and land stewardship payments to people with more than $500,000 in adjusted gross income.
Farm income is stagnant at the same time that farmers and ranchers across the country are borrowing larger amounts of money and paying sharply higher interest rates on the loans, said the Kansas City Federal Reserve Bank. "Large loans drove the increase in farm lending, which may heighten concerns about cash flow in 2018."
Farmers are among President Trump's staunchest supporters, and they have a response to his threats to scrap NAFTA and rewrite other trade agreements: "Without those global markets, our already-depressed farm economy would go down even more," said Zippy Duvall, leader of the largest U.S. farm group. "Trade should not be a dirty word," Duvall told the estimated 7,000 attendees at American Farm Bureau Federation convention, where Trump is scheduled to speak this afternoon.
As Congress expanded the role of crop insurance over the past couple of decades, the cost of the federally subsidized program tripled, to $9 billion annually over the past five years. The Congressional Budget Office says that if lawmakers are worried about costs, they could alter the program to cut outlays by 25 percent or more, with the likely consequence of reducing participation in the largest program in the farm safety net.