In light of US Department of Agriculture aid package, farm groups want trade, not aid
WASHINGTON D.C. - As the U.S. Department of Agriculture (USDA) takes action to assist farmers in response to tariff retaliation, state legislators and farm groups reacted, thankful for the aid for farmers, but are insistent that administration find long-term solutions for trade issues.
On July 24, the USDA announced it will authorize up to $12 billion in programs, which is in line with the estimated $11 billion impact of the unjustified retaliatory tariffs on U.S. agricultural goods. These programs will assist agricultural producers to meet the costs of disrupted markets, but is only a bandaid in the ongoing trade war.
American Farm Bureau Federation (AFBF) President Zippy Duvall said the aid "will provide a welcome measure of temporary relief to our farmers and ranchers who are experiencing the financial effects of the trade war."
“We are grateful for the administration’s recognition that farmers and ranchers needed positive news now and this will buy us some time. This announcement is substantial, but we cannot overstate the dire consequences that farmers and ranchers are facing in relation to lost export markets," Duvall said. "Our emphasis continues to be on trade and restoring markets, and we will continue to push for a swift and sure end to the trade war and the tariffs impacting American agriculture.”
Jim Holte, Wisconsin Farm Bureau Federation (WFBF) president called the package of assistance "temporary relief."
"While it’s appreciated that the administration is showing support for farmers who have been financially struggling, they would benefit long-term from trade negotiations being ironed out," said Holte. "Farmers want trade, not aid, and Wisconsin Farm Bureau hopes to see progress on trade agreements soon.”
FarmFirst Dairy Cooperative is pleased that their repeated concerns have not fallen on deaf ears.
"In a letter sent to Secretary Perdue on July 13, FarmFirst Dairy Cooperative and other Midwest Dairy Coalition members requested that the USDA utilize its authority to provide assistance to dairy farmers," Jeff Lyon, general manager of FarmFirst Dairy Cooperative said. "FarmFirst has stressed the importance for immediate attention to be taken regarding the economic conditions dairy farmers are facing in order to keep their operations running.
Lyon added, "Exports of dairy products and ingredients have greatly benefited farmers over the past several years and is becoming a more significant part of the price they receive for their milk. They must not bear the brunt of this trade war taking place."
FarmFirst Dairy Cooperative will continue to advocate for meaningful trade negotiations that preserve the market access dairy has long enjoyed and , more importantly, will seek to suspend the retaliatory tariffs with major country exporters and restore the flow of dairy products between these trading partners.
The National Farmers Union (NFU) supports Trump's efforts to improve fair trade relationships, but "has grown weary of the administration’s go-it-alone, bull-in-a-china-shop approach," NFU President Roger Johnson pointed out.
“President Trump’s escalating trade war with China and much of the rest of the world requires that we go to significant lengths to protect the men and women who grow our food, fuel and fiber," said Johnson. "Their livelihoods are on the line with every tweet, threat or tariff action that comes from the White House. Market prices for farm products are plunging from already very low levels, and it’s been estimated that farmers lost more than $13 billion last month alone due to trade disruptions.
While the move provides stopgap assistance, it is a "a short-term fix to a long-term problem."
"The administration must develop a support mechanism that will mitigate the significant damage that is being inflicted upon our most vital international markets for years to come," Johnson added. "They should do this by working with Congress to ensure farm bill programs provide enough assistance to farmers when markets collapse.”
The National Corn Growers Association (NCGA) and Wisconsin Corn Growers Association (WCGA) appreciate the support, but it can't fully compensate producers for losses.
“What producers really need are prices that reflect a fair market value – especially in a time where tariffs and trade uncertainty are so prevalent,” says Doug Rebout, Wisconsin Growers Association President. “The proposal is a temporary fix but we need a long-term solution. While aid helps producers in the short-term, once we lose export markets it is very difficult, if not impossible, to get them back.”
North Dakota farmer Kevin Skunes, NCGA president, said the group looks forward to working with the USDA on the details and implementation of this plan.
“NCGA’s grower members are confronting their fifth consecutive year of declining farm incomes while facing high levels of uncertainty due to ongoing trade disputes and disruptions in the ethanol markets. Corn farmers prefer to rely on markets, not an aid package, for their livelihoods," said Skunes. “NCGA will continue to advocate for Administrative actions including: rescinding the section 232 and 301 tariffs; securing NAFTA’s future; entering new trade agreements; allowing for year-round sales of higher ethanol blends such as E15; and implementing the Renewable Fuel Standard as intended. We believe these additional actions, which would come with no cost, would result in stronger market demand for farmers.”
Americans for Farmers & Families
Casey Guernsey, a former Missouri state legislator and spokesman for Americans for Farmers & Families Retaliation Hurts Rural Families initiative, said his family " got into farming to sell beef, not to accept government assistance."
“Farmers and families across the heartland have been struggling to keep their heads above water as trade tensions continue to increase and retaliatory tariffs are levied against their products," said Guernsey. “Ninety-five percent of the world’s population is outside of the United States and farmers rely on their ability to export goods to these critical markets in order to make a living for their families. Rather than accepting retaliatory tariffs and seeking to offset them with federal assistance, America’s producers believe the administration should look toward solutions that will enable them to export their homegrown goods to critical markets around the globe."
The Renewable Fuels Association (RFA) hopes the benefit of providing RVP relief is recognized as administration explores trade mitigation options.
"The ethanol industry is an important value-added market for corn growers and with another record crop on the horizon, any chance to create additional market opportunities will help. Market opportunities such as year-round access to 15% ethanol (E15) would be a step in the right direction," said RFA President and CEO Bob Dinneen. "This would increase demand for higher level ethanol blends, stimulating more growth in rural America, and helping to counteract the prohibitive tariff and non-tariff trade barriers that China and other countries have placed on American agricultural products. We look forward to working with the administration to ensure free trade for all consumers across the globe."
Wisconsin legislators held much the same sentiment as farm groups.
U.S. Sen. Ron Johnson said, “Time and time again I’ve heard from farmers that they want trade, not aid. Instead of throwing money at a problem we’ve helped create, the better option is to take action to make it easier for our farmers — and manufacturers — to sell their goods at fair prices to consumers around the world. I support President Trump’s call for reciprocal trade and his effort to stop China’s theft of American intellectual property. But we should stop self-inflicting permanent damage to America’s economy through tariffs and a trade war.”
Rep. Ron Kind also pushed for trade, not aid.
“Our farmers aren’t looking for government hand-outs - they just want market access and the opportunity to compete," said Kind. "This temporary fix, which is expected to cost billions of dollars, will right a wrong that was inflicted by the President himself, and could be lifted at any time.”
In a letter to Secretary of Agriculture Sonny Perdue, Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer, U.S. Senator Tammy Baldwin offered suggestions for the administration on how to bring immediate relief to Wisconsin farmers, including using tools provided in 2018 Omnibus to provide direct assistance to farmers struggling under tariffs and prioritizing commodity purchases of agriculture products, including for donation to food banks to help with oversupply. The letter also called for a strategy to maintain the strength of agriculture exports.
"The retaliatory tariffs are also taking effect at a time when the agriculture economy is already facing severe challenges with low prices and oversupplies" said Baldwin. "In the past year, Wisconsin has lost more than 500 dairy farms. Without prompt action, we could lose farmers and the rural businesses they support and depend on at an even more rapid rate.”