KNOXVILLE, Iowa — Today President Trump will address the American Farm Bureau’s 100th annual convention in New Orleans. But any promises of help will be too late for many farmers.
Had he set out to ruin America’s small farmers, he could hardly have come up with a more effective, potentially ruinous one-two combination punch than tariffs and the shutdown.
The trade wars collapsed farmers’ markets. Now, with farmers down, he’s kicking them with a partial shutdown that has effectively slammed the door on farm payments, loans and more. It’s hurting rural Americans — those who formed a big part of the base of Mr. Trump’s support in 2016.
Normally, January is a special and often joyous month for farmers, as they recover from the hard work of harvest and look to spring and a new planting season. They have sold much of their crops and are paying bills, taking out new operating loans for the coming year and buying seed, fertilizer and more.
Not this year. With his tariffs, Mr. Trump kicked the legs out from under the markets. Much of our soybean and corn crops had nowhere to go. The agricultural giant Cargill repeatedly idled its two terminals on the Mississippi last fall for lack of work, and in November, workers stayed home unpaid, a nearly unheard-of occurrence. Between September and December, soybean volumes were down 40 percent on the year.
Here in Iowa, farmers unloaded their soybeans when they could at low prices. Extreme weather left many farmers with a low-quality product that they thought wouldn’t store well. They’re sitting on their corn with the hope of better prices down the road. Hog producers are losing about $18 a hog, with cumulative losses in the millions, if not billions.
During the farm crisis of the 1980s, farm families wondered how they were going to keep the farm afloat. The story is the same in 2019. Farm real estate listings have doubled; in Minnesota, there are more than double the number of farm bankruptcies than there were in the same period in 2013 and 2014. Dairy associations are publicizing suicide hotlines. Bankers have publicly stated that the rural economy is suffering because of “bad policy from the White House.”
That’s just the tariffs. A banker friend bent my ear the other day to lay out the other hammer being brought down on our farmers: the Trump shutdown.
Remember the $12 billion tariff bailout fund — a Band-Aid on a shotgun wound, but better than nothing? With the shutdown, the president cut that off. The bailout is called the Market Facilitation Program, run by the Agriculture Department’s Farm Service Agency, and the offices that accept applications and handle payments are closed. Many producers held off signing up before the end of 2018 because they didn’t want to declare the income this year on tax returns. For now, they are frozen out.
Any farmers who have a loan with the Farm Service Agency will have the agency’s name on any checks they get in the mail for sales of grain or cattle. Now no one at the agency can sign their name on those checks, and they can’t be deposited until that happens. Those farmers can’t get money to pay bills.
Farmers who are in financial straits can’t apply for a guaranteed loan from their local bank, because they have to look for F.S.A. concurrence when decisions are made on one. When banks can’t get the confirmation, farmers can’t get loans.
Money isn’t moving, and when farmers aren’t moving their money, whole towns suffer. Thousands of towns. All across America.
Mark White has been farming for 40 years. His farm, which his brother rents and operates, is just south of the county line, near Williamson, Iowa, population of approximately 150. Mr. White works with Smith Fertilizer and Grain, a full-service fertilizer, feed supplier and grain-receiving facility.
“The biggest problem is immediate cash flow,” he said. “It doesn’t necessarily mean that they are broke — or headed out of business — but they are having to use some equity that they have built up over the years to survive a downturn like we are in.” Using equity, he said, means putting land or equipment up as collateral against operating notes, or past operating notes they can’t pay off. He says this can be risky and is “taking a step backward.” Younger farmers and farmers who rent and don’t own land are more at risk.
These less secure farmers with cash flow problems are the ones most at risk during the shutdown because they can’t cash F.S.A. checks or get loans. Farming for most is a losing proposition already because of low commodity prices — the tariffs and shutdown hurt even more. Many Americans can’t afford to lose their monthly paychecks — and that includes farmers. My banker friend tells me we lost a generation of farmers because of the farm crisis of the 1980s, and if it gets much worse, she fears we could see it again.
Most rural American farms are not big corporate operations. The most recent available farm census data, from 2012, shows that Iowa has nearly 89,000 farms, and 57 percent are small farms under 180 acres. Generally, to make a living on farm income, operations of at least 225 to 750 acres or more are needed. Of the farmers that Mr. Trump’s tariffs and shutdown are hurting, about 80 percent are family businesses.
So “big ag” — the only farmers with the capital to survive over the long term — profits from the blundering crisis. If and when small farmers fail, larger operations can swoop in and buy up the land at fire sale prices. The large seed and other input companies would rather deliver product to one farm in a township than 27.
It’s not all President Trump’s doing. He has only accelerated a trajectory that now seems inevitable — fewer and larger farms.
Yet farmers are smart. This mess is also about politics, and if Democratic presidential candidates pay attention, they might have an opening at least in some parts of rural America. For example, Elizabeth Warren was recently in Iowa. She began her campaign in the heart of “Trump country,” western Iowa — in Sioux City and Storm Lake. She showed us that she is willing to get manure on her boots. Her message resonated — her humble beginnings in a time when a family of three could make a living off one minimum-wage job and send a kid to college, at a time when America worked for the average Jane or Joe, not just for corporate profiteers.
Many more Democrats will follow this year. They should spend a lot of time talking to farmers and be bold in their proposals.
The consequences of failed Republican policy won’t damage only President Trump. His staggering failures in farm country will have an impact on every Republican member of Congress in every state with a rural agricultural constituency — which means every state, period. Congressional Republicans have complained, but they have not acted to stop the president when they have had the power to do so.
Sure, some farmers will follow President Trump to hell and back. They will be cheerleading him from their jobs in town, though, as they surely won’t be farmers anymore.
Others won’t. Maybe they’ll be voting for Democrats.
Robert Leonard is the news director for the Iowa radio stations KNIA and KRLS.
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