MORGAN, Minn. — The group bearing the brunt of the impact for the Trump Administration's trade policies got a chance to voice its feelings last week about the ongoing trade war with China.
The U.S. House Agriculture Committee held a listening session to gauge the impact of trade and agriculture policy in farm country and hundreds of farmers, ag industry leaders and others turned out for the session, packing the main building at Farmfest on Aug. 7.
U.S. Agriculture Secretary Sonny Perdue, a key player in orchestrating President Donald Trump's trade policy moves, fielded questions and comments. And while he seemed to listen and respond with compassion, he struck back at times with defenses of the president's trade negotiations.
“We’re already seeing the short-term pain (in farm country) and that’s why we have the market facilitation program that tries to backfill as much of that pain as possible," Perdue said. "It’s not designed, nor is it intended, nor is it expected to make people whole. And any farmer would rather have a good crop than the price of a government check.”
Perdue's appearance came days after Trump pledged to slap 10 percent tariffs on $300 billion of Chinese imports. In retaliation, Beijing announced it was canceling all purchases of U.S. agriculture goods and later devalued the country's currency, the yuan, to make Chinese products more palatable to foreign markets.
The trade war is now in its second year. In 2017, Chinese buyers imported $19.5 billion in farm goods. That dropped to $9.1 billion last year and during the first six months of this year, China's ag imports from the U.S. were down 20% from the same period last year.
Soybean farmers are among those feeling the pain more acutely. From September 2017 to May 2018, soybeans exports to China totaled 27.7 million tons. That number dropped by more than 70% to 7 million tons during the same nine-month period in 2018 and 2019, according to an analysis by University of Missouri.
All of those numbers come down to money for farmers. Net farm income has dropped by nearly half in the past five years, from $123 billion to $63 billion. As a result, family farm bankruptcies have been rising across the map.
At Farmfest, farmers voiced their anxiety and fear about whether they or the next generation on the farm would be able to survive.
"President Trump is trying hard to make his trade deals. But some of the rhetoric, that farmers are starting to do great again, we're not starting to do great. Things are going downhill and downhill very quickly," said Brian Thalmann, a fifth-generation corn and soybean farmer from Plato and president of the Minnesota Corn Growers Association. "I hope that when some of these trade deals get completed there will be a place for my son, and everybody else's sons and daughters, to still be involved in agriculture."
Addressing the 'elephant in the room'
Early on, the "elephant in the room" emerged. Several farmers stood to ask Perdue about his strategy in negotiating new trade deals with China and when they might be able to expect some relief.
“The taxpayers and we as farmers need our markets back and prices,” said Gary Wertish, president of Minnesota Farmers Union. “This is causing long-term devastating damage to not only farms but to rural communities."
Farmers' concerns were clear as they stepped up the microphone to ask for answers about the ongoing trade war and about what could be done to relieve the stress farmers were enduring. As reporters met Perdue, other farmers yelled their questions and told the secretary that the market facilitation program wasn't helping farmers whose land was flooded, preventing planting.
“We’re always concerned about losing farmers, but there again, the government can’t support any business and every business,” Perdue said. “Market facilitation is the best we can do to help farmers."
Perdue listened attentively to the dozens of speakers at the listening session, but on the issue of trade, he insisted that the Trump administration was working in farmers' best interest to strike a fair trade deal.
“We probably, as an industry, became too dependent on one major customer,” Perdue said, citing the nearly 60% of American soybeans that had been sold to Chinese markets. “My goal would be to have China play fair. ...They need to change their ways and change their culture instead of trying to build their economy on the backs of cheating.”
Perdue said it isn’t clear when the trade war will end. “It needs to end when it’s resolved,” he said.
Talks between the two nations are expected to resume next month in Washington.
A push for the passage of USMCA
Following the session, Zippy Duvall, president of the American Farm Bureau Federation, encouraged support of another trade deal, the U.S.-Mexico-Canada Agreement, which would replace much of the policy that was in the North American Free Trade Agreement, and patience for a fair deal.
"We need markets more than we need payments and in the long run, that's what this president is trying to do," he said.
Members of the congressional panel and farmers in the audience said Congress should push forward with the ratification of the USMCA.
Reps. Jim Hagedorn and Pete Stauber, both Republicans, said they want to see quick passage of the trade dea. Ag Committee Chair Collin Peterson, a Democrat, noted he was onboard with the deal early on. House Speaker Nancy Pelosi and Trump have locked up on the issue after the trading barbs on separate political issues.
Rep. Angie Craig, a Democrat representing Minnesota's 2nd District, said she has reservations about the proposal.
"I want to get to yes," Craig said. "It's frankly enraging to me that we've allowed brand name pharma to get into a trade agreement when they weren't there before and risk the idea that prescription prices are going to go up in this country even more."
If ratified by Congress, the USMCA would also have to be approved by Canada. Mexico has already ratified the proposal.