Ben Lilliston: Trump's trade fights expose fragility of the farm sector


From ecoRI News (

Over the last year, President Trump has taken farmers on a roller coaster ride that’s finally gone off the rails.

Escalating trade fights have kicked farmers, already mired in a five-year slump, in the gut. Now, the administration is working up a new trade aid package, while simultaneously opposing aid for farmers recovering from recent Midwest flooding.

What’s going on? If there’s a plan, it’s hard to see from here.

Just in the last few weeks, Trump tweeted a dramatic escalation in new tariffs on China, which immediately announced an escalation of tariffs on U.S. goods, including agriculture products.

A week later, without notice or explanation, Trump ended steel tariffs (based on dubious national security concerns) on close trading partners Mexico and Canada. Yet the same day, Trump signed an executive order threatening new auto tariffs on Japan and the European Union.

If the auto tariffs move forward, Japan and the E.U. will almost certainly retaliate with tariffs on, you guessed it, agricultural products.

In a hasty attempt to put a Band-Aid on these self-inflicted wounds, the Trump administration is proposing another round of trade aid for farmers. The new round comes after promising that a $12 billion trade aid package last year would be a one-time thing, because a China trade deal was just around the corner.

But, surprise surprise, it wasn’t. So the administration backtracked and recently unveiled another $16 billion aid package for farmers hurt by its policies.

The first aid package doesn’t appear to have focused on the mid- and small-sized farm operations that needed it most. The Financial Times found that half of the trade aid money went to just 10 percent of farmers, who used loopholes to elude payment caps.

Moreover, nearly 10,000 people and businesses based in cities — rather than the countryside, where you expect to find farms — accessed the aid. And it was multinational agribusiness firms like Tyson Foods, Cargill, and the Brazilian-owned JBS that benefited when the USDA made large purchases of pork, chicken, and beef.

Trump’s trade disruptions come amid much larger challenges in the agriculture economy. Rising farm bankruptcies, the loss of thousands of mid- and small-size dairies, farm lenders getting tighter with loans, and plummeting land values are all part of the current crisis.

And when it rains, it pours. A series of extreme, climate-related weather events — severe Midwest floods this year, wildfires and hurricanes last year — also hit farmers. Yet the Trump administration has opposed allowing farmers to access disaster aid from these events.

The drivers of our slumping farm economy are longstanding and structural.

We’re flooding the market — too much corn, soy, wheat, and milk. Meanwhile the government has approved a steady series of agribusiness mergers, leading to less competition and fewer choices for farmers.

Federal Farm Bill programs support this system, which precariously relies on expanding trade. If we don’t grow exports, the system collapses — at least for family farmers. It works just fine for the global agribusiness firms that operate in multiple countries and benefit from below-cost corn and soy.

Trump’s dizzying trade disruptions are inflicting real short-term damage, but they’re also exposing the frailty of an agriculture economy built for big business. Instead, we should be looking for ways to reduce overproduction, lift prices to fair levels that keep farmers on the land, and invest public money in climate resilient strategies on the farm.

A different farm economy is possible, but we must come to terms with past mistakes that created this roller coaster.

Ben Lilliston is a senior policy analyst for the Minnesota-based Institute for Agriculture and Trade Policy.

Don Pesci: The anti-sprawl boomerang

  VERNON, Conn.

Not only does every regulation impose additional costs on businesses, excessive regulation also unwittingly embraces unintended consequences that may be fatal to the best laid plans of those who oppose urban sprawl -- the movement of residential and business operations from urban areas to the suburban frontier.

This “Big Bang” movement has been occurring ever since the protective walls of castles disappeared centuries ago.

For anti-sprawlists in Connecticut, many of whom are environmentalists, local farms are essential to a movement that seeks to nudge businesses back into cities; the more farms there are in the hinterlands, the less land will be available for “exploitation” by businesses and home-construction companies. Environmentalists do not generally object heatedly to “urban sprawl.”

Onerous federal regulations on farms have now invaded Connecticut’s environmental Eden.

Connecticut farmers have offered multiple objections to new regulations co-sponsored by 3rd District U.S. Rep.  Rosa DeLauro. Mrs. DeLauro’s district, largely urban, has suffered a crippling reduction in U.S. Department of Agriculture (USDA) subsidies during the last six years. Federal subsidies from 2009-2010 amounted to about a million dollars per year; during 2012, the subsidies for the district dropped precipitously to $157,039.

At the same time, the federal government has a huge deficit; the Obama years alone have added $6.061 trillion to the national debt, which surpassed $18.1 trillion last January. The usual cowardly detours that let legislators  avoid painful spending cuts to balance budgets – massive borrowing, budget shape-shifting and inflating the money supply – are considered politically inadvisable, and so the federal government has begun to trim subsidies; which is to say, the Feds are now backpedaling on their promissory notes to states. Nothing unusual there: In the bust and boom economy, all Americans have become American Indians; the promises of Washington to regulatory victims have been repeatedly and notoriously violated.

The new farming regulations, piled on top of others, farmers say, are costly and complex; but then what federal regulatory instruments are not costly and complex, a virtual playpen for lawyers and tax attorneys? The Obamacare bill runs to thousands of pages; Dodd-Frank financial regulations are not much shorter, and the regulatory apparat in Washington is equally complex and expensive.

Washington specializes in growing the administrative apparat and complex legislation that may be understood only by accountants and attorneys for large corporations that can afford to hire both to avoid taxes and regulations. It is small enterprises – such as farmers -- that feel the sharp edge of the regulatory and tax axe.

Farmers in Connecticut want to be able to grow and offer their produce at competitive prices. Because the profit margin in farming is so small, any additional costs are potential straws that certainly will break the camel’s back and reduce farmers’ very narrow profit margin – or, worse, force them to sell their land to developers, who then may sell the farmland to businesses hoping to cut costs by moving from urban to suburban centers. Result: further suburban sprawl occasioning tons of editorials bemoaning the reduction of “Smart Development.” Connecticut is now witnessing a regulatory snake swallowing its own tail.

One small example may serve for many. The Lydall Farm stand on Route 44 in Coventry has  a handmade sign that says the stand has been in business since 1926, three years before the start of the Great Depression. But this year will be the stand’s last stand. Why? The profit margin is too small and new regulations are far too costly.

So complex are new environmental-protection regulations that nearly any small farmer may now be put out of business by nearly any lawsuit waving bureaucrat or, worse, any consumer protection U.S. Senator (cf. Blumenthal, Dick). Then too, the more time and money small farmers spend complying with byzantine regulations, the less time and money is available to make the crops come out of the ground.

Why not sell the ground?

Though Mrs. DeLauro is chairwoman of the House Agriculture-FDA Appropriations Subcommittee, this Catch 22 may be low on her list of things to worry about. The constituents whom Mrs. DeLauro relies upon to re-elect her to a 12th  term in Congress are, many of them, urbanites who may think  that food is grown in the parking lots of the grocery stores where they buy their lettuce and peaches. These are the nephews and cousins of the magic thinkers who suppose that the nation’s wealth is produced by a golden tree the leaves of which can be cashed in to pay the salaries of the army of bureaucrats pushing farmland into the greedy hands of developers responsible for urban sprawl.

Connecticut Farmers in Mrs. DeLauro’s District keenly feeling the sting of reduced subsidies and excessive regulations know better. But the farmers in Ms. DeLauro’s District who would be willing to vote against pro-suburban sprawlists are far outnumbered by urban dwellers who have not thought about the plight of Connecticut’s small farmers since the Great Depression.

Don Pesci ( is a political writer based in Vernon, Conn.