Max Pixel
My grandfather, who was a dairy farmer, would often say, “farmers do not need to go into a casino to gamble. They do it every single day, just going to work.”
Farmers roll the dice on the weather, which can deliver unseasonably late snow falls, harsh droughts, and sudden floods. They lay odds on the prices they’ll receive for what they produce. Price changes have become especially troublesome over the last couple of decades, with corn, soy, milk, wheat — really, every commodity — experiencing fluctuations that graph like a roller coaster.
But now they are being presented with another wild card — the Trump administration’s trade war with China, Mexico and Canada. It is creating additional uncertainty in an already difficult line of work.
In response to Trump’s tariffs, Mexico imposed new duties on cheese while China is focusing on soy, hurting dairy farmers in Wisconsin and soy growers throughout the Midwest. Now Trump has directed that $12 billion dollars in direct payments be issued to farmers who have been negatively affected by his trade dispute.
But U.S. farmers do not want a taxpayer bailout. They want to be able to sell their products at a fair price.
Falling prices are already a huge problem. Soybean prices, for instance, have fallen 13 percent since the start of the year and are now at a 10-year low. Milk prices are also bottoming out, with Wisconsin losing more than 500 farms in 2017. A bad situation is getting even worse for farmers as countries cut their imports from the United States.
Trump tells rural communities to trust him and wait for positive results. But on what is this trust based? Perhaps the Trump administration will negotiate an arrangement with the Chinese government to purchase even more U.S. farmer exports. It is also possible that NAFTA renegotiations could also lead to better terms for farmers.
Trump tells rural communities to trust him and wait for positive results. But on what is this trust based?
But the opposite scenario is just as likely, if not more so. While Trump ponders his negotiating tactics with the Chinese, Brazil is increasing its soy exports. In fact, there is nothing stopping China from continuing to shift its focus to Latin America, and away from the United States for grain.
Additionally, with NAFTA negotiations effectively stalled until Mexico’s next President, Andrés Manuel López Obrador, takes over on December, it is unlikely that real changes in agricultural policy will take place between Mexico and United States. For dairy farmers particularly, this offers little respite, given that cows cannot be told to stop producing milk.
If Trump really wants to earn farmers’ trust, then his administration needs to seriously work on legislation that ensures family farmers a fair price that covers their cost of production. Such a policy would be redistributive in nature, potentially targeting the excessive profits of big box megastores, which are raking it in as rural America goes bankrupt. The farm bill offers potential support for some farmers, but nothing that truly fixes the dismal pricing system in the long run.
Trump’s $12 billion bailout may help a few farmers, but only for the short term. What about next year? Family farms are not quick start-ups, but enterprises that are build upon generations of experience.
My grandfather, if he were alive today, would not be surprised to find farmers still gambling with the weather and the market. But he would be shocked to see the president of the United States apparently working to rig the game against them.