Why US farmers love Trump

US farmers uneasy with Trump trade agenda, but most stay loyal


US farmers are cheering Donald Trump's environmental re-set, but unsure what to expect from Washington's ag trade and tax policies


Rural Americans are apparently getting poorer, and many are extremely nervous about losing agricultural trade opportunities, but on average they still love unorthodox President Donald Trump.

A year after his surprisingly strong US presidential election win, Mr Trump’s agricultural agenda remains a bit of a mystery to the farm sector.

He only last month appointed a Secretary of Agriculture to his cabinet.  

Yet despite rising reservations about the new administration’s grasp of agricultural industry concerns, its conflicting ideas on trade policy and even its long-promised tax reforms, producers remain largely supportive of the Trump presidency.

The main reason is Washington’s tough stance on dismantling or modifying many environmental laws and government attitudes which farmers found increasingly bureaucratic and unfair during the previous Obama administration’s eight years in the White House.

“I think President Trump still has a very strong following, and folks in his core rural constituencies will be with him the loudest,” said recently retired US farm sector lobbyist, Bob Young.

He’s not going so great on what he said he’d do in many areas, but he has been supportive on environmental issues which ordinary farmers found confusing and unpopular - Dr Bob Young

“Farmers are mainly swayed by the environmental changes.

“He’s not going so great on what he said he’d do in many areas, but he has been supportive on environmental issues which ordinary farmers found confusing and unpopular.”

Dr Young, the recently retired chief economist and deputy director of public policy for the 6 million-strong American Farm Bureau, told the Australian Farm Institute’s recent roundtable conference “we find ourselves where we are, and we’re still working it all out”.

“During the presidential campaign there was a lot of discussion about the qualification the various candidates brought to the table, and Donald Trump presented as a shrewd businessman who knew how to make things happen.

“To a large extent that’s kinda why a lot of folks decided to hire him as president.

“But it’s one thing to run an election campaign and be in business, it’s another thing when you are actually the president of the USA.”

Former US Farm Bureau boss, Dr Bob Young.

Former US Farm Bureau boss, Dr Bob Young.

Like the rest of the world watching the unusual first year of the Trump presidency, the US farm sector has seen election promises drift, or the rhetoric change, while many key personnel heading the Republican government’s agriculture department are yet to be appointed, or have come and gone.

Last month new Agriculture Secretary, Sonny Perdue, suddenly scrapped a complicated market reform aimed at levelling America’s meat packer-dominated livestock and poultry markets, just as it was set to become law.

The changes had been supported by non-aligned cattlemen, pig farmers and poultry producers who had spent almost a decade campaigning for reforms.

New trade agenda fears

On the trade front, farmers and agribusinesses of all sizes are uneasy about the Trump administration’s attacks on free trade agreements, in particular its views on the viability of the 13-year-old North American Free Trade Agreement (NAFTA) with neighbours Mexico and Canada, which is now being reviewed.

The Trump team’s talk of quitting NAFTA has been roundly criticised by the farm sector.

NAFTA partners accounted for about $51 billion of the US’s $183b ($US140.5b) agricultural trade in 2016-17, .

Farm leaders claim even suggesting a US withdrawal could destabilise trade activity and substantially harm farmers, ranchers and the broader economy.

Early this year the US pulled out of the Trans Pacific Partnership (TPP) trade plan with Australia and host of Asian and South American countries citing a new preference for bilateral country-to-country trade partnerships.

Dr Young said while some US industries such as Californian tomato growers were “genuinely scared” of increasing competition from Mexican growers, others such as the dairy and beef industries had gained much from NAFTA links with Mexico.

Supply chains between Mexico, the US and Canada had also become closely integrated.

Mexican standoff

While immigration from Mexico was a contentious and emotive election campaign theme for President Trump, US cattle producers recognise 83pc of Mexico’s imported beef is sourced from their farms.

Dr Young said at least 1m Mexican cattle were trucked north to US feedlots for fattening each year, then returned to markets south of the border, while the Californian and Texas dairy sectors had extended production facilities into Mexico, including feed production and customer bases.

Rail company Kansas City Southern had invested billions of dollars on rail links into Mexico and within the US to improve the flow of grain and agricultural goods being now being traded.

“You’ve got to wonder why a country so important to us is in the position we see it in at the moment,” he said.

“Most folks seem to think Mexico causes very little harm – we actually have more trade disputes with Canada.”

US farm and agribusiness are worried even suggesting a US withdrawal from the North American Free Trade Agreement could destabilise agricultural trade activity and substantialy harm the broader economy.

US farm and agribusiness are worried even suggesting a US withdrawal from the North American Free Trade Agreement could destabilise agricultural trade activity and substantialy harm the broader economy.

However, farmers have been relieved to finally see President Trump’s long-promised tax reform proposals, particularly plans to eliminate death taxes by 2024, although observers say the real beneficiaries will likely be wealthy business bosses, not farmers.

Long-time Illinois-based agricultural writer, Alan Guebert, noted while most farm groups had hoped, prayed and begged for this Christmas present for years, congressional research showed just 65 farm or ranch estates actually paid inheritance taxes in 2015.

Tax reform winners

On the other hand, he said the final Republican Party tax plan would collectively save more than $US3b in estate taxes upon the deaths of just four White House officials, including the President and his Commerce Secretary, Wilbur Ross.

Attempts to simplify US tax policies also appeared to fail according to Mr Guebert.

“Although nearly every major farm and commodity group enthusiastically endorsed congressional efforts to reform the federal tax code, experts agreed during the Senate debate that the effort, if completed, would ironically add another 10,000 pages to today’s already hog-choking 70,000-page federal tax code,” he said.

Others fear the tax reforms will pay now, but blow out America’s long-term debt.

Meanwhile, Mr Guebert said recent US Department of Agriculture research showed the gap between rural poor and non-poor continued to widen, “and faster than in any of the nation’s grittiest cities or suburban counties”.

USDA and University of New Hampshire studies pointed to a dramatic downturn in rural America’s economic and social outlook in the past decade and few signs of a quick turnaround.

The story Why US farmers love Trump first appeared on Farm Online.


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