President Trump’s trade war with China has hit farmers especially hard. Beijing has sharply reduced Chinese purchases of U.S. farm products or cut them off completely. The loss of sales has led to talk that Trump may have put parts of rural America into play during the 2020 election.
Sen. Mike Braun, a freshman Indiana Republican, sees it differently. Yes, the farming industry is in a rough patch and is taking a lot of the heat in the trade war. But, in Braun’s estimation, the people who think that farmers are breaking away from Trump because of that are flat wrong.
“Farming has much deeper problems. Trade and tariffs are just the salt in the wound,” Braun said in an interview with the Washington Examiner.
The costs farmers confront, such as seed, are at record highs at the same time their products are selling at historically low prices. International trade is the major part of the problem, Braun said, but that is mainly due to the simple issue of supply and demand. “We’ve never competed with foreign producers like we are currently. In South America. In Asia. In Africa. Everywhere.”
Braun, 65, represents a heavily agricultural state, serves on the Senate Agricultural Committee and was himself part of the farming industry. In 1979, he co-founded Crystal Farms, a Midwest turkey supplier that he sold in 2012. “I know more about farming than any U.S. senator because I am involved in it,” Braun said.
Beijing’s Commerce Ministry announced in August that it had stopped buying U.S. agricultural goods in retaliation for the Trump administration decision to place new tariffs on $300 billion worth of Chinese goods. Beijing has since backed away from that threat, but purchases of products like soybeans remain far below last year’s levels.
At a surface level, the trade war would appear to account for the woes farmers are currently facing — farm bankruptcies are up 13% in the past year, the American Farm Bureau Federation reported in late July. The farm group, however, like Braun, said the trade war was just one facet of the problem, with low prices, mounting debt, and natural disasters at least as much of a concern.
Indeed, polls have consistently found strong support for Trump among farmers. A July survey by the trade publication Farm Journal gave Trump a whopping 79% approval rating.
Directing substantial amounts of aid to farmers hasn’t hurt. The administration announced in May that it would make $16 billion in payments to farmers to compensate for Chinese trade retaliation. That followed on top of $12 billion in assistance last year, also to make up for disruptions caused by trade fights with China and others. Farmers receive payments after applying for relief through the Department of Agriculture’s Market Facilitation Program.
Braun pointed to another reason why the trade war hasn’t soured farmers on Trump: China only buys a few products.
“It’s not affecting wheat. It’s not affecting corn. It’s been affecting soybeans, but that is offset by the market facilitation payments,” Braun said, noting that the losses to soybeans are $1 to $2 of the per acre rate for the crops.
He conceded, though, that the payments are not an ideal solution. He’d prefer that the government not get involved because that creates its unknown complications. “But it begs the question of what else we would have done to take China on. The Chinese are smart, so they aim politically at Trump’s strongest group of supporters who are in the weakest shape,” he said. “That’s more of an insight into how tough of a competitor they will become down the road.”
Braun stressed that he doesn’t want to minimize the impact of the trade war for those who are suffering. In any event, there’s no real benefit to farmers in a trade war either way. Ask any farmer, and they’d rather sell their products than taking help from the USDA, he said. The ones who stand to gain from an improved trade deal with China are manufacturers and the high-tech industry.
The senator said that concerns of China “decoupling” from trade with the U.S. and its buying farm goods from other countries are overblown. “In the long run, if the Chinese pull it all away and buy from elsewhere, where do you think the people are going to go that used to buy from the countries that China is now buying from?” he asked. “It’s a world market, and it will all get evened out.”
Braun argued that while the problem may be overproduction and there’s going to have to be a period of adjustment for farmers, it doesn’t mean they have to fold up. It merely means diversifying and looking into new products. The family farm has gone from 160 acres three or four decades ago to something in the neighborhood of 2,500 acres today, he said. “Maybe you start reforesting acres that are cleared.”
The Hoosier Republican can even start to sound a bit like a ’60s hippie when he discusses how producers could adapt, arguing that they should look into organic farming. “I was glad hemp came along because it is maybe another a product you can do in scale,” he said. “Kentucky and Indiana just passed state legislation. I think that is a real possibility in the long run. You’re going to have to do other things with your acres that aren’t in a glut.”