Are More Farm Subsidies on the Way?

Signals were sent the morning of May 10th the Trump administration is looking to pursue more federal action to offset the negative impacts of their ongoing trade war. The President took to Twitter to talk about there being “no need to rush” trade talks with China. In his same statement, Trump said, “we will buy agricultural products from our Great Farmers…” Is a second round of federal intervention what farmers want or is it a return to having a market for their products? “Trade, not aid.”

Below is the Twitter thread from the President. You can click on it and view the full thread of tweets. At the end of the second tweet going into the third, he talks about the federal government buying agricultural products.

Talks with China continue in a very congenial manner – there is absolutely no need to rush – as Tariffs are NOW being paid to the United States by China of 25% on 250 Billion Dollars worth of goods & products. These massive payments go directly to the Treasury of the U.S….

— Donald J. Trump (@realDonaldTrump) May 10, 2019

It isn’t just the President signaling support for more federal intervention in agriculture. According to social media, North Dakota’s Senator Kevin Cramer joined a radio program in Fargo the same morning of Trump’s “no need to rush” tweet declaring “US soybean producers need to get some kind of subsidy since soybeans are greatly affected by US trade policy.” That is quite the turnaround from Cramer’s past positions on agriculture and his view of farmers.

At the end of April, U.S. Secretary of Agriculture Sonny Perdue visited North Dakota to discuss a variety of farm-related topics including trade. I spoke with North Dakota’s Agriculture Commissioner Doug Goerhing on my KFGO radio show “Afternoons Live” about that visit and asked about the potential for another round of federal bailouts for farmers. “It doesn’t even look like it’s even a consideration,” Goerhing said. “Purdue said it’s not on the table, it’s not for discussion,” Goerhing concluded by saying you never really rule anything out.

The question on federal intervention was raised because earlier that morning Bloomberg reported that “U.S. farm income dropped the most since 2016 as the trade war losses mount.” “One-time subsidy payments from the Trump administration to compensate producers for some of their trade-war losses helped prop up farm income in the previous quarter, but earnings plunged by an annualized $11.8 billion in the January to March period, according to seasonally adjusted data.”

I bring up that exchange with Goerhing because it was two week ago that the United States Secretary of Agriculture said more federal aid for farmers was “not on the table.” Today, the President signaled otherwise. A complete reversal or lack of communication? It begs the question, does the Trump administration have a plan or are they just winging it with agriculture and trade? Secondly, how much longer can farmers handle the uncertainty?