While the Trump administration announced on Tuesday a $12 billion bailout to assist farmers who have been hurt by trade tariffs, one Southern Illinois farmer said the money will help but won’t account for all the money he has lost.
The plan focuses on providing direct payments to Midwest soybean producers as well as people who produce sorghum, corn, wheat, cotton and dairy, and farmers who raise hogs.
David Tiedemann, a Republican St. Clair County board member and a farmer who grows soybeans, said the program would be beneficial to help make up some of the financial loss.
“Part of it is political. (Trump) doesn’t want to lose the rural vote,” Tiedemann said. “It’s good news no matter how you say it.”
The U.S. Department of Agriculture said the proposal would include direct assistance for farmers, purchases of excess crops and trade promotion activities aimed at building new export markets. Officials said the plan would not require congressional approval and would come through the Commodity Credit Corporation, a wing of the department that addresses agricultural prices.
“This is a short-term solution that will give President (Donald) Trump and his administration the time to work on long-term trade deals,” Agriculture Secretary Sonny Perdue said.
Tariffs are taxes on imports. They are meant to protect domestic businesses and put foreign competitors at a disadvantage. But the taxes also exact a toll on U.S. businesses and consumers, which pay more for imported products.
The Trump administration has slapped tariffs on $34 billion worth of Chinese goods in a dispute over Beijing’s high-tech industrial policies. China has retaliated with duties on soybeans and pork, affecting Midwest farmers in a region of the country that supported the president in his 2016 campaign.
Tiedemann said there were rumors that there would be money coming from the Department of Agriculture to help with the depressed prices before the announcement.
“I’d rather have a free market than a subsidy program,” he said. “You hate to be bailed out by the government. I’d rather have free trade.”
Tiedemann said he produces about 22,000 bushels of beans a year, and his profit margin has been cut in half — from $3 a bushel to $1.50 a bushel.
The price of soybeans has dropped from $10 a bushel to $8.50 a bushel in recent months.
“If it gets down to $6 (a bushel), you’re losing money,” Tiedemann said.
The bailout money could help, he said, but it probably won’t make up for the full amount he has lost.
“It’s good you’ve got guys back to work, but the problem is John Deere requires a lot of steel. Now they’re not using imported steel, they’re using domestic steel. Those things are 30,000 pounds of steel per tractor,” Tiedemann said. “The initial cost of that is going up.”
Tiedemann said farmers have been fighting to get their products oversees for many years, before a trade war became household news during the Trump administration.
Local and national organizations react
Lynn Rohrscheib, the chairwoman of the Illinois Soybean Growers, said in a statement that the emergency aid is a “poor solution” and that the organization prefers a path that involves rescinding tariffs.
“As producers, we would rather be able to sell our crop for a fair price and grow both agricultural export and market opportunities. Government handouts only provide short-term relief,” Rohrscheib said. “The effect on our soybean supply chains could be disastrous if the U.S. government continues to pick winners and losers amidst this tariff spat. Our supply chains are already in a dangerous position due to harsh rhetoric, and a government handout only adds to the uncertainty. We continue to advocate for an end to this trade war and echo industry concerns for trade, not aid.”
The Illinois Pork Producers Association said in a statement it remained hopeful trade negotiations would continue.
“While the Illinois Pork Producers Association is supportive of the potential aid to U.S. farmers, we are still optimistic that trade negotiations will continue to take place to ensure long-term success for pork farmers in Illinois, and beyond,” said Jenny Jackson, spokeswoman for the pork producers association.
In a statement, the Illinois Farm Bureau said it wanted the administration to continue to negotiate trade deals with global partners and “to work on resolving unfair trade practices that are the underlying issue.”
“We appreciate the administration’s recognition of the damage these retaliatory tariffs have caused for Illinois farmers — and farmers across the nation,” said Illinois Farm Bureau President Richard Guebert Jr. “However, while we are grateful for the support from the administration, we must stress that this aid package will not make farmers whole in the face of continued trade tensions.”
The American Soybean Association on Tuesday said the administration’s relief program is good in the short term, but that a long-term strategy is needed to alleviate mounting soybean surpluses and continued low prices, including a plan to remove the tariffs.
“Our best course of action is to expand other markets and develop new ones to buy the soybeans we’re not selling to China,” said John Heisdorffer, president of the soybean association. “This means finishing the NAFTA negotiations as soon as possible so we can begin talks on new bilateral agreements with other key soybean markets, including Japan, Vietnam, Indonesia and the Philippines.”
Politicians chime in
U.S. Rep. Mike Bost, R-Murphysboro, said in a statement that he would continue to work with farmers to open up new markets for their products and acknowledged that the emergency aid is only short-term relief.
“This short-term relief program to boost our farmers and ranchers allows the Trump administration time to negotiate long-term trade deals that will benefit Southern Illinois’ agricultural economy,” Bost said. “The United States has been taken to the woodshed for years by unfair and illegal trade practices by China and others, and the administration is right to try and level the playing field. Unfortunately, rather than pursue balanced trade deals, China has responded by punishing our agricultural producers through unjustified retaliatory tariffs.”
U.S. Sen. Dick Durbin, D-Illinois, criticized the bailout in a statement Tuesday.
“Bailouts, tweets, and bragging won’t save the lost crop value for our farmers and won’t protect their reputations around the world as reliable sellers,” Durbin said. “The president’s scorched earth trade war has put a lot at stake for Illinois and our rural economy. Soybean farmers in Illinois tell me that since the start of the president’s trade war, they’ve seen their crop value drop by 20 percent. Declaring a trade war on the world, instead of the truly bad actors, leaves a lot of collateral damage.”
In Kansas City on Tuesday, Trump told a veterans convention that he was trying to renegotiate trade agreements that he said have hurt American workers, and he asked for patience ahead of key talks.
“We’re making tremendous progress. They’re all coming. They don’t want to have those tariffs put on them,” Trump told the Veterans of Foreign Wars national convention.