Trump loves farmers, but his policies haven't always helped
Posted February 2, 2020 5:54 a.m. EST
CNN — President Donald Trump says, often, that he loves America's farmers.
While they've got caught up in his trade war with China, the President has taken several steps to shore up the support of the agricultural industry, a key part of his political base.
Farmers "are great patriots," Trump said in early 2018. "They understand that they're doing this for the country. And we'll make it up to them. And, in the end, they're going to be much stronger than they are right now."
He's paid out $28 billion in federal aid -- about double the final cost of the 2009 auto bailout after the financial crisis -- to help those hurt by his trade war with China, recently overturned an Obama-era rule despised by farmers fearful of government overreach, and pledged to boost ethanol demand.
But as the election year heats up, it's unclear whether farmers are better off than they were before Trump took office. Net farm income has climbed since 2016, but is well off its 2013 peak, according to the Department of Agriculture. It would likely have shrunk last year without the trade aid package. Bankruptcy filings jumped 20% in 2019, the highest level since 2011.
Many farmers have stuck by him, and say they believe new trade deals will make the pain from the tariffs worthwhile.
"I am glad he is supporting us like he is, even though we've had all these tariffs and everything. Short-term, we're hurting. But I think in the long-term it's going to help us," Texas farmer Donald Fuchs told CNN earlier this month at the annual American Farm Bureau convention where the President spoke.
But others have expressed frustration, and some have even said they no longer support the President.
Here's how Trump's agricultural policies have played out.
Rolling back Obama's water rule
Less than two weeks before the Iowa caucuses, Trump delivered a big gift to farmers. His Environmental Protection Agency rewrote the Waters of the United States rule, long lamented by farmers fearful that they'd lose control of their land.
"Farmers are thrilled," said Jerry Hagstrom, who runs the agriculture-focused newsletter the Hagstrom Report, at a panel on agriculture policy hosted by the American Enterprise Institute earlier this week.
Support within the agricultural community for the change is "universal," he added. "There's almost no criticism of it."
The Obama rule aimed to protect waterways from pollution, limiting chemicals like those in fertilizer and pesticides that can be discharged. Trump's rule will maintain those protections for big bodies of water, but it excludes smaller streams and wetlands.
"The 2015 WOTUS rule was an illegal effort to assert control over private property -- and we fought to have it repealed -- but it also needs to be replaced, and today's action is the last step in that process," said National Cattlemen's Beef Association President Jennifer Houston in a statement.
"President Trump, EPA Administrator Wheeler, and Assistant Secretary of the Army R.D. James deserve a lot of credit for listening to cattle producers and for working with us to get us to this point," she added.
Frustration with Trump's ethanol policy
Early in 2019, the farm industry was pleased Trump followed through with his promise to allow for the year-round sale of gasoline blended with 15% ethanol, known as E15, meant to boost demand for corn. Under Obama, the EPA imposed a summertime ban.
But overall, the Trump administration's ethanol policies have frustrated farmers, especially in August when his EPA granted 31 waivers to small refineries, temporarily exempting them from biofuel laws. The waivers free refineries from having to blend biofuels like ethanol into their gasoline.
At the time, the President tweeted that a "giant" ethanol package was in the works. The EPA later came out with a new rule aimed at making up for the ethanol gallons lost to the waivers. The agency said it delivered on Trump's promise to expand biofuel requirements.
But the way in which the EPA said it will calculate those gallons did not satisfy the industry. Iowa Senators Chuck Grassley and Joni Ernst, both Republicans, took issue with the rule.
"While I'm hopeful we get to the 15 billion or more gallons of ethanol that we've been promised, I clearly understand the hesitation from Iowans to trust the word of EPA to actually follow through on that commitment," Ernst said in a statement, but drew a distinction between the rule and Trump, who she believes "wants to do right for the biofuels community."
Not only did China target American farmers with tariffs, but so did allies like Canada and Mexico -- temporarily -- in retaliation to Trump's steel tariffs. Plus, the years-long negotiation over the US-Mexico-Canada Agreement created great uncertainty in two big neighboring markets.
For about a year, the Chinese tariffs wiped out what was once the biggest foreign market for soybeans, sending prices plummeting.
But the newly inked USMCA and preliminary, phase one China deal have some farmers breathing a sigh of relief. The deals provide some stability for markets this year.
But the USMCA does little more for agricultural trade, which was mostly tariff-free under the North American Free Trade Agreement it replaced, and the China deal leaves damaging tariffs in place. Beijing has pledged to step up its purchases of agricultural products, but analysts are skeptical they'll be able to meet the additional $32 billion goal.