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Agriculture

US farmers speak out against Trump's trade policy

China tensions and COVID hit agriculture -- and chip away at a key support base

President Donald Trump's onging trade war and inflammatory rhetoric toward China has come back to haunt American farmers.   © AFP/Jiji

NEW YORK -- Christopher Gibbs, a soybean farmer based in Ohio, voted for President Donald Trump in 2016 with high hopes for better policy. But now Gibbs, along with many others, says he is disappointed.

"The president promised better trade deals, but that was all smoke and mirrors," Gibbs told the Nikkei Asian Review. "What we didn't anticipate was that the president would destroy all of these trading relationships that U.S. farmers have built over the past three decades, particularly in China."

In 2016, the rural vote and agricultural support helped Trump into the White House. But as his trade war and antagonism toward China continue to devastate farmers' business, and his pandemic response leaves rural communities in limbo, the question is how much of that support will hold up this November.

Last week, 38 farmers and rural community leaders from six swing states -- Iowa, Minnesota, Wisconsin, Michigan, Ohio and Pennsylvania -- launched a campaign called Rural America 2020.

The nonprofit organization aims to "spread the word about the Trump Administration's rural community failures, give a voice to rural communities, and provide policy solutions for a stronger rural America," according to the organization's website. Rural America 2020 also encourages farmers across the country to tell their own story and grievances with the current administration.

Much recent disappointment is related to the phase one trade deal inked in January, in which Beijing pledged to expand its purchases of U.S. farm products.

"Agriculture as a whole put all of our eggs in that basket, they put all of their hope on rekindling trade with China that we had lost two years of," Gibbs said.

But then the coronavirus hit.

U.S. soybean exports to China, which neared 1.8 million tons in January, plunged in the following months, going as low as roughly 160,000 tons in June, according to data from the U.S. Department of Agriculture. This compares to last summer when, in the midst of trade talks, soybean exports regularly topped 1 million tons a month.

"Up till now, the Chinese are way behind, and it appears they'll have little chance in making up the sales that they committed to," Gibbs said of the phase one deal.

Some farmers are holding out hope for autumn, China's normal buying season.

"We're waiting to see how this fall goes. Typically, [China] buys the biggest percentage of the soybeans right after our harvest or during our harvest," said Joel Schreurs, a soybean farmer from southwest Minnesota. "It's concerning, but I got to believe that all the people that are in charge hopefully have the best interest of the U.S. at heart."

But some experts are, like Gibbs, more skeptical.

"The numbers suggest China is making a good-faith effort to try to live up to its purchasing commitments, but it's simply unrealistic in the current economic environment," said Edward Alden, a senior fellow at the Council on Foreign Relations. "Those targets would have been very ambitious, even without the interruption from the pandemic. ... Those are just targets that are not going to be met."

Making matters worse, the pandemic has also devastated the U.S. services sector, hitting demand from the food industry, the other key customer for American farmers.

In the year through March, 627 family farms in the U.S. filed for bankruptcy, a 23% increase from the previous year, according to U.S. courts statistics. Wisconsin, a state known for dairy and ginseng productions, lead the bankruptcies.

Overproduction coupled with the lack of market access caused milk prices to drop below farmers' break-even level.

"If you look at the last three years, we've lost over 2,000 dairy farms in the state of Wisconsin," said Darin Von Ruden, a third-generation dairy farmer based in Westby, in western Wisconsin. "So really the Trump administration exacerbated a growing problem that's been happening. ... We're not able to get a price that we need to sustain the farms."

U.S. dairy farmers are struggling with plunging prices as opportunities in China dry up.    © Reuters

China's importance as a market has grown because dairy production in the U.S. has outstripped domestic demand, according to Dan Smith, president and CEO of Cooperative Networks.

"It's an international market in China because of its size and its position in the world economy, the number of people they need to feed," Smith said. "It's very important for American farmers to have those trade relationships open and maintained."

Wisconsin is also the home of American ginseng, producing roughly a million pounds every year. Will Hsu's family has been farming ginseng in the midwestern state since 1978. The ginseng produced by roughly 150 farmers in the state depend heavily on retail shops at airports and on exports to China, according to Hsu.

Hsu said his exports to China have fallen by half, and that some of his fellow farmers have told him they are not planting any more.

"If you don't have access to the Chinese customer who values this product, who wants to consume it, then you've cut out probably our most significant market," Hsu said of the tariffs and deteriorating U.S.-China relationship. "The folks that only do ginseng, a lot of them are thinking about exiting... And my concern is 10 or 20 years from now, there [won't be] a lot of farmers growing this crop [in the U.S.] We won't be relevant in the world marketplace."

And what is bad for business could be bad for Trump come November. According to a Fox News poll published in June, support for the current administration among rural communities has slipped significantly in recent months.

In 2016, Trump had a 32% rural vote advantage over Democratic presidential candidate Hillary Clinton. This year, Trump's advantage decreased 23 points to 9% over his Democratic opponent Joe Biden, reaching a new low for Republican presidential candidates over the past decade.

Dee Davis, president of the Center for Rural Strategies who is based in Kentucky, said residents living in rural areas tend to be older and poorer, they need government intervention to hang on until the economy recovers, and they are most concerned about their health.

"They want to wear a mask, they want to stay distant, they want to wash their hands and protect their communities and elders," Davis said.

Trump has repeatedly blamed China for the pandemic, referring to COVID-19 as the "Chinese virus" or "Kung-Flu" on multiple occasions. This rhetoric, which has played to his support base, has spiraled into new rounds of political spats with Beijing, resulting most recently in consulates in both countries being closed.

But focusing on who is to "blame" for the crisis is not helping Trump as much as it did, according to Davis.

"If you can get people to focus on the beginning ... then that takes away from looking at the present problem," he said. "[But] right now, I think in rural areas, people are just concerned about the problem."

Campaign contribution data reveals agricultural trade groups may also be reconsidering their support.

The Nikkei Asian Review has compared campaign contributions from 16 farmers organizations in the U.S., based on data published by OpenSecrets, a nonpartisan group that collects campaign financial data. Some donations are made by the organization, some are made by individuals who are members of the organization.

Out of the 16 organizations, 12 groups' share of contributions to Democratic candidates compared to that of Republican candidates increased in 2020 compared to 2016 and 2018. The changes in contribution share are especially drastic for Dairy Farmers of America, who had given more percentage of funds to Republicans since 2012, with only 26% to Democrats in 2016, in 2020 contributed 61% of total funds to Democrats and 39% to Republicans.

The American Soybean Association's share of campaign contributions to Democrats jumped from 16% in 2016 to 41% in 2020.

But Gibbs, the soybean farmer from Ohio, says support for Trump remains strong among many rural communities.

"This Republican Party [has] metastasized into a cult. If a person speaks anything ill of the president or of the party, they're instantly banished," he said. "And in many communities, that backlash is pretty vicious."

As soybeans are flowering and September fast approaches, many farmers and analysts say China's demand is apparent, and that the country will need American soybeans.

"Obviously we're hearing a lot of language now from the Trump administration that is sometimes a little contentious. The question is, can we maintain that long-term relationship?" said Smith from Cooperative Networks. "Because it's very important for our cooperatives and the agricultural community to have that relationship with China. We need that market."

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