Farmers thankful for payments, but prefer market access

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The 2018 harvest saw strong yields, but low prices.

SALEM, Ohio — Although they’d rather have free trade and market access, farmers say the $12 billion in commodity assistance being offered by President Donald Trump is worth applying for, in a year of high yields and low prices.

Known as the Market Facilitation Program, the program compensates farmers who grew various crops — including corn, soybeans and wheat, and for livestock, including dairy — for price losses due to the trade war of 2018, and retaliatory tariffs that China enacted on U.S. farm goods.

Farmers can receive $1.65 per bushel of soybeans, 14 cents per bushel of wheat, 1 cent per bushel of corn, 12 cents per 100 pounds of milk, and $8 per head of hogs. Sorghum, almonds, cotton and cherries are also included, and the program also sets aside funds for developing new foreign markets, and purchasing more than two dozen select products, including fresh fruits and vegetables, nuts, meat and dairy.

The deadline to apply is Jan. 15, and the deadline to certify production is May 1. There is a cap of $125,000 per producer, for livestock claims, and the same amount for crop claims.

Is it enough?

But even with the help, farmers question whether it will be enough to cover their losses, and for how long.

“It’s really not even going to come close to making up for the damage that the market has experienced,” said John Torres, director of government and industry affairs for the Ohio Corn and Wheat Growers Association.

“What’s going to be most beneficial to farmers is resuming national trade,” he said.

Ron Elliott, a dairy and crop farmer from Knox County, said that assistance “does help,” but that the program is basically a way of compensating for the market potential that the government disrupted.

“I’d much rather get my income from the marketplace,” he said.

Elliott and his brother, Bob, milk about 130 head on a farm that’s been in the family since the early 1800s. He said farmers will have to do some paperwork, but that depending on the size of their operation and what they grow, “it’s going to be worth the effort.”

Reason for hope

In November, the U.S. and China agreed to a 90-day truce over their trade dispute, halting new tariffs that were planned to go into effect Jan. 1, and vowing to work out a new trade agreement by April. But with the details of that agreement still vague, farmers are not convinced they’ll get back what was lost.

Even if the tariffs go away entirely, farmers and commodity leaders are unsure the U.S. will regain its share of the world market.

Kirk Merritt, executive director of the Ohio Soybean Association, told farmers at the annual Grain Farmer Symposium, Dec. 18, that he hopes they take advantage of the trade aid, and that he’s optimistic the Chinese market will come back — but perhaps not as strong as before.

“We’re optimistic that (talks) will lead to some renewal of that market, but I think it’s probably safe to assume it’s never going to be what it was,” Merritt said.

Ultimately, the U.S. may need “to build up additional markets to make up for what won’t be there with China, even if China comes back,” he added.

The U.S. has made progress on agreements with other nations, including South Korea, through a revised U.S. Korea Free Trade Agreement, and through a new agreement with Canada and Mexico, that replaced the North American Free Trade Agreement.

Restoring trade

There is also strong interest in restoring trade with Japan, one of the key Pacific nations that was included in the Trans-Pacific partnership, which was negotiated before Trump took office, and which he pulled the U.S. away from in 2017.

Trump noted his angst for unfair trade policies during his campaign, arguing that China and other countries were taking advantage of the U.S. through poorly written free trade agreements. But the tariffs hit the wallets of one of his strongest campaign supporters — farmers and rural America.

Economists with Ohio State University estimated this summer that the tariffs could cost crop farmers more than half their income, if they continue, and that they’ve already cost the U.S. most of its soybean exports to China, which last year bought more than $1.8 billion of Ohio soybeans alone.

Political support

While the situation has tested farmers’ patience, and cost them money, many still say they support the president and believe his approach to trade will work in the end.

“I think he’s a decent president and I think in the end we will be OK, said Charles L. Kettering, an Ashland County farmer. “I think all he’s trying to do is make this country better.”

David Eichelberger, also an Ashland County grain farmer, said he thinks the president is doing the right thing with trade, but the Chinese, in turn, “are hanging it over our heads.”

He said the aid package will help, but at the same time, “it’s kind of a Band-Aid” compared to what farmers are losing in the marketplace.

Katie Hill, the Farm Service Agency director in Knox County, said farmers have been trickling into the FSA office throughout the fall, as they finish harvest. She said it’s important they keep the deadlines in mind, and keep good records of their yield, just as they should do for any FSA program.

Significant payments

Although the compensation differs widely among the commodities, Hill said soybean farmers are seeing some significant payments, because that crop is compensated the most.

“Any addition they (farmers) can get this year is going to help them with the low commodity prices,” Hill said.

The National Corn Growers Association has argued that the compensation to corn farmers should be higher, estimating that corn farmers lost 44 cents per bushel to tariffs, compared to the 1 cent compensation being offered.

Related coverage:

• Second round of trade mitigation payments announced (Dec. 18, 2018)

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Chris Kick served Farm and Dairy's readership as a reporter for nearly a decade before accepting a job at Iowa State University Extension. An American FFA Degree recipient, he holds a bachelor’s in creative writing from Ashland University.

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