LONDON, Ohio — With farm profitability, trade and conservation at the height of farmers’ minds, this year’s Farm Science Review opened with a discussion about where farm policy is headed, including efforts to write the 2018 farm bill.
A panel of ag economists within Ohio State University’s College of Food, Agricultural and Environmental Sciences tackled the biggest policy issues facing farmers, moderated by Ohio Farm Bureau Communications Director Joe Cornely.
Trade has been the hot-button word this year, followed closely by “tariffs.” In fact, the same day the panel spoke, they were learning about $200 billion in new tariffs imposed by the U.S. on Chinese goods, and a $60 billion retaliatory response by China — all which happened today, Sept. 18.
“These are interesting times,” said OSU economist Ian Sheldon, who is also the Andersons Chair in ag marketing.
The total effect of the tariffs could cost a typical grain farmer 59 percent of his income by the year 2024, according a study Sheldon put together with his colleague, OSU ag economist Ben Brown.
The greatest danger is if tariffs continue beyond the current growing season, which could further widen the price difference other countries get for their soybeans and other farm commodities, and the price received by U.S. farmers.
“It (the tariffs) drives up internal Chinese prices and it drives down world prices,” Sheldon said, adding that the tariffs basically act as “a tax on consumers.”
Current soybean prices in Farm and Dairy’s readership area are hovering around, and below, the $8 mark, challenging farm profitability in a year which record yields are expected.
Conservation also continues to be a major issue on farmers’ minds — with increased regulatory pressure to improve water quality, and the added challenge of a changing climate and heavier rain events.
Brent Sohngen, OSU environmental policy economist, said its good to see some climate-related policy in the farm bill, even though “the farm sector is incredibly resilient” to the changing climate, even without policy.
He said Ohio farmers are definitely facing changes in their weather patterns, with an increase in heavy rain events that exceed 1 inch of precipitation. He questioned whether the current conservation practices being used on Ohio’s farms are producing the results they’re supposed to, instead suggesting the farm bill focus on block grants for local communities, or a system of nutrient credit trading.
“We spend a lot of money on it (water quality) but we don’t get the results out of it we want,” he said.
Part of the reason the Chesapeake Bay was able to clean up its own watershed was because of the shift away from agriculture, to more urbanization and the planting of more trees, Sohngen said, adding that the same move is probably not the right fit for the Maumee Basin, but is still an example of something that worked.
Cornely said if farmers want to affect farm policy, they need to work together and work with their lawmakers. As the farm bill discussions continue, farmers are paying close attention to what happens with crop insurance, and specific conservation programs, like the Conservation Reserve Program and the CSP.
Lawmakers are considering whether to increase CRP acreage and by how much, what to do with crop insurance and programs like the Environmental Quality Incentives Program.
The Senate and House are divided over how much these programs should be expanded or retracted, and there is uncertainty whether the 2018 farm bill will get done this year.
Brown said the low commodity prices does add some urgency, because farmers are hurting, but it’s unclear how fast Congress will move. The farm bill conference committee will also need to reach an agreement on food and nutrition spending, and whether to change work and applicability rules for those who receive government benefits.
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