Short-term, bilateral tariff squabble is not a strategy, it’s a temper tantrum | Opinion
National Public Radio recently aired a report on the $28 billion that has been spent to compensate farmers for China’s retaliation against President Donald Trump’s tariffs. NPR did not report the whole story.
Farmers are already financially covered for the tariff tit-for-tat price drop with a federally-subsidized insurance program. The insurance program guarantees farmers and landowners a gross dollar return on every acre of crop. The financial guarantee is high enough to cover expenses.
This past year, on land that I own, I was guaranteed $696 per acre on my corn. For this insurance I paid $14.96 per acre. The federal government subsidizes my premium with another $15 per acre. A farmer or landowner with 1,000 acres of corn has received $15,000 in subsidies before a kernel has been planted.
This $28 billion expenditure becomes even more offensive because more than half of the money doesn’t go to farmers at all.
In the Midwest, over half the cropland is owned by non-farmer investors or retired farmers, such as me. When I was farming, I rented land owned by a doctor and when he died, his children and grandchildren inherited the land; none of them lived in Iowa and seldom visited the farm.
Every time the federal government stepped in to save us farmers, half the money went to San Francisco, New York, and Chicago.
As an Iowa landowner living in Beaufort, the federal government recently deposited a sizable credit into my bank account. It just doesn’t make good sense.
And lastly, what makes farmers so special? Regardless of what anyone says, tariffs are an indirect tax on the consumer. How are consumers being compensated? When China responds to the tariffs, other industries besides agriculture are impacted. Are those industries and their employees being compensated? Not likely.
With this being said, farmers are being pinched, but there is a big difference from being pinched to being in financial trouble. This program is not about saving the family farm, but rather paying farmers and landowners $28 billion to keep their mouths shut and garnering votes in the Midwestern swing states.
I farmed for 46 years, and my father and generations before him all farmed. The first thing a young farmer learns is farming has its ups and downs. Whether it is drought, pests, flooding, blizzards, or market swings, one learns to persevere and ride it out.
The problem with Trump’s tariff strategy is the long-term damage to our farm markets. For decades millions of dollars was raised with a farmer-initiated, voluntary check-off on every bushel of corn and soybeans produced. This check-off was used to create markets for our crops. Much of this check-off money was used to promote our products overseas.
The cornerstone of the promotion was the American farmer as a reliable supplier. This tit-for-tat tariff fight has made China and other countries rethink the reliability of this established supply chain. As I write, Brazil is destroying more of its rain forest to become the new supplier of soybeans to the world.
China wants to become a bigger player on the world stage. That is true of all nations. Unlike democracies, China has the advantage of planning and implementing a long-term strategy without political restraints. If the United States wants to remain the preeminent economic power, it will have to develop a long-term strategy. To be successful, the formulation of the strategy must include other nations in the Pacific Rim.
A short-term, bilateral tariff squabble is not a strategy, it’s a temper tantrum.
Government spending should be thoughtful and efficient. This $28 billion boondoggle to farmers and landowners does not meet those criteria.
Gene Blanshan recently retired in Beaufort. He served five terms in the Iowa legislature, and ran unsuccessfully for Congress in 2004.