Ag Policy Blog

National Farmers Union's board of directors voted this week to send a letter to leaders of Congress making the case that a better safety net in the farm bill would be better for farmers long-term than receiving ad-hoc trade aid from the Trump Administration this fall.

Roger Johnson, president of NFU, said his group had maintained the current trade disputes hurting U.S. agriculture would do more long-term damage to markets before USDA announced its $12 billion aid package last week.

NFU wrote to House Speaker Paul Ryan, Senate Leader Mitch McConnell, Minority House Leader Nancy Pelosi and Senate Minority Leader Chuck Schumer. The letter highlights the downturn in farm income from 2014 until now. And the letter lets lawmakers know the current farm programs aren't designed to help a recovery.

"Farm prices are depressed and likely to remain so for the long term due to the failure of the existing farm program to provide an adequate price safety net and the turbulence and uncertainty in export markets," the letter to lawmakers stated.

The $12 billion package pitched by USDA is appreciated, but it is short-term aid that doesn't deal with systemic problems. "Paying farmers small, one-time, fixed payments is woefully inadequate to keep farmers in business," NFU wrote.

Johnson, in a phone interview, noted the USDA aid seems tied to helping mitigate mid-term election losses. "It's going to be paid out before the election," Johnson said. "That's how this stuff works."

While those checks may prop up farmers short-term, Johnson said farmers in Brazil are already planning to expand acreage next fall to take advantage of the country's export gains.

"We are going to end up with a significantly less price long-term," Johnson said.

Rather than ad-hoc assistance from USDA, it seems that the most reasonable policy solution would be for leaders in the Trump Administration to sit down with Congress and see how to incorporate some changes into the final version farm bill.

"My point is the problem doesn't go away," Johnson said. "USDA can spend $12 billion and it doesn't solve the problem. It seems like it would make a lot more sense to have a public-policy response from Congress as opposed to an ad-hoc response from the administration."

The House and Senate have each passed their own version of a farm bill and leaders from the committees have held initial meetings, but a formal conference has not been scheduled and the Senate has not released the names of its conferees.

"Now it is imperative that Congress provide substantive and long-term relief to farmers," NFU wrote. "The most straightforward relief is to provide the agriculture committees with substantially greater resources to be incorporated into the 2018 farm bill, including the ability to manage farm inventories and to be more responsive to market conditions."

The full letter can be read at https://1yd7z7koz052nb8r33cfxyw5-wpengine.netdna-ssl.com/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

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