Farmers Caught In Middle of Trade War
While all the talk and media attention about the trade war and tariffs with China seems to have had little affect on most Americans, it has had a huge impact on farmers. Bean prices have plunged more than $2.00 a bushel, corn more than 70 cents. In addition it has had a big impact on milk, beef and pork prices. It seems like agriculture is the only segment of the economy that has seen a negative impact.
President Trump and USDA Secretary Perdue have said some type of help will be provided because farmers seem to be the only sector negatively impacted by the trade war. However, while there has been a lot of talk there has been no proposals about what might be provided. Some sort of direct payment? The USDA buying commodities and storing them to get them off the market?
Direct payments would provide immediate relief to farmers seeming to be fighting the trade war on their own. I was talking with Ag Banker Kent Thiesse from Lake Crystal last week and he had a great idea. Under the current Farm Bill a large percentage of farmers chose the ARC county option because the payments would be much larger the first years of the Farm Bill. Now the last couple years of the Farm Bill payments would be larger if we had chosen the Price Loss Coverage or PLC.
Kent's idea would be just give farmers the option of switching to PLC from ARC County for the 2018 crop year, or even switch for the 2017 crop year that ends August 31st of this year. The payments that would be coming in October of 2018 or even this October could be used to secure current loans. It would be easy for County FSA offices to make the change. All FSA office staff would have to do is change the selection under the current Farm Bill and the payments would be calculated.
The tough part is a bill would have to pass the U.S. House, Senate and be signed into law by President Trump. I suspect it would be difficult to get Republicans and Democrats to agree on a proposal like this. Kent said he has not heard any official proposals yet. What do you think about Kent's idea of letting farmers switch from ARC County to PLC in the current Farm Bill?