In Iowa last week, Sonny Perdue heard from farmers and ag leaders who pressed the U.S. Secretary of Agriculture for a timely resolution of tariff and trade disputes. On Aug. 29, he began his visit with a walking tour of the 2018 Farm Progress Show at Boone, Iowa, talking to exhibitors and farmers. Stopping to speak at a rally for the Renewable Fuel Standard (RFS), Perdue and USDA Undersecretary Bill Northey assured the crowd that it’s important to have a strong RFS and to get the federal government to allow E15 ethanol blends to be sold year-round.
Perdue said he spoke on the phone with President Donald Trump that morning and was told, “We need to get this RFS situation straightened out.” Trump said he wanted something on his desk by next week. Perdue told the farmers he hopes Andrew Wheeler, administrator of the Environmental Protection Agency, complies with the president’s request. Perdue also voiced support for getting EPA to quit giving waivers to petroleum refiners, which allows the refiners to avoid annual blending requirements for ethanol and biodiesel. The RFS requires a certain amount of ethanol and biodiesel to be blended each year into the nation’s motor fuel supply.
How long can farmers withstand the pain?
After he left the Farm Progress Show, other public events with Perdue included a tour of the Land Improvement Contractors Association conservation demonstration farm at Melbourne, in central Iowa. Next was a roundtable discussion at Landus Co-op headquarters in Ames, with Iowa Gov. Kim Reynolds and Lt. Gov. Adam Gregg participating. Perdue also took part in an ag listening session in Atlantic, in western Iowa, with Iowa Congressman David Young.
At the Atlantic meeting, Iowa Corn Growers Association President Curt Mether expressed concern about how long farmers, especially young farmers, can weather the storm of low commodity prices caused by tariffs and trade disagreements between the U.S. and key foreign buyers of U.S. ag products such as China, Mexico and Canada. Perdue assured the group that it’s not President Trump’s intention to get into a long, extended trade war. “While it’s painful to go through this, most farmers support the president’s goal to even out trade policy with our trading partners,” said Perdue.
Weighing in on tariff situation
At the meeting with about 50 Iowa ag industry officials at Landus headquarters in Ames, Perdue coined a new comparison to describe the ongoing trade conflict between the U.S. and China. Regarding the U.S. imposing tariffs on Chinese imports, and China retaliating by imposing tariffs on U.S. exports to China, “I liken it to a good weight loss program,” Perdue said. “You hate going through it and it’s not fun, but you feel better after it is done.”
Perdue’s comment came in response to concerns voiced by Iowa Soybean Association and United Soybean Association director April Hemmes about the impact on U.S. agriculture of a prolonged trade war with China. Responding to Perdue’s analogy, Hemmes said, “I hope good health comes soon.”
Her statement was echoed by other representatives of Iowa commodity groups and the grain and biofuels industry who were gathered for the 90-minute discussion.
Unfair for farmers to shoulder burden
“Holding conversations with farmers in Iowa helps us better understand their opinions, and the impact these trade disruptions are having on their families and communities,” Reynolds told Perdue. “While farmers are leery of negotiations, they see the importance of free trade and open markets. They realize that China has been a bad actor for years and must be held accountable.
“However, we can’t place the burden of every trade dispute on the backs of farmers,” she added. “It’s taking a financial and emotional toll.”
Other speakers also reminded Perdue of the importance of U.S. ag exports to gain access to markets in China, Mexico, Canada and Japan. Iowa ranks first nationally in pork, corn, eggs and renewable fuel production, and second in soybeans. Nearly 20 cents of every dollar in farm income in Iowa is tied to U.S. farm exports. Ag exports also provide one-fourth of our nation’s few positive trade balances, pointed out Iowa Secretary of Agriculture Mike Naig.
Perdue answered by saying, “Trade is what we desire, too. But China has been cheating on trade, and we don’t like to see someone ignore the rules. China has not been playing fair. They have a global strategy to take over important industries in the future. President Trump is committed to not let that happen.”
New USDA financial aid program will help
Speaking at the Farm Progress Show, Perdue acknowledged farmers are feeling financial pain from lower commodity prices due to decreased exports of U.S. ag products tied to ongoing trade disputes with key foreign countries. “These nations in the past have been our prime customers,” noted Perdue. He said the USDA financial aid package for farmers announced Aug. 27 is intended to help relieve some of the economic sting caused by falling soybean, livestock, dairy and grain prices.
“We understand the hurt that’s going on and the unfair burden farmers are enduring,” he added. “We also know fair, free and reciprocal trade relationships will be good for America in the long term.”
Perdue said the administration’s strategy includes:
• putting pressure on China to return to the negotiation table by revising and renewing trade agreements with other key U.S. trading partners such as Mexico, Canada, Japan and the European Union
• alleviating the current economic downturn in agriculture by providing targeted financial assistance to farmers
• initiating discussions and tapping into developing markets such as Indonesia, the Philippines, Thailand and Vietnam to sell more U.S. products there