Outside Influences

Farmers Lose Faith in Trump

The risk of a trade war and the administration’s indecision on ethanol have the agriculture community worried.

AP Photo/Seth Perlman
March 6, 2018, 8 p.m.

KANSAS CITY, Mo.—The trust that President Trump has enjoyed from farmers and ranchers has died in one week.

About two-thirds of rural Americans voted for Trump, and his decision to pull back on the Waters of the United States rule and other regulations has thrilled farmers and ranchers.

But indecision about the administration’s position on the future of ethanol at White House meetings last week, followed by the president’s expressions of enthusiasm for a trade war, have destroyed the faith that farmers and ranchers of all political stripes had that he would improve their lives.

“There is just continuing loss of confidence, not in Agriculture Secretary Sonny Perdue, but in the president,” National Farmers Union President Roger Johnson said here on the sidelines of the group’s national convention. Noting the big drop in farm income due to a worldwide glut of commodities, Johnson said, “We need some real strong, positive leadership out of the White House, and we’re not getting it.”

That sentiment is not surprising coming from Johnson, since the Farmers Union leans Democratic.

But American Farm Bureau Federation President Zippy Duvall, who attended the Farmers Union convention to talk about the joint NFU-Farm Bureau project to address the opioid crisis, was also critical—specifically of the president’s announcement that he would impose a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum. “We were saddened to hear him make that announcement,” said Duvall, whose group leans Republican.

In a formal economic analysis headlined “Potential Steel and Aluminum Tariffs Bring Angst to Farm Country,” the Farm Bureau said Agriculture Department trade data shows that, “Overall, 33 percent of U.S. agricultural exports in 2017 went to the top aluminum-producing countries. Even more stark, 39 percent of U.S. agricultural exports in 2017 went to the top steel-producing countries.”

Johnson’s and Duvall’s statements followed Perdue almost getting picketed at the Commodity Classic, the meeting of corn, soybean, wheat, and sorghum growers last week in Anaheim, California. The night before Perdue’s speech, the corn growers wanted to react to rumors that Perdue was supporting a cap on the price of Renewable Identification Numbers, the serial numbers assigned by the Environmental Protection Agency to batches of biofuel to assure biofuels use required under the Renewable Fuel Standard. RINs can be traded on the open market, and the corn growers say that capping the price would make it so cheap for the oil industry to avoid using ethanol that the industry would be destroyed.

Sens. Ted Cruz of Texas and Pat Toomey of Pennsylvania have maintained that the cost of RINs is causing economic stress for independent refiners. In an attempt to force the Trump administration to reduce requirements that the oil industry blend ethanol in gasoline, Cruz placed a hold on the nomination of Iowa Agriculture Secretary Bill Northey to be an Agriculture undersecretary. Before a White House meeting to try to resolve the differences between the ethanol and oil camps, Cruz lifted his hold—an action that pleased the corn growers but also made them nervous because they fear the Trump administration has made a deal with Cruz on ethanol.

Cooler heads prevailed and Perdue wasn’t picketed. In his speech, Perdue claimed he had been the victim of “fake news” and that he and Trump “unequivocally” support ethanol. But Perdue also said he didn’t understand why the corn farmers cared so much about RINs. The corn growers thanked Perdue but still passed a resolution calling on Trump not to change either the RFS or the RINs program.

The next day, while the farmers were still gathered in Anaheim, Trump announced he would impose the tariffs on steel and aluminum. The soybean growers were initially the most terrified because China is by far their biggest market and the Chinese have already said they would retaliate by reducing soybean imports. But all of agriculture world became alarmed about trade retaliation when news articles pointed out that the United States imports more steel and aluminum from Mexico and Canada than from China, and Trump said he would provide relief to Mexico and Canada only if the rewrite of the North American Free Trade Agreement satisfies him.

In an interview Tuesday, Johnson said that the creation of the biofuels industry through federal legislation had pulled agriculture out of the “deep funk” of the 1980s, and that the industry must be maintained. And while the National Farmers Union has long been the farm group most critical of trade agreements and its members want Trump to reduce the trade deficit, exports are also vital. Johnson said he doesn’t understand how Trump, “after deeply offending, excoriating, insulting” trading partners, “can expect they are going to respond in a positive way.”

Perdue’s job, Johnson concluded, is “enormously complicated when what comes out of the White House is unpredictable, inflammatory tweets.”

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