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Shutdown putting farmers in a bind

Many aren’t getting support checks for trade war, can’t seek aid

Published: January 10, 2019, 6:02am
6 Photos
John Boyd, president of the Black Farmer’s Association, checks the condition of a soybean field for harvesting in Baskerville, Va. Below: Boyd is a fourth-generation crop farmer.
John Boyd, president of the Black Farmer’s Association, checks the condition of a soybean field for harvesting in Baskerville, Va. Below: Boyd is a fourth-generation crop farmer. Photo Gallery

BASKERVILLE, Va. — The government check hadn’t arrived, and John Boyd was out of seeds.

So he left his family farm here in southern Virginia on Tuesday and went to the local Farm Service Agency office, a last-ditch attempt to see if any essential personnel with the U.S. Department of Agriculture were still working. He was hoping they could help, even with the partial federal government shutdown stretching to its 19th day.

The Trump administration had promised to help farmers like Boyd, those who suffered as a result of the international trade war after Chinese purchases of soybeans — once 60 percent of the market — plummeted to next to nothing. With farmers on the edge of ruin, the U.S. government offered $12 billion in support since September, checks that had become a lifeline.

But with the government shutdown moving into its third week, Boyd was left waiting for his support check to arrive. Other farmers who still must have their crop totals approved by the government to receive aid were left with no way to apply for it.

The delay has been the latest blow to a soybean farming community of more than 300,000 that has suffered steep price declines and bad weather, leaving some to contemplate switching crops for the coming year — or getting out of farming altogether.

U.S. Agriculture Secretary Sonny Perdue said Tuesday that the government would extend the application deadline for the second round of support payments beyond the Jan. 15 deadline due to the shutdown, while urging Congress to pass a bill President Donald Trump would sign to “end the lapse in funding so that we may again provide full services to our farmers and ranchers.”

At the farm office here, about 15 miles from the North Carolina border, Boyd, 53, a fourth-generation farmer, saw that the lights were on inside. He rattled the door. Nothing. A note outside told the story: The office was closed due to a lapse in federal government funding.

“This shutdown is affecting small people like myself, but if it continues, America is going to feel the impact everywhere — grocery stores, small businesses,” Boyd fumed, angry about the “fiasco” he feels Trump has created. “Right now, I need seed and diesel fuel; I do not need a damn wall. That does not help me in my farming operation.”

Perdue’s statement came as Republican lawmakers on Capitol Hill are coming under increasing pressure to address the impact of the shutdown with no clear resolution in sight. In an address to the nation Tuesday night, Trump reiterated his push for a wall to address what he sees as a humanitarian and security crisis at the southern border, blaming Democrats for the impasse that is causing the shutdown; Democratic leaders retorted with claims that Trump is holding the U.S. government hostage for political purposes, hurting hundreds of thousands of Americans in the process.

‘It gets more serious’

Among them are the farmers at the center of the nation’s agricultural economy. In agricultural states, which tend to lean conservative and have shown strong support for Trump and the GOP in the past two elections, Republican senators expressed concern about the impact of the shutdown on their farmers.

Sen. Charles Grassley, R-Iowa, said he asked the administration to extend the deadline for farmers to certify their crop production and qualify for the bailout funds before Perdue’s Tuesday announcement.

On the other side of the aisle, House Democrats plan to hold a vote this week to fund the Agriculture Department, applying a new round of pressure on Trump to back down from his demands for border wall money as a condition for signing legislation to reopen the government.

Sen. Debbie Stabenow of Michigan, the top Democrat on the Senate Agriculture Committee, said her concerns about the impact of the shutdown on farmers extend beyond bailout payments. Dairy farmers are unable to take advantage of new support in the recently passed farm bill, she said, and USDA crop reports aren’t available for farmers as they make spring planting decisions.

“I think that every single day this continues, it gets more serious for farmers,” Stabenow said.

Driven by demand from China — which uses American soybeans largely to feed livestock — American soybean output skyrocketed in the past two decades, with export totals rising to 30 to 35 metric tons in recent years.

But that plunged when Trump began waging the trade war with China in July.

The administration’s efforts to help tariff-damaged farmers include about $11 billion in direct cash assistance to farmers — the bulk of which would go to soybean producers — as well as $1 billion to purchase excess supply and distribute it to food banks and nutrition programs.

Difficult to plan

About $5.2 billion in checks already have gone out since the program began, including 360,000 payments collectively worth $3 billion since the government shut down, according to Tim Murtaugh, a USDA spokesman. But farmers who did not certify their crop production before the shutdown began cannot do so until the government is running again because the offices of the Farm Service Agency, which is administering the bailout, are closed.

“A lot of these farmers had late harvests, so being able to submit that was a real challenge,” said Mike Steenhoek, executive director of the Soy Transportation Coalition, which works with soybean farmers. “There’s a lot of worry.”

The bailout checks have “made a significant difference” for farmers facing not only the trade war but also lower commodity prices after a bumper year for soybean crops, said Arlan Suderman, chief commodities economist at INTL FCStone Financial, a global financial services firm.

“These are tight times, and they have bills to pay, particularly the closer we get to spring planting time,” Suderman said. “For certain individuals and certain farm areas, it can be very serious.”

The government shutdown also means that several key economic reports and other economic data will be delayed — including measures of how many tons of surplus soybeans are still sitting unshipped in grain storage, for example.

In the Midwest, even as snow blankets many fields, bankers are beginning to evaluate whether to extend another year of credit to farmers.

“They’re being asked to make planting decisions in an informational vacuum,” said Steve Suppan, senior policy analyst at the Institute for Agriculture and Trade Policy. “Unless you’re a very large operator, it’s got to be very difficult right now to do farm management planning with any kind of confidence at all. The shutdown aggravates that.”