Maybe it’s not the GOP, but the Trump administration whose proposals on tax reform, trade, immigration and regulation are causing me to wonder, what’s up with the GOP and Farmers.? The latest attack on farmers occurred on May 17th, when the House Freedom Caucus defeated the farm bill. The reason given by the Freedom Caucus was its desire for a vote on a strict immigration law, and, apparently, there was concern that Speaker Ryan would be unable to deliver on the promise, of a vote, if they voted for the farm bill.
In the background lurks a discharge petition, sponsored by a group of Republicans who come from districts with large immigrant populations, and who recognize the need for immigration reform, to aid their constituents and bolster their own re-election prospects. The Freedom Caucus is not likely to be very happy with this development which is five signatures short of succeeding as of May 30th, as it would likely eliminate their leverage on the farm bill. The result of a successful discharge petition would be to bring to the floor four immigration bills, all of which create a more rational and fair immigration policy than exists today or that the Freedom cCaucus proposes, and the one getting the most votes being deemed passed by the House. This petition will need a total of twenty-five Republicans as all Democrats have signed on.
The Freedom Caucus’ Immigration Bill is likely to injure farmers even more by limiting their access to labor. And as you might guess, the vast majority of the Freedom Caucus members do not come from farm districts.
The GOP tax bill does far less for family farms than for large corporate farms. Our communities are heavily populated with small family farms, not the mega-corporate farms that exist in the mid-west and far-west. In the main, our farms are sole proprietorships, partnerships and LLCs, all of which are passed through entities. Under the GOP past tax legislation, a corporation will pay tax at a rate of 21% while pass-through entities will pay approximately 30%, even after the 20% reduction provided for in the new tax law. Thus, small family farms will pay 9% more than a corporation.
Aside from the new tax law, the farm bill and immigration circus, other actions by the Trump administration raised questions about its support for small farms and the AG community generally. On May 20, 2018, the Trump administration suspended its plan to impose sweeping tariffs on China as trade talks continue. But wait, on May 29th, the administration announced that $50 billion of those tariffs were going to be imposed in a few days. The war is back on, or as Mr. Nevarro announced on NPR recently, it is not a war, but a dispute. I wonder how the Chinese would describe it. The Trump administration is in a virtually impossible position going forward with the Chinese, the on-again, off-again approach, and the lack of clarity in terms of trade policy, all leave the Chinese wondering exactly what the Trump administration is up to. The Chinese have made vague statements about the amount of new trade they will engage in with the United States when the war was cancelled, which was in the range of $150 billion to $200 billion per year, later reduced to about $50 billion, but with no specific commitments. More importantly, the Chinese have made no commitments whatsoever to reduce or eliminate the tariffs that they have placed on 128 AG products, including pork, wine, fruit, soybeans and ethanol, which will see a 15% increase. The Chinese in response to the May 29th, announcement indicated that they would likely go ahead with retaliatory tariffs which most likely will focus on AG products. On May 31st, the administration announced tariffs on steel and aluminum would be imposed on Canada, Mexico, the EU and China. Most of whom those countries responded that they would retaliate with a focus on AG products.
Let’s focus on NAFTA for a moment. Corn purchased by Mexico in 2017 was $2.5 billion, which makes Mexico the largest corn export market for the US in the world. California exported $2.3 billion of lumber, berries, and vegetables, primarily to Mexico. Farmers’ warnings about tearing up NAFTA have been largely ignored. The imposition of the steel and aluminum tariffs can’t possibly help Tthe NAFTA negotiations.
In another twist, the Trump administration decided to terminate an Obama era rule to aid livestock farmers in fighting meat industry abuses. Chicken farmers in West Virginia, the National Sustainable Agricultural Coalition, and the Rural Advancement Foundation International – USA are all surprised that the Trump administration is walking away from small farmers, as they want this regulation to protect them against the meat industry.
In our region, little, if anything, has been done to assist dairy farmers with low milk prices.
The actions and attitude of the Trump administration toward the AG community simply baffles me. I wonder where our farmers stand?
Mr. Owens is a former member of Congress representing the New York 21st, a partner in Stafford Owens in Plattsburgh, NY and a Senior Advisor to Dentons to Washington, DC.
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