Farmers face economic hardship, overproduction as tariffs close foreign markets
Agricultural supply continues to grow as demand shrinks, causing Gov. Tony Evers to write a letter to President Donald Trump urging him to stop initiating trade wars.Image By: Will Cioci
Darin Von Ruden, President of the Wisconsin Farmers Union, anticipates the closure of at least 650 Wisconsin farms in this upcoming year.
He, like many others, attributes this to a flawed supply management system and a lack of revenue in the marketplace, which has led to overproduction.
In light of recent trade wars and federally imposed tariffs, foreign markets have shrunk even more significantly — a growing anxiety for farmers in the number two dairy production state and across the nation.
However, President Donald Trump maintains that recent tariffs put forward to block Chinese trade are working as planned and supporting their system by devaluing Chinese currency. He believes that this economic tactic will influence them to “pour” more money back into American farmers and markets alike afterwards.
“As usual, China said they were going to be buying “big” from our great American Farmers,” President Trump tweeted Aug. 13. “So far they have not done what they said. Maybe this will be different!”
Some believe the likelihood of getting back into the markets closed from tariffs will be slimmer than Trump is making it seem.
Wisconsin Department of Agriculture, Trade and Consumer Protection Secretary-designee Brad Pfaff believes we may be tainting our foreign partnerships.
“Trade relationships take time and energy to build and maintain, and we can’t just turn those markets on and off,” Pfaff’s communications director Grace Colás stated.
Von Ruden supported this claim, building on the idea through the metaphor of buying a car. With America being the dealership and China the consumer, he believes they may look to find another dealer — like Australia — leaving us without business.
“If you buy a lemon, do you go back to that same dealership and buy another car just like that one, or do you go with that other dealership because you do not want to buy another lemon,” Von Ruden asked. “Right now the Chinese market is saying that [America is] a bad actor –– why would we want to do business with you?”
Gov. Tony Evers addressed concerns regarding the impacts of this issue on Wisconsin agriculture in a letter to Trump on Aug. 12, stating that farmers want trade more than government aid payments.
“One Tweet can harm thousands of Wisconsin citizens who make their living in our agricultural industry,” Evers wrote. “They deserve better than short-sighted trade wars that do lasting damage to their businesses and their heritage.”
Von Ruden claims that tariff wars further exacerbate overproduction problems caused initially by the structure of farm bills and our supply management system.
“We figured out a way to pay farmers for excess products to make sure that they have a profit, so they are better off just planting every single acre that they possibly can because there’s a guaranteed profit,” Von Ruden explained.
Von Ruden calls on the federal government to address this issue, noting that this system causes Americans to exploit natural resources for products and food that are not consumed on top of a market that shrinks by trade war.
“We should be bringing supply and demand of balance instead of an over supply and adding extra stress on farmers and the environment,” Von Ruden stated.
The Trump administration will be paying about $14.5 billion in subsidies to farmers hurt by the trade wars by the end of August, according to CNN reports.Subscribe to The Daily Cardinal Newsletter