Trade wars, big budget cuts, and a possible deficit from tax reform don’t bode well for U.S. agriculture. Here’s what to watch for in agriculture policy as the Trump administration settles down to work after its first 100 days in office.
While many analysts are focused on matching up President Trump’s campaign rhetoric with what he has accomplished in his first 100 days in office, we are more interested in identifying agricultural issues that we will be watching in the 1,350 or so days that remain in his term.
As compared with international relations, immigration, and national security, we had few 100-day expectations beyond filling the position of Agricultural secretary and some other key appointments in the U.S. Department of Agriculture. With the exception of Franklin Delano Roosevelt, other Presidents have not focused on agriculture in the opening days of their presidency; they did not take office in the midst of an agricultural calamity.
Regarding staffing the upper echelons of the USDA, we hope to see an uptick in the pace of appointments in the next several months. This is particularly critical given the pressure on Congress do deal with the expiration of the 2014 Farm Bill in 2018 and the crisis that is developing as the result of low milk, livestock, and commodity prices.
From where we sit, it is clear that he knows very little about agricultural issues as evidenced by the proposed 21 percent cut in discretionary programs at the USDA. As with other areas of federal policy, we expect that he will find that it is much more complicated than he first thought. We certainly hope so; otherwise agriculture could be left with “slim pickins.”
The one-page description of the tax reform policies the administration announced may result in cheers from those whose estates exceed $10.98 million for a couple and excitement from those who can convert their earned income to corporate income, effectively cutting their earned income tax rate to 15 percent. At the same time, it may blow a hole in the deficit so large that little is left to fund a farm bill.
Without an adequate financial base, writing the 2018 Farm Bill could be more difficult than it was under either Gramm-Rudman-Hollings or sequestration.
While we have criticized those who continue to overpromise the potential of international trade to deliver sustained prosperity to the U.S. agricultural sector, we are not saying that agricultural trade is unimportant. We are concerned about the impact that statements about cancelling trade agreements by the new administration will have on our current agricultural exports as our trade partners look for other suppliers of agricultural products; Brazil, Argentina, New Zealand, and Australia to name a few are more than willing to court any disaffected markets.
Like with threshers, this administration needs to separate the wheat from the chaff as they talk about trade issues and their impact on U.S. farmers and workers.
One issue that has been in the bullseye of the new administration is regulatory reform and the elimination of unnecessary or “job-killing” regulations. While some of the announcements in this area have elicited cheers from many farmers, we would remind everyone that this is a double-edged sword.
The “job-killing” regulations that increase costs for a packing plant or a restaurant may be the same regulations that keeps a child from eating an E. coli contaminated hamburger or a grandparent from eating a contaminated salad at their favorite restaurant.
While an environmental regulation may add costs for chicken farmers on the Chesapeake Bay, a GIPSA (Grain Inspection, Packers and Stockyards Administration) regulation may protect other chicken farmers in a dispute with an integrator.
Delaying the implementation of restaurant menu labeling regulations may strike a blow for regulatory reform and end up imposing costs on the national chains—and thus their consumers—that dot the landscape, and most interstate highway interchanges, and must then deal with state-level regulations that differ from place to place.
At this point we are less concerned with what the administration says than what it does when the shouting is over and the hard work begins.
That means that all of us—agricultural policy analysts, producers, and consumers alike—will need to keep abreast of the myriad of food and agricultural issues that we will be facing over the next 1,350 or so days.
Dr. Harwood D. Schaffer: Adjunct Research Assistant Professor, Sociology Department, University of Tennessee and Director, Agricultural Policy Analysis Center.
Dr. Daryll E. Ray: Emeritus Professor, Institute of Agriculture, University of Tennessee and Retired Director, Agricultural Policy Analysis Center.
This piece is co-published with The Daily Yonder.
