Farm support holds for Trump, but Biden may find inroads

End to aid payments in 2021 could cut deeply into incomes

The farm sector will be watching the Biden administration's regulatory actions, particularly those related to the environment and climate change. Trump won their support for unwinding rules set by the Obama administration. (Bill Clark/CQ Roll Call file photo)
The farm sector will be watching the Biden administration's regulatory actions, particularly those related to the environment and climate change. Trump won their support for unwinding rules set by the Obama administration. (Bill Clark/CQ Roll Call file photo)
Posted November 19, 2020 at 6:00am

President Donald Trump tenaciously courted farmers and ranchers with an anti-regulatory agenda and a confrontational trade approach that opened some markets.

But he also relied on billions in federal aid to compensate them for retaliatory tariffs and a pandemic that took a deep gouge out of the economy.

Despite the mixed performance, Trump’s policies on trade, regulation and other areas maintained his popularity in rural and farm communities, winning their support in the Nov. 3 election.

Joe Biden nevertheless has a chance to do as president what he didn't manage as a candidate: make inroads by distinguishing his performance from Trump's in ways that are important to a rural constituency. He could, for example, give robust government backing to biofuels, an area where Trump waffled. Biden could deliver some agriculture sales abroad, reversing setbacks that followed Trump's trade wars and the economic slowdown from the pandemic.

More treacherous for Biden may be regulation, especially on the environment and climate change, issues that are important for his Democratic Party but also ones in which solutions could be disruptive to agriculture. Trump repealed the Obama administration’s 2015 regulation known as Waters of the United States, which expanded federal review of waters. The Obama rule sparked opposition from the American Farm Bureau Federation, which said it would allow the EPA to interfere with how farmers use their land.

Farmers and ranchers are waiting to see Biden's regulatory agenda in the Agriculture Department, the EPA and the Interior Department.

Trump enjoyed a close relationship with farmers. He spoke to thousands of cheering members of the Farm Bureau at the organization’s annual January convention in 2018, 2019 and 2020. That attention helped Trump get praise and support for coming to agriculture's aid even when his policies created the need for the aid.

“President-elect Biden will set himself up well if he takes a chapter out of that playbook of giving attention to farmers while also creating a steady hand to bring some stability back to the markets, bringing some clarity of direction on climate change and farmers’ role in that,” National Farmers Union president Rob Larew said.

Larew said a Biden administration should engage swaths of agriculture — conventional, organic, small, large, specialty crop growers, livestock producers — as it develops policies.

“What is critical for the White House is that farmers have a key role. There are lots of different styles of agriculture that need to be part of the dialogue,” Larew said.

Government aid

After a boom year in 2013, key segments of agriculture had endured several years of low or flat market prices by the time Trump entered the White House in 2017. What followed was a new North American trade pact that widened the market for U.S. products, but also trade wars that brought retaliatory duties from trading partners. And in 2020 the COVID-19 pandemic hit, temporarily closing slaughterhouses and forcing producers to euthanize their animals.

But infusions of federal funds steadied farm incomes. The Trump administration made $23 billion in ad hoc trade aid payments to farmers, the bulk of them in 2018 and 2019. And the Economic Research Service projected in September that 40 percent of net farm income in the 2020 calendar year would come from COVID-19 relief from the government, such as $5.8 billion from the Small Business Administration's Paycheck Protection Program and an expected $16 billion in direct farm payments from the USDA.

To farm state lawmakers such as Sen. Charles E. Grassley, R-Iowa, the payments compensated for injury from a tough-on-China policy. Grassley said it reinforced the Trump message that agriculture mattered.

“I don’t have any doubt that [Trump's] the best for farmers because I’ve never seen another president back the farmers when the government has screwed them,” Grassley said. He contrasted Trump with presidents Richard Nixon, Gerald Ford and Jimmy Carter, who he said had not provided compensation when policies hurt the sector.

Or as former Sen. Heidi Heitkamp, D-N.D., put it in a phone interview: “He created the problem, then threw money at the problem. I think providing billions of dollars in direct payments is simply treating the symptoms without basically moving rural America forward.”

That aid poses a risk for Biden. The big funding infusions leave agriculture vulnerable to a 50 percent decline in government payments in 2021 if COVID-19 aid ends and exports haven't rebounded, according to a University of Missouri report in September. That could be a $16 billion hit to net farm income, it said.

Heitkamp, a co-founder of the One Country Project and One Country Fund Political Action Committee to elect Democrats in rural areas, said Biden needs to move quickly on his plans for agriculture and rural areas. Rumored to be a candidate for Agriculture secretary, Heitkamp said the incoming president should include farm and rural issues in his first State of the Union address.

She said the administration has “an incredible opportunity” to increase manufacturing in rural areas and to boost biofuel use, build on agriculture’s role in sequestering carbon emissions in soil and to create revenue opportunities for farmers in renewable energy production. She also said Biden should expand agriculture markets beyond China and develop a "holistic approach to rural communities and just agriculture" with health care, education and small-business policies.

Biden's trade fate may depend on China. After mutual rounds of tariffs on the other's products, the U.S. and China agreed to a deal at the end of 2019 that included Beijing's two-year commitment to buy a total of $200 billion in agriculture, energy, manufactured goods and services. China made record purchases of soybeans, wheat and pork, but is still on course to fall short of its pledge on farm goods.

In voters' eyes, Biden may shoulder responsibility for China following through on the pledge for more purchases.

“It’s been a roller coaster,” said Dale Moore, Farm Bureau executive vice president. "But the upshot is that trade is so important to agriculture because of our ability to produce. We celebrate what progress we have made and we would like to encourage the incoming administration and Congress to keep attention focused on making progress on trade, trade negotiations, trade dispute resolutions, those kinds of issues that are important to all of us.”

Moore said Farm Bureau members felt that Trump responded to concerns about trade barriers and regulations.

“It’s unusual for farmers to have a seat at the table like we had, not only at [the] Agriculture and Interior [departments], but also at the Environmental Protection Agency. We haven’t won every argument we tried to make, but there certainly is that feeling that we are being listened to as partners and not regulated entities,” Moore said.

Ethanol

Biden could give unequivocal support to the ethanol industry, which uses about 40 percent of U.S. corn production. Trump allowed the sale of a 15 percent ethanol-85 percent gasoline blend year round, a move that corn farmers liked, but he also kept granting waivers to oil refiners, freeing them of the obligation to use ethanol.

Larew said a Biden administration needs to avoid the mixed messaging on ethanol and other biofuels.

“It’s one thing to hear 'I love ethanol' and 'I love corn farmers and everything you’re doing,' but that's not always translating out,” Larew said, referring to the Trump administration. “Biden during the campaign tried to play off of that and talked about not only his support for ethanol, but ways to be more consistent for increasing demand and for increasing access to all levels of ethanol.”

Farmers will be waiting to see what that means, Larew said.