Acknowledgment." That's a word used by Minnesota Farm Bureau President Kevin Paap after hearing of the $12 billion emergency aid package for farmers caught in the middle of the trade war.
In a written statement, Paap — a fourth-generation farmer — said he appreciates the aid package and that he looks forward to more details. His comments indicate he is pleased the president publicly reacted to growing troubles in farm country.
"The acknowledgment by the administration that the current trade war is exerting significant financial pressure on our farmers and ranchers is reassuring," Paap said.
The aid will focus on soybean farmers, dairy farmers, pork producers and others. Around these parts, there are a lot of producers who face uncertain bottom lines this year as the trade war between the U.S., China and other countries has escalated. The aid will come through direct assistance, a food purchase and distribution program and a trade promotion program. The total dollars available have been calculated to match the estimated $11 billion in economic damage that retaliatory tariffs by countries like China, Mexico and Canada will have on U.S. farmers.
The $12 billion acknowledgment that a problem — and a government-caused problem at that — exists is a good stopgap. Yet it's short-term solution to a problem that could get worse before it gets better.
It's difficult to overstate the importance of agricultural trade to the Midwest. Everyone by now knows the importance of soybeans to the region, but here's another example: Mexican beer is now that country's largest ag export to the United States, and most of that beer is made using barley grown in North Dakota and Montana.
It's easy to understand the president's strategy: Turn up the pressure on foreign markets to erase trading inequities that exist. It probably will take time.
It's that timeline that's concerning. What happens if new markets aren't developed? What must be done for agriculture producers next year if the trade war drags on? What about other industries that will be hurt by the trade war?
The $12 billion package isn't just a gift from the president, but from taxpayers. And the timing — as election battles heat up in farm states — could be conceived as politically motivated.
Ultimately, the aid package is right and necessary, considering the potential troubles that loom over the farms and ranches of middle America. But if the president really wants to help stabilize ag markets, prices and income, the best method is to negotiate an end to the trade war and re-establish traditional Republican free trade ideals.
If winning a trade war was as easy as advertised, taxpayers wouldn't have to fund an expensive program that may only be a temporary fix and that other adversely affected industries have not (yet) received.
For the ag producers who face hardship due to the trade war, we support the aid package presented this week. Long-term, however, this isn't the best option.
It seems the best news last week is the acknowledgment that a crisis may be on the horizon and that it could affect many of the good people who live in ag-producing states such as the Dakotas and Minnesota.