The Farm Bill should be good news for farmers, covering, as it usually does, subsidies for them and, through the food stamps programme, for the poor. The previous bill included direct subsidies for farmers to the tune of $7bn a year, a land-conservation programme costing some $5bn and crop insurance, which comes at a price tag of up to $8bn. In the past, a deal between Republicans and Democrats has ensured that both farmers and poor people got their cash. But the farmers are worried, this time round, that Republicans are more determined to cut welfare and less concerned to protect farmers than they used to be. Not long ago, Mr Trump suggested cutting crop insurance by a third. Michael Conway, the congressman who submitted the bill, did not include the suggestion in his draft, but conservative groups such as the Heritage Foundation have lambasted the bill for, in their view, doing nothing to cut wasteful subsidy programmes. It will be bitterly debated over the coming months.
But trade is the farmers’ biggest worry. Mr Trump has pulled out of the Trans-Pacific Partnership (TPP), a colossal trade agreement between 12 Pacific Rim countries, threatened to leave the North American Free-Trade Agreement and slapped tariffs on imports of steel (25%) and aluminium (10%). All those moves are problematic for agriculture. Mr Tosh says that he has already been hit by the steel and aluminium tariffs. He is planning to increase his herd of pigs from 750,000 to 950,000 and the costs of the new barns needed have gone through the roof thanks to the higher price of rebar, a steel rod for reinforcing concrete. He expects to be hit even harder by the 25% tariff on American pork imposed by the Chinese government on April 2nd in retaliation for Mr Trump’s tariffs.
China is the third-largest market for American pigs and the biggest market for variety meats (pig feet, livers and hearts), which most Americans do not eat. Last year America sold China 496,000 tonnes of pork worth $1.1bn, or 20% of total pork exports. Farmers expect to lose most if not all of this business. Domestic prices are, as a result, expected to fall by $6-8 per pig. In Mr Tosh’s case this will translate into a loss of up to $6m a year.
Soyabean farmers stand to lose even more than their peers farming livestock or other crops. One-quarter of their production is exported to China. With prices of soyabeans languishing at $10 a bushel (compared with $17 in 2013) they cannot afford to lose their biggest export market to Brazil and Argentina.
