FARM AND FOOD FILE
The knuckle-cracking cold that accompanied most of the country out of 2017 also followed most of us into 2018. Worse, it didn’t come alone. Much of last year’s bad mojo-the crazy weather, its bitter politics, policy gridlock-also crossed December’s ice bridge into the new year.
For example, President Donald Trump’s closed-fist trade negotiating style reappeared Jan. 8 in a much-anticipated speech to the American Farm Bureau Federation (AFBF). Despite AFBF’s year-long call for a pro-trade/pro-North America Free Trade Agreement (NAFTA) statement from the White House, neither the President nor his ag chief, Sonny Perdue, offered their strident rural supporters anything more than their usual “Don’t-call-us, we’ll-call-you” rhetoric.
Trump did reassure the MAGA-gaga crowd that he was “working very hard to get a better deal” than today’s NAFTA, an agreement, incidentally, that currently includes U.S. farmers and ranchers selling Mexico and Canada at least $40 billion of ag goods every year since 2011.
But, the President warned, “When Mexico is making all that money, when Canada is making all that money, it’s not the easiest negotiation.”
All what money?
The President didn’t explain but he likely was referring to the overall 2016 U.S. trade deficit with our NAFTA partners (Canada: $11 billion, Mexico: $63 billion) despite our hefty ag trade surplus. While the NAFTA trade deficit, $74 billion in total, isn’t tiny, it’s a pittance compared to the 2016 U.S. trade deficit to China, a fat $347 billion.
It’s also something that’s not going away unless Trump orders the U.S. out of NAFTA. In fact, that might be the reason he made his dark, vague “all that money” remark at the biggest Big Ag gathering of the year: With just a nod of his furrowed, furry brow, he-and you-could kiss your NAFTA good-bye.
That might also put a very different meaning on another of the President’s AFBF’s remarks Jan. 8: “Oh, are you happy you voted for me. You are so lucky that I gave you that privilege.”
Another piece of bad mojo, the hastily passed 2017 tax overhaul, also followed farmers into January. A highly-detailed, well-sourced story in the Jan. 9 Wall Street Journal explains how the less than one-month-old law contains a loophole that allows farmers to dodge virtually all federal income taxes if they sell their crops through -wait for it-their farmer-owned cooperatives.
While the loophole was unintended, reports the Journal, it also is perfectly legal under the tax bill through-wait for it-2025.
Unfair? Sure, replies the Journal story in a quote attributed to an accountant, “(B)ut fair and the tax code don’t necessarily go together.”
Especially when Congress writes and passes a massive tax overhaul in less time than most farmers spend harvesting their now tax-free crops.
More troubling than even today’s troubling ag politics, however, is 2018’s even wider, bulldozed path in making America an even greater farm and food monoculture. The latest evidence is wheat; as a nation, we are quickly leaving the global wheat game.
For example, USDA data currently estimates that American farmers will grow 22.3 million acres of winter wheat this year, a drop of 1 million acres from a year ago.
Worse, the anticipated decline means winter wheat acres will be down a massive 8 million acres in just over four years and a staggering 15 million acres-or 32 percent-in the last decade alone.
Overall, “U.S. wheat planted area for 2017/18”-which includes all winter and spring plantings-“is projected at 46 million acres, a record low,” USDA noted last August. (New estimates will be released Jan. 12.)
The reasons behind the decline, USDA explains, are “lower relative returns, changes in government programs and increased competition in global wheat markets.”
Changes in government programs? This year would be a good time to examine those changes-as well as those in trade and tax policy-to ensure all are working for every American and not just a few farmers and even fewer politicians.
The Farm and Food File is published weekly through the U.S. and Canada. Past columns, events and contact information are posted at www.farmandfoodfile.com.
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