​DEAR CHAIRMAN THOMPSON, RANKING MEMBER CRAIG, CHAIRMAN BOOZMAN, AND RANKING MEMBER KLOBUCHAR,

 

We are writing today to express our significant concerns about the state of America's farm economy and the harmful and compounding effect that Administration policies are having on our farmers and on the long-term competitiveness of U.S. agriculture. We are also writing to thank each of your efforts to advance a farm bill and farm labor legislation, your success in securing increases in agriculture conservation funding, and for your on-going efforts to secure additional financial aid for farmers.

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We write as a group of bipartisan former leaders of American agricultural commodity and biofuels associations, farm leaders, and former USDA officials. We have spent our entire careers working to build U.S. agriculture and are dismayed at the damage that is being done to American farmers.

Farmer bankruptcies have doubled, barely half of all farms will be profitable this year, and the U.S. is running a historic agriculture trade deficit. These metrics reflect a sharp reversal from record farm export surpluses and farm incomes experienced just a few years ago.

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There are few tragedies greater than the loss of a family farm, representing not just a loss of livelihood but a loss of a way of life for rural families. And when American farmers suffer, the entire rural economy is impacted – from schools, to churches, to main street businesses. We need to honestly acknowledge these impacts to rural America and engage in serious deliberations with the farm community to develop real, long-term solutions.

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The reasons for the dramatic turnaround are complex, but it is clear that the current Administration's actions, along with Congressional inaction, have increased costs for farm inputs, disrupted overseas and domestic markets, denied agriculture its reliable labor pool, and defunded critical ag research and staffing. And these impacts are not happening in a vacuum. At the same time that farm country is reeling from these blows to agriculture, rural health care cuts are threatening a vital safety net for America's farm families. Congress needs to assert itself on behalf of farmers if we are to avoid a widespread collapse of American agriculture and our rural communities.

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Increased Cost of Farm Inputs

We respect the desire to enhance American manufacturing and acknowledge that in some targeted circumstances tariffs can be an effective tool to protect America's national security interests. Unfortunately, the indiscriminate and haphazard nature of the current tariff policies have not revitalized American manufacturing and have significantly damaged American farm economy.

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By placing tariffs on farm inputs -- from fertilizer, to farm chemicals, to machinery parts -- the Administration's tariffs have increased prices for farm inputs and have pushed the cost of production well above commodity prices. While we applaud the recent decision to exempt fertilizer imports from tariffs, we question why the government was ever placing tariffs on fertilizer and ask why the Administration has not moved to remove tariffs on all farm inputs. It makes no sense to drive up farm input costs, taking money out of the pockets of America's farmers.

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Loss of Market Access

This Administration's trade policies and lack of Congressional action have also hurt American farmers by reducing our global competitiveness, disrupting export markets, and reducing commodity prices. One of the current President's first actions when elected in 2016 was to pull the United States out of the Trans-Pacific Partnership (TPP) – a twelve-nation free trade agreement strongly supported by America's farmers. The American Farm Bureau estimated that this agreement would have boosted farm exports by $4.4 billion per year. Farmers at the time were willing to accept that loss of those export benefits, assuming that it would be more than offset by new bilateral trade deals with other countries. Unfortunately, that hope has not been realized.

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Consider the impact of the China trade war on soybeans alone – in 2018, when the China tariffs were initially imposed, whole U.S. soybean exports represented 47% of the world market. Today, whole U.S. soybeans represent just 24.4% – a 50% reduction in market share. Meanwhile, Brazil's share of the world export market grew by more than 20%. Put another way, during the same period, harvested acres of soybeans produced in Brazil grew from 83.0 million to 119 million, while soybean acreage in the U.S. fell by more than 7.0 million acres.

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Other U.S. commodities have suffered similar losses. Brazil has been the big winner in these trade wars, allowing it to become the world's dominant ag exporter, now the top exporter in soybeans, cotton, beef, and chicken. But other countries, including Argentina and Australia, have stepped into this vacuum as well. Any farmer will tell you, once lost, it is extremely difficult to win markets back. The U.S. is simply no longer viewed as a reliable supplier.

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The one significant bright spot for trade during the current President's first term in office was the successful negotiation and passage of the U.S.-Mexico-Canada Agreement (USMCA) in 2018-2019. This agreement passed Congress with historic bipartisan support and stabilized trade with two of America's largest ag export markets and has provided significant economic benefits to our corn, pork, poultry, and dairy producers. Unfortunately, recent comments by representatives of the Administration have cast into doubt the future of the USMCA and whether it will be renewed after this review period.

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Weakening of International Trade Partnerships

Bellicose rhetoric and chaotic trade policies have caused our traditional trading partners to question the reliability of the U.S. as a trading partner and to turn to other countries to stabilize international trade. The BRICS coalition (Brazil, Russia, India, China, and South Africa), is dramatically expanding its share of world ag markets, and may well be the single largest threat to American agriculture. Just this year, the EU has announced the creation of a major free trade bloc with the Mercosur countries (Brazil, Argentina, Uruguay and Paraguay) while last month Canada announced a new trade agreement with China.

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While the Administration has announced a number of mini-deals and purchases agreements, many of which contain beneficial provisions for U.S. agriculture, these pale in comparison to the markets we are losing and pale in comparison to the enforceable long-term trade deals other countries are securing. We would note that the previous Administration also failed to secure any new free trade agreements during their four years in office. Still, two wrongs do not make a right – we must turn this situation around if we are to continue to have a strong agriculture sector in the coming decades.

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Cuts to Foreign and Domestic Food Aid

Even as the Administration has disrupted our overseas export markets, cuts to foreign aid and domestic food programs are negatively impacting important domestic and overseas markets for many U.S. commodities, including rice, wheat, and peanuts, undermining U.S. foreign policy, and exacerbating food insecurity here and abroad.

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Failure to Adequately Support Biofuels

Arguably the most important value-added market for farmers over the past 20 years has been the emergence of ethanol and biodiesel as viable competition to petroleum. But that growth has stalled in the face of unnecessary restrictions on blend levels that Congress seems unwilling or unable to address, leaving ethanol markets moribund. The needless limitations on blend levels have discouraged expansion of the Renewable Fuel Standard - a ground-breaking policy designed to maximize the use of biofuels. More aggressive RFS volumes have been proposed, but EPA must finalize the rule, put an end to needless refinery exemptions from the program, and look to grow RFS volumes in the future. The recent failure of Congress to include E15 legislation in the appropriations legislation is just one more sign that congressional leadership does not fully grasp the depth of the current farm crisis. Meanwhile, biofuel export markets have been handicapped by specious non-tariff barriers. The Administration has challenged Brazil and China's ethanol import policies, but numerous other countries have been similarly shuttered to U.S. biofuel exports, limiting market growth.

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Disruptions to Farm Labor

Securing the border and discouraging illegal immigration should clearly be a national priority. But mass deportations, removal of protected status, and failure to reform the H-2A visa program is wreaking havoc with dairy, fruit and produce, and meat processing. Those disruptions are causing food to go to waste and driving up food costs for consumers. These disruptions are also financially squeezing food and agriculture businesses and sowing the seeds of division in rural communities. Farmers need these workers.

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Cuts to USDA Staffing and Ag Research

The massive and indiscriminate firings of USDA employees is impacting the ability of farmers to effectively and efficiently access important USDA services. Farmers can't get payments in a timely fashion or the assistance they previously received. Moreover, dramatic reductions in USDA research and funds to land grant colleges are causing additional hardships and threatening the long-term competitiveness of U.S. agriculture. The cuts to research are particularly troublesome given the need to develop value-added markets or the next "new molecule" with potentially grave consequences over the long-term.

As advocates for farmers and agribusiness with decades of experience, we know that farmers don't want government handouts - they want markets. They want world-class research so that they can compete. They want their families and communities to have affordable health care services.

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The policies of this Administration have caused tremendous harm to U.S. agriculture. But it is not too late to turn this around. We ask that Congress take the following actions to begin restoring America's farm economy to a stable, dependable footing:

1. Immediately exempt all farm inputs from tariffs;

2. Repeal tariffs that are disrupting agriculture export markets;

3. Pass Trade Promotion Authority to enable the Administration to pursue and secure meaningful enforceable free trade agreements that can be passed by Congress and have the full force and effect of law

4. Direct the Administration to prioritize the negotiation of binding trade agreements with countries that need our agricultural products and that can help offset other market disruptions

5. Encourage the Administration to expeditiously complete the review of the U.S.-Mexico Canada Agreement favorably resolve the pending dairy dispute settlement case with Canada and ensure that the USMCA is extended for the next sixteen years

6. Pass legislation to enable nationwide E15 year round ethanol and sustainable aviation fuel to boost domestic markets for U.S. corn and soybeans

7. Pass new farm bill

8. Pass farm labor reform including reform to the 2A program and

9. Restore funding for land grant agriculture research critical USDA staffing and domestic and international food aid programs

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We urge your committees to hold hearings and urge individual members of congress state departments of agriculture and state and national agriculture associations to also convene meetings with farmers to discuss challenges that they are facing gather input on additional policy solutions and build momentum to address the farm crisis At the same time we will work with farmers and their organizations to create local opportunities for candid discussions to discuss the problems producers are dealing with on their farms and in their communities and to solicit their ideas on new and effective solutions Hearing directly from farmers about the state of the farm economy the causes of our current farm crisis and the policy changes that are needed is critical first step in restoring the short term economic health and long term competitiveness of U.S. agriculture