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Harvest Public Media is a reporting collaboration focused on issues of food, fuel and field. Based at KCUR in Kansas City, Harvest covers these agriculture-related topics through an expanding network of reporters and partner stations throughout the Midwest.Most Harvest Public Media stories begin with radio- regular reports are aired on member stations in the Midwest. But Harvest also explores issues through online analyses, television documentaries and features, podcasts, photography, video, blogs and social networking. They are committed to the highest journalistic standards. Click here to read their ethics standards.Harvest Public Media was launched in 2010 with the support of a grant from the Corporation for Public Broadcasting. Today, the collaboration is supported by CPB, the partner stations, and contributions from underwriters and individuals.Tri States Public Radio is an associate partner of Harvest Public Media. You can play an important role in helping Harvest Public Media and Tri States Public Radio improve our coverage of food, field and fuel issues by joining the Harvest Network. Learn more here.

Depression-Era Federal Program May Come To Farmers’ Rescue As Trade War Continues

Kansas farmer Glenn Brukow has reason to expect a good corn and soybean crop this year, but he's concerned about an intensifying trade war.
Frank Morris
Harvest Public Media
Kansas farmer Glenn Brukow has reason to expect a good corn and soybean crop this year, but he's concerned about an intensifying trade war.

The corn and soybeans growing in Glenn Brunkow’s fields in the rolling Flint Hills north of Wamego, Kansas, got some much needed rain recently and look healthy.

Brunkow has reason to expect a good harvest, but the way things are looking globally, he’ll lose money on the crop. Trade disputes with China, Mexico and Canada threaten to slash U.S. food exports by billions. About half the soybean crop goes overseas, most of that to China — and since mid-April, soybean prices have plunged about 20 percent and corn about 15 percent.

“Prices are really bad,” Brunkow said, squinting in the sun. “We’re looking at some of the lowest prices we’ve had in quite a while, a decade or more.”

For Harvest Public Media, Frank Morris explains which federal program may help farmers affected by a trade war.

President Donald Trump enjoyed broad support from farmers, and he has promised to protect them from trade war fallout, though how the administration would do that isn’t exactly clear. There’s a possibility, however, that a Depression-era federal program could become a focal point.

‘This could be catastrophic’

Free trade is a fragile, but lucrative system for farmers. Case in point: Brunkow said that if China puts new tariffs on soybeans and other row crops, some farms will fail.

“This could be catastrophic,” Brunkow predicted. “We see a lot of producers not make it through past this fall.”

The federal government shores up farmers in lots of ways, as taxpayers subsidize crop insurance and other programs designed to compensate for natural disasters or falling prices. But the farm safety net won’t protect farmers from a trade war, Iowa State agricultural economist Chad Hart said.

He thinks the Trump administration will dust off an old model for boosting prices, one that generated headlines —and punchlines —in the 1970s.

“The government cheese program,” Hart said, explaining further, “Dairy prices were very low. The government was trying to support dairy farmers. The way they did that by purchasing milk. They did it through this Commodity Credit Corporation. “ 

The Commodity Credit Corporation Charter Act came out of the Depression, and since 1939 has given the U.S. Department of Agriculture authority to borrow money from the U.S. Treasury to buy commodities or otherwise help farmers cope with low prices.

It’s never gone away, but Hart thinks the Trump administration is about to ramp it up.

“This is a relatively old program that If sits in the shadows until it’s needed, for something like this,” he said, adding that the CCC can issue bonds to borrow up to about $30 billion.

It’s not clear whether the USDA would use it to buy up farm commodities or find a way to pay farmers directly, according to Joe Glauber, a senior research fellow with the International Food Policy Research Institute. Either way, he said, taxpayers would be on the hook.

“As a consumer, I’m going to have to pay higher prices as a result of this, and higher taxes, because of a bail out through the CCC Charter Act,” said Glauber, who was also chief economist at the USDA under President Barack Obama.

Trade disputes are already costing America’s hog farmers hundreds of millions of dollars in sales, but commercial crop farmers aren’t really feeling it yet because they’re not selling their grain yet.

If trade barriers persist through harvest and then into next year, Glauber said the pain will be very real.

“I think U.S. agriculture has a much, much bigger problem, if you lose a big share of these markets, just because of a trade war that spirals out of control for a while,” he said.

Brunkow said he worries about the very same thing: long-term damage to vital trading relationships that’ll depress commodity prices, hurt farmers and make taxpayers pay up.

Frank Morris is an NPR correspondent based at KCUR 89.3 in Kansas City, Missouri. You can reach him on Twitter @FrankNewsman

Copyright 2018 Harvest Public Media

Frank Morris has supervised the reporters in KCUR's newsroom since 1999. In addition to his managerial duties, Morris files regularly with National Public Radio. He’s covered everything from tornadoes to tax law for the network, in stories spanning eight states. His work has won dozens of awards, including four national Public Radio News Directors awards (PRNDIs) and several regional Edward R. Murrow awards. In 2012 he was honored to be named "Journalist of the Year" by the Heart of America Press Club.