Trade conflicts, which have severely disrupted exports and have driven down commodity prices, pose a serious threat to farmers’ balance sheets and the long-term viability of rural communities, Rebecca Dostal, a Tama County Farm Bureau member, told a congressional subcommittee in Washington, D.C., last week.
“Since the retaliatory tariffs have hit, we have seen the price of beans drop below the price of production, hog exports have slowed and any hopes of expanding our operation have evaporated,” Dostal said. “The tariffs have hit us back home in the heartland in a very real way that has had a ripple effect throughout our community.”
Dostal, who raises row crops, hogs and cattle near Traer with her husband and three boys and is a substitute teacher, spoke to the U.S. House Small Business Committee’s Subcommittee on Rural Development, Agriculture, Trade and Entrepreneurship. Dostal was one of several witness testifying on trade issues to the subcommittee, which is chaired by Iowa Rep. Abby Finkenauer.
Dostal urged the lawmakers to work to find a solution to the trade conflicts through trade agreements such as the TransPacific Partnership (TPP), the United States, Mexico and Canada agreement (USMCA) and others. “Trade deals like the TPP, USMCA, a trade agreement with the EU that includes agriculture and a trade deal with China that is fair and predictable, would expand our markets, help American farmers, and sustain our rural communities,” Dostal said. “Protectionist trade policies do not help Americans, it only hurts us in the heartland.”
The trade tariff battle erupted about a year ago between the United States and many major importers of U.S. crops and meats, including China, Mexico and Canada. The Trump administration imposed the tariffs on imports of steel, aluminum and other products it said were unfairly hurting U.S. manufacturers. Importing countries retaliated by imposing tariffs on U.S. exports, especially on U.S. agricultural exports.
The trade battle between the United States and China escalated further, with both sides imposing tariffs on wide range of goods before talks to deescalate the tension began in late 2018. Trump administration trade officials say they are optimistic there will be an agreement with China in the next few months.
Exports, Dostal told the subcommittee, are critical to the future of Iowa farmers and rural communities. “Our way of life deeply depends on foreign consumers and international markets,” she said. “In order for us to operate in Tama County Iowa, we must be able to feed those living in Hong Kong, Mexico City and Cairo, or our farm will not survive.”
With the tariffs helping drive crop and livestock prices below the cost of production, many farmers found that they did not have enough income in 2018 to cover operating loans, Dostal said. Her farm, like many others, was forced to refinance loans using other equipment and possessions as collateral, she said.
The one-time trade assistance payments from the U.S. Department of Agriculture did help offset some of the losses, Dostal said. But farmers would much rather earn their income from the market, she said.
“While we appreciate the assistance, we would much rather be paid a fair price by the market, rather than be paid restitution by the government for the trade war,” Dostal told the committee members.
Going into the 2019 planting season, Dostal said that her farm faces more difficulties from high input costs, low prices and the continued trade war with China.
That’s forcing farmers to find alternative income sources, Dostal said. “This year I am subbing more than ever, to make up for our losses on the farm, but substitute teaching doesn’t supplement my life, ultimately, we are small farmers, and that is what our livelihood depends on.”
Rural communities, Dostal said, have the most to lose in the trade conflicts.
“My ultimate worry is how this impacts Iowa, Tama County and our Community of Traer,” she said. “I see how it impacts our rural schools and our rural community. We are losing rural population; our towns are shrinking, and our community is slowly dying. If you are a small farmer like me, and you can’t make a living in agriculture, you have no option but to leave. I strongly believe in the rural way of life, and with today’s economics, sadly, it may not exist for much longer. We need trade to sustain our farmers, our towns, and our communities.”