Trump's trade war has devastated farmers, Gov. Northam says

The Trump administration’s trade war is hurting profits for Virginia’s soybean farmers, according to Gov. Ralph Northam.

Soybeans have historically been Virginia’s top export to China, but President Trump’s policies have caused a significant decrease in sales. In 2016, China imported $700 million worth of agricultural products from Virginia, but that number has since fallen to $235 million, Northam said during a financial presentation to the Joint Money Committee on Tuesday.

Soybean farmers are bearing the brunt of that decrease, as China only purchased $58 million in soybean products from Virginia farmers in 2018 – down a whopping 83% from 2017, according to U.S. Sens. Tim Kaine and Mark Warner (both D-Virginia). Kaine and Warner have both condemned Trump’s war with China, calling it “haphazard” and saying it “raised taxes on a number of Virginia commodities.” 

As soybean profits have dwindled, farmers across the country have pivoted away from the crop; the total acreage of 2019 soybean production in the U.S. is down by 12.5 million acres from 2018, according to the USDA.

Brazil, previously the world’s second largest soybean exporter, has surpassed the United States to become number one in the world. In response to Trump’s trade war, China has started purchasing more soy from the South American country, even though U.S. soy remains less expensive.

Anticipating the consequences Trump’s trade war would have on farmers, the USDA created a $12 billion relief plan for farmers in July 2018 and dedicated three-quarters of the initial $6.2 billion in payments to soybean farmers. But farmers have complained of bureaucracy and prolonged waits for their payouts, and the trade aid has “overwhelmingly flowed to the largest and most successful farmers,“ according to a recent analysis from the Environmental Working Group, a nonprofit environmental organization.

Through April 2019, Virginia farmers received $44.3 million, but 50% of those funds went to just 10% of recipients. In fact, while the top 20% of payment recipients in Virginia received $62,327 each, the bottom 80% received an average of just $6,477. 

A second round of trade aid for American farmers, totaling as much $16 billion, is expected to be paid out starting this month, but is likely to exacerbate the disparity in what large and small farms receive, according to the EWG. The new round of payments will be connected to the number of acres, not the number of bushels or bales produced, which the EWG says will create a result where “the bigger the farm, the bigger the government check.”

For Virginia’s soybean farmers, the aid may not be enough, at least according to Northam. “They [crops] may very well stay in the fields if they can’t sell,” Northam told the Joint Money Committee. “The farmers would much rather sell at a profit than rely on federal subsidies.”

The Virginia Mercury first reported on Northam’s presentation.