(Photo Credit: David Mead via MGN)
Published: January 8, 2020
By: Caleb Greene, LSU Manship School News Service
BATON ROUGE—Louisiana’s soybean farmers, still reeling from tariffs and low prices, experienced a win in December when President Donald Trump announced China had agreed to purchase $40 billion in U.S. agricultural products over the next two years. Skeptics though have found little comfort with the deal and worry about long-term harm to the nation’s farm economy.
The deal, expected to be signed on January 15, will double China’s commitment to American agricultural products and complete phase one of trade negotiations between the two countries. Soybean farmers fear China’s reluctance to honor the deal and the damage caused already by the administration’s protectionist trade policies.
“It’s a warranted concern that extends beyond Iowa’s soybeans,” said Michael Dolch, public affairs director for the Iowa Soybean Farmers Association. “Commitments up to this point haven’t always been held up by China. Commitments are different than assurances.”
Total U.S. soybean exports have declined 29 percent to $16.9 billion in 2019 since a $23.8-billion high in 2017, according to the Agriculture Department. Though China has committed to increasing its agricultural purchases, the phase one agreement will not remove the 25 percent tariff on U.S. soy products, a top concern for soybean farmers.
“It has taken decades to develop these relationships [in China],” said Daryl Nelson, a farmer from Greenfield, Iowa who grows soybeans with his son. “It’s a market that now we’re fearful will go to Brazil. It’s questionable if we’ll ever regain that.”
The decline and ongoing trade war have particularly hurt Louisiana due to the state’s status as an export market. Louisiana’s farmers have received $180 million in federal aid to compensate for losses, 75 percent of which went to soybean growers. Louisiana’s soybean farm value is $800 million, making it the state’s second major agriculture product behind sugarcane.
“Hopefully we get back to the business of old,” said Kyle McCann, assistant to the president at the Louisiana Farm Bureau. “When your No. 1 leaves, we [Louisiana] are impacted a little disproportionately as an export market.”
Read more at KALB.com.