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Former US President Donald Trump | Credits: AP Photo
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No love for Trump: Trade war stings some Iowa farmers

United States: Republican farmers in Iowa say they want Donald Trump as their US president, buoyed by the historic sums of money his administration handed out to farms and despite his talk of trade wars that could tank already stifled US agricultural exports.

A Reuters/Ipsos poll showed Trump is the favorite of 49% of Republicans for the party’s nomination to run against Democratic President Joe Biden in November. Farmers are a politically powerful voting bloc whom Trump has worked to court in the lead-up to Monday’s caucuses in Iowa, a top farm state and site of the party’s first nominating contest. 

Financial Windfall for Farmer

“Twenty-eight billion for the farmers!” Trump yelled at a rally in Clinton, Iowa, on Saturday, referring to federal aid granted by his administration following trade conflicts with China, Mexico, and Canada, which reduced farm exports in 2018 and 2019.

Farmers received unprecedented income under the Trump administration, with over $217 billion in farm payments, including crop support, disaster relief, and aid programs. According to a Reuters analysis of USDA data, this is around $73 billion higher than any other four-year period since 1933.

Challenges in the Farm Economy

Adjusted for inflation, the only time there was higher expenditure on farmers was from 1984 to 1988 when an agricultural crisis driven by land and commodity price bubbles devastated rural America. As the 2024 campaign heats up, the American farm economy remains shaky.

High production and labor expenses, rising interest rates, dropping commodity prices, and reduced direct government support all contributed to a 20% reduction in net farm earnings in 2023, according to the most recent USDA prediction.

Trade War Concerns

Trump, who easily trounced Biden in Iowa in the 2020 presidential election, has hinted that his second four-year term will result in increased trade friction with China and other partners, including the prospect of a 10% universal baseline tariff on most imported goods.

According to data from the US Census Bureau, China did not satisfy its agricultural purchase obligations under a 2020 trade agreement inked with former President Trump, but the prospect of another trade war doesn’t concern supportive Iowa farmers interviewed by Reuters.

“People didn’t love the results of Trump’s trade war, but we knew it had to happen,” said state Representative Bobby Kaufmann, who runs a family farm in Muscatine, Iowa, and advises the Trump campaign on farm issues. “You had trade deals that were lopsided. For decades, American presidents were taken advantage of.”

According to a survey commissioned by trade newspaper Agri-Pulse and released on Wednesday, 39% of 605 farmers intend to vote for Trump, compared to 19% for Republican candidate Ron DeSantis and 8% for Biden.

Derek Wulf, a fifth-generation cattle rancher from Hudson, Iowa, believes the former president is a great advocate despite the trade war.

“He stood up for us. He stood up for agriculture,” said Wulf, who also serves in the state legislature. “We were more than willing to endure that pain (from the trade wars).”

To boost the prospect of trade confrontations, Corn futures on the Chicago Board of Trade fell by the most in a decade in 2023. Grain exports are slowing as record harvests abroad reduce demand for US corn and soybeans.

Trade aid and then some

Farm income had already fallen in 2018 before Trump’s trade fights began. According to USDA data, soybean exports to China had decreased by 74% by the end of the year after the country levied levies of up to 25% on the crop in response to Trump’s tariffs on Chinese commodities.

To offset the hit, the Trump administration distributed almost $23 billion to farmers in 2018 and 2019, according to the Government Accountability Office’s 2022 report.

Iowa received more than $2.4 billion, coming in second only to Illinois, and each farm in the Midwestern state received an average of $42,477, according to the report. More federal monies were spent to purchase commodities from farmers for emergency food programs.

All of that money made farmers whole—and then some. According to a 2021 study conducted by the University of California-Davis, soybean farmers received around $5.4 billion more in aid than they lost due to price impact.

 For some, Trump’s strategy comes at a cost. Some farmers are turning to other candidates, discouraged by the prospect of further trade disruption.

“None of us wants a government check,” said Lance Lillibridge, a farmer in Vinton, Iowa, and former president of the Iowa Corn Growers Association who supports DeSantis and chairs his farmers’ coalition.

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