Tennessee's soybean farmers favor free market over Trump's aid

Jamie McGee | The Tennessean

For some Tennessee farmers, the $12 billion in aid announced Tuesday by the Trump administration brings some financial relief — but not in the way they would prefer to make ends meet.

"It will be some relief, but it’s a mixed bag," said Parks Wells, executive director of the Tennessee Soybean Promotion Council in Dyer County. "We hate to lose the free markets. Farmers thrive on that, not government support. We've lost this market because of the policy situation."

Trump: 'The era of global freeloading' is over President Trump says the era of "global freeloading" is over. He told rallygoers in Fargo, North Dakota, that his tariff standoff with China, the European Union and Canada is aimed at fixing his predecessors' "disastrous trade deals." (June 28)

As China and Europe have retaliated against steel and aluminum tariffs levied by President Donald Trump with their own tariffs on U.S. goods, farmers have taken a hit. Tennessee soybean farmers have seen purchases from China stall, exacerbating the financial pressure from a five-year slump in farm income.

The Trump administration has been working for months on a plan to shore up slipping prices for soybeans, pork and other crops hit with retaliatory tariffs from China amid concerns from farm groups and Republicans on Capitol Hill.

In announcing the program options for farmers Tuesday, U.S. Secretary of Agriculture Sonny Perdue said the short-term financial support would give Trump time to work on long-term trade deals.

“Unfortunately, America’s hard-working agricultural producers have been treated unfairly by China’s illegal trading practices and have taken a disproportionate hit when it comes illegal retaliatory tariffs," Perdue said. "USDA will not stand by while our hard-working agricultural producers bear the brunt of unfriendly tariffs enacted by foreign nations."

China trade tensions worry us farmers The U.S. hiked tariffs on Chinese imports Friday. Beijing has said it would be forced to counterattack. China could put higher tariffs on a number of U.S. goods including soybeans, whiskey and pork. (AP Video)

Through the Commodity Credit Corporation Charter Act, farmers growing select crops, including soybeans and corn, will have access to incremental payments to help them develop new markets and manage surpluses. The agriculture department will also be able to purchase surplus crops for food banks and will help with developing new export markets.

With soybean prices dropping, farmers had been hoping for some action, Wells said, describing the aid package as a "boost to morale." Still, after nearly four decades of building up the Chinese soybean market, farmers would prefer their income to be through sales, he said.

"It always comes out, farmers are getting so much off the government," Wells said. "We don't want that. We want a free market and let the market dictate the prices."

Soybeans were Tennessee's largest crop in 2016, with exports totaling $422 million. China represents 30 percent of the U.S. soybean market, according to Tennessee Farm Bureau officials.

Wells said China will likely turn to Brazil for soybeans or reduce the country's intake with tariffs on U.S. soybeans.

U.S. Sen. Bob Corker, a Tennessee Republican and chairman of the Senate Foreign Relations Committee, described the farm package as "welfare" for farmers and urged the Trump administration to end its tariff policies. He has been leading efforts in Congress, giving lawmakers more authority on approving tariffs related to national security and said he will continue to push for a vote.

"I am glad that the administration finally seems to understand that the Trump-Pence tariffs are hurting the American people,” said Corker. “These tariffs are a massive tax increase on American consumers and businesses, and instead of offering welfare to farmers to solve a problem they themselves created, the administration should reverse course and end this incoherent policy.”

Thirty-nine Republicans and 49 Democrats backed Corker's non-binding resolution earlier this month calling for Congress to have a role when the president imposes trade barriers in the name of national security. The resolution was seen by some as a signal of restiveness within the GOP on Trump's handling of trade.

Former Tennessee Gov. Phil Bredesen, who is running for a U.S. Senate seat against U.S. Rep. Marsha Blackburn, also called on the Trump administration to end the tariffs instead of offering "handouts" in a Tweet on Tuesday.

"Glad the Administration received the message--our farmers are hurting and need relief," Bredesen wrote on Twitter. "As always, the instinct from DC is to pull out the credit card and not worry about the bill. Our farmers don’t want handouts and taxpayers don’t want more debt. Simple solution: end the tariffs"

Blackburn also emphasized the value of free markets and said the farm package was not a sufficient resolution to the tariff conflict.

"These tariffs are a bad deal for Tennesseans, but these proposed subsidies will not fix the problem," Blackburn said in an emailed statement. "I will continue (to) promote free trade and free markets, and I will do everything I can to protect Tennessee jobs.”

Tennessee Farm Bureau Federation President Jeff Aiken said Trump's assistance plan is a "welcome measure of temporary relief" that will help offset losses and ease uncertainty caused by the retaliatory tariffs.

"As Tennessee farmers prepare to harvest 2018 crops, Farm Bureau will continue to advocate for a resolution to these trade disputes to restore lost markets and seek out new markets for our agricultural products," Aiken said in a statement.

Wells said he is hopeful Trump can reach a trade deal so the instability does not continue in the long term.

"We don’t want this to go year after year," he said. "If the trade war continues, it hurts us more in the long run than it will right now."

USA TODAY contributed to this story.

Reach Jamie McGee at 615-259-8071 and on Twitter @JamieMcGee_.