Trade

The New Welfare Queens

JM Ashby
Written by JM Ashby

The Department of Agriculture projects that American farm income will reach the highest level in five years in 2019 but, as you know, that amount of resurgence is certainly not coming from exports or even sales here at home as commodity prices continue to decline.

According to the American Farm Bureau, about 40 percent of farm income in 2019 came from Trump's bailouts while farm debt has reached an all-time record high.

USDA currently projects farm income in 2019 to reach $88 billion – the highest net farm income since 2014’s $92 billion, but still 29% below 2013’s record high. In addition, nearly 40% of that income – some $33 billion in total -- is related to trade assistance, disaster assistance, the farm bill and insurance indemnities and has yet to be fully received by farmers and ranchers.

Moreover, farm debt in 2019 is projected to be a record-high $416 billion, with $257 billion in real estate debt and $159 billion in non-real estate debt. The repayment terms on this debt, according to data from the Kansas City Federal Reserve, reached all-time highs for a variety of categories. All non-real estate loans saw an average maturity of 15.4 months, feeder livestock had an average maturity period of 13 months, other livestock had a maturity period of 18 months and other operating expenses, i.e., loans primarily for crop production expenses and the care of feeding livestock, had an average maturity period of 11.5 months – all record highs. Put simply, farmers are taking longer to service their debt – a trend made easier due to historically low interest rates.

We have an industry that is being wildly subsidized while loading itself up with debt they probably won't be able to repay.

Not coincidentally, the vast majority of this industry is white so no one will dare call them welfare queens or any other pejorative term for people who engage in this kind of behavior.

I was going to say it's not their fault that Trump launched a trade war, but on second thought it actually is. They voted for him, didn't they? Most of them did and they may even do so again in 2020.

It occurs to me that while the Trump regime is demanding that other countries like China stop subsidizing industry, American taxpayers are funding nearly half of our own agricultural industry through bailouts.

You may recall that Republicans once referred to General Motors as "Government Motors" following President Obama's bailout for the auto industry, but that bailout was nowhere even near this big. We haven't nationalized farms yet, but maybe we should if we're going to spend this much on them while privatizing the profits.

  • David Greenberg

    I lived in Italy for four years and Italians have an expression: “People get the government they deserve”. If Dems don’t get their shit together and defeat the sewage that is the republican party, then we will deserve what we get. It’s one thing to crap on trump, that’s easy. It’s another thing to beat him.

  • Christopher Foxx

    “Not coincidentally, the vast majority of this industry is white so no one will dare call them welfare queens or any other pejorative term for people who engage in this kind of behavior.”

    Ooh, ooh. Me. Call on me! I’ll do it!

    (Just try and stop me.)

  • muselet

    I’m guessing the majority of the income and debt reported belongs to agribusiness concerns, not family farms.

    That means venture capitalists will buy up companies and siphon off as much value as they can, before crying poor and demanding government assistance (“Congress must protect the American food supply!”).

    Goodness, I’m in a mood tonight.

    –alopecia

  • gescove

    Ry Cooder sang “Taxes on the farmer feeds us all.” Those lyrics need an update.