Saturday, September 29, 2018 | a special supplement to
K
OKOMO
T
RIBUNE
A COMMUNITY
ON THE MOVE
AGRICULTURE SPOTLIGHT
PG.
18
FARMERS ANTICIPATE
RECORD-SETTING HARVEST
WHILE PRICES HIT RECORD LOWS
PG.
19
ORGANIC
FARMING
GROWS IN
POPULARITY
BY CARSON GERBER
KOKOMO TRIBUNE
A
gricultural economists an-
ticipate the vast majority
of farmers in Indiana will
apply for their share of
the $6 billion in aid
money provided by the U.S. De-
partment of Agriculture to offset
plummeting crop prices follow-
ing President Donald Trump’s
ongoing tariff war.
The biggest payout by far will
be for soybean farmers, who
will receive more than 90 per-
cent of all the bailout money
coming to Indiana, according to
estimates from Purdue Univer-
sity.
Farmers began applying for
aid on Sept. 4. The USDA an-
nounced in July it would autho-
rize up to $12 billion for farm-
ers through its Market Facilita-
tion Program.
The department said initial
aid will consist of about $4.7 bil-
lion in payments to producers of
seven agricultural commodities,
and also include purchasing up
to $1.2 billion in certain “com-
modities unfairly targeted by
unjustified retaliation.”
The department said the re-
maining $6 billion authorized
for the program would be re-
leased during a second payment
period “if warranted.”
Kent Chism, who farms in
western Howard County and
serves on the Howard County
Farm Bureau board, said he will
likely apply for aid. He said
profits at his farm are down
about 20 percent this year, and
the money will go a long way in
helping offset that loss.
“It will definitely help out,” he
said. “For some producers, it will
be a life saver. For us, it will tide
us over.”
The USDA said eligible appli-
cants must have an ownership
interest in the commodity they
produce, be actively engaged in
farming and have an average
adjusted gross income of less
than $900,000 for tax years
2014 through 2016.
The big payout will be to soy-
bean farmers, who will get $1.65
in aid per bushel for half of
their total crop. The USDA esti-
mates that more than $3.6 bil-
lion will be paid out for soy-
beans.
Chris Hurt, an agricultural
economist at Purdue University,
said the state is set to produce a
record soybean crop this year,
with average yields of 58 bush-
els an acre. Farmers also planted
in total more than 1 million
more acres of soybeans than
corn this year, which is substan-
tially higher than most years.
That means an average farm
is set to receive nearly $48 in
aid for every acre of soybeans.
In total, Indiana soybean farm-
ers will likely receive $296 mil-
lion, Hurt said.
“This is a real significant
amount of money,” he said. “It
doesn’t compensate for all the
potential losses from the trade
distribution, but this adds up to
a lot of money. For families that
are tight on cash flow, this is re-
ally valuable.”
But the news isn’t so good for
other kinds of farmers. For corn,
the program is only paying 1
cent per bushel for half of a far-
mer’s crop. In Indiana, that
means corn farmers will only
get an estimated $6 million,
Hurt said.
Diary and hog farmers are in
the same boat, with small pay-
outs that likely won’t offset the
losses. Those losses have been
created not only by Trump’s tar-
iff war, but also a saturated U.S.
market for both milk and pork,
he said.
“For Indiana, there’s really
only one commodity that’s going
to significantly help with cash
flow for family farms, and that’s
soybeans,” Hurt said. “And we’ve
got lots of soybeans this year.”
As the bailout money makes
its way into local farmers’ pock-
ets later this year, the Trump ad-
ministration continues to battle
with America’s largest trading
partners to negotiate new deals.
Kathy Parkison, a professor of
economics at Indiana University
Kokomo, said most economists
believe tariffs aren’t the way to
achieve those new deals, and
could have a devastating, long-
term impact on the U.S. econ-
omy.
“As an economist, we are all
pretty much unanimous in op-
position to trade barriers in gen-
eral,” she said in an email.
Hurt said if the trade war goes
on for too long, there’s real con-
cern China, which is by far the
largest buyer of American agri-
culture products, will simply cut
new deals with other countries
for its food and blackout the
U.S. as a trade partner all to-
gether.
“The Trump administration is
working on a bigger plan than
just agriculture, and they’re try-
ing to get better trade deals with
all these countries, but espe-
cially China,” he said.
Parkison also worried the $12
billion bailout program to keep
farmers afloat in the short term
will dig the country into an even
deeper fiscal pit.
“Subsidies have a direct im-
pact on the budget – the money
has to come from somewhere,”
she said. “If folks are worried
about the budget, these subsi-
dies will blow a huge hole in it,
which means more borrowing.”
But for Howard County
farmer Chism, the risk is worth
the potential reward. He said he
still holds out hope that Trump
will negotiate better trade deals
for the U.S. that will lead to new
markets for farmers and fairer
trade around the world.
“It may take a little more
time,” he said. “It may take an-
other six months or even a year,
but I think in the long term it
will benefit the United Sates.
We’ve been in a trade deficit for
so long, so it’s time to get things
realigned.”
But, Chism said, he hopes
those new deals come sooner
rather than later. He said in the
end, he’d rather make his
money through selling his crops
in a fair economy than getting it
in the mail from Uncle Sam.
“I would be happier with mar-
ket revenue rather than govern-
ment money,” Chism said. “ …
And if we get overall trade deals
that are good for the U.S., that’s
going to help.”
LOCAL SOYBEAN FARMERS TO SEE HUGE PAYOUT FROM FEDERAL AID PROGRAM
GROWING:
Scott Smith, left, and Glenn Hinkle, of Triple S Smith
Farms in Windfall, check on a soybean field.
(Tim Bath | Kokomo Tribune)
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