For the last four years Donald Trump was a dream president for U.S. agriculture. Despite a crippling trade war with China, a close call converting NAFTA to USMCA, and some slip-ups with small oil refineries weaseling out of RFS, Trump made an instant connection with farm voters. His deregulation crusade, topped by the WOTUS re-vamp and tax relief, was music to agriculture’s ears.
Despite being a big city millionaire Trump’s plain talk resonated with rural voters, and that love was reciprocated at the ballot box.
So maybe it’s no surprise to learn what our post-election survey reveals about farmers, President Joe Biden, and the new Democrat-led Congress. Despite Biden’s calls for unity and declarations he will be a president for all Americans including Trump voters, farmers are clearly uneasy about the next four years.
Should they be?
Our survey shows nearly nine of every 10 farmers believe taxes will go up under a Biden administration. Another 71% believe WOTUS will be overturned. Only 22% believe markets will stabilize with a new trade strategy. And four of every five farmers believe there will be less government ad hoc funds going to agriculture.
“I am worried about everything in that survey,” says Vinton, Iowa, corn and soybean farmer Lance Lillibridge. “The Biden administration may look at WOTUS, and I believe taxes may go up as well. Stepped-up-basis (adjusted value of inherited assets) needs to stay where it’s at because otherwise it’s double taxation. It’s working well now.”
The unease in farm country today feels similar to farmer attitudes after President Barack Obama was elected. And while farm organizations and lobbyists engage with new political leaders on Capitol Hill, it may be some comfort to remember that, “when it comes to ag policy, usually the worst doesn’t happen, but you need to be prepared for changes,” says Farm Futures Ag Policy Editor Jacqui Fatka. “You hope you don’t get to the far extremes.”
Four years ago both Republicans and Democrats formed the ‘Problem Solvers Caucus’ to “work together as Americans to successfully break through the gridlock of today’s politics.” Last year that caucus unified to provide COVID relief. Not so much this year. Proposals in the House Ag Committee happened without any input from Republicans, and the one amendment that was included, with one Democrat crossing party lines, was eventually stripped by upper House leadership. There is no Republican support in the current COVID relief package, and instead it is a $1.9 trillion push coming from the White House.
“They are saying ‘unity’ but right now Congress is functioning without any bipartisanship,” says Fatka. “Everything we’ve seen so far in 2021 has not been bipartisan.”
The reconciliation process and some of the methods the new Democrat-controlled Congress uses could lead to higher taxes for farm families because you only need a simple majority vote. And keep in mind Republicans did the same thing when they passed the 2017 tax relief deal.
Communicating and educating your elected leaders is the best way to mitigate drastic change in business regulations, says Fatka.
“If you can put a pencil to whatever proposal does get into congressional debate and show how it would impact you as a farm and family, you should share it with legislators,” she recommends.
Like farm profitability the country’s politics have razor thin margins right now. The U.S. Senate is a 50-50 split. And because our politics have become so polarized, when just one senator changes their vote they often get demonized. Because U.S. Sen. Diane Feinstein, D, Calif., hugged her Republican counterpart after the Amy Coney Barrett Supreme Court confirmation hearing, she lost her seat on the judiciary committee. That’s just one example of the weirdly sharp divisions going on in D.C. right now.
Biden’s flurry of executive orders has likely run its course; now the country will learn if anything can be accomplished legislatively. There will be another chance for bipartisanship this fall if immigration reform gets serious.
“We need some fixes in ag labor,” notes Fatka. “That will be another deciding point in showing if they are willing to work together.
“I keep hoping we’ll see bipartisanship, because for rural America that is what you need,” she adds. “It usually means you have more levelheaded solutions, moving more toward the middle, with give and take.
“It’s not what we’ve seen so far.”
Finding common ground
Which begs the question for agriculture: is there any hope for common ground?
Maybe. Start with climate.
“With a Democrat-run House, a slight Democrat edge in the Senate and Democratic president, they’re all pushing climate legislation,” notes Lillibridge, who is also vice president of Iowa Corn Growers Association. “As long as farmers are at that table and part of the solutions, agriculture will be okay.”
Indeed, climate change is an area that has bipartisan support so far. The incoming Senate Ag Committee chairwoman, Debbie Stabenow, D, Mich., along with U.S. Senator Mike Braun, R, Ind., and others, are pushing the Growing Climate Solutions Act, which would enable farmers to participate in carbon markets.
New climate policy will likely include renewable fuels, which should be a bridge to rural voters. Both Biden and ‘new’ Ag Secretary Tom Vilsack are big supporters.
“Ethanol is a big problem solver in climate issues,” says Lillibridge. “It’s huge and it doesn’t get the attention it needs. We can produce ethanol year in and year out. With ethanol we’re collecting the sun’s energy and transforming it into food, fuel, and fiber; you can’t do that with oil, a solar panel, or a windmill.
“Ethanol fits into this president’s climate plans and that’s the silver lining,” he continues. “We’re looking way too much at the potential negatives right now. Let’s look at the positive and make it the focus, so no one has time to focus on the negative.”
The aforementioned Vilsack is another bridge-builder for agriculture. Early in Trump’s administration Sonny Perdue stepped in to help the president fully appreciate the importance of NAFTA to farm constituents; Vilsack can play a similar role for Biden. As ag secretary for President Obama, he earned farmers’ respect. As CEO of the U.S. Dairy Export Council he oversaw a big jump in U.S. dairy exports.
Biden and Vilsack are long-time political allies. If Biden wants to make friends in the farming community, he’ll use Vilsack’s experience to help make decisions with farmers’ best interest in mind.
“At the end of the day it will be good that Vilsack took the job,” says Fatka. “He’s a known entity for those in the ag community and because of his track record there’s no learning curve. That is a really big positive and should give farmers some comfort.”
A strategic approach to trade
President Biden’s U.S. Trade Representative ambassador, Katherine Tai, should also be a hit with agriculture. She helped secure passage of USMCA. She was the chief enforcer against China’s unfair trade practices. She was raised in Thailand and speaks fluent Mandarin – a big advantage as the U.S. negotiates the next trade deal with China, our biggest ag customer.
And most important, she has pledged to take the step Donald Trump failed to take – engage trade allies to build a strategic coalition that can keep China accountable.
Farmers were willing to stand with Trump because they saw him as a business person – someone who put his foot down and stood up to China. But farmers should remember that Biden’s key role in the Obama administration was foreign expertise. Right now Biden is too busy fixing COVID and the economy to focus on China, but trade should in fact be one of his strengths.
Lillibridge says there are many new trade opportunities ripe for the taking. Many look to the UK, South Africa, Kenya, and Southeast Asia as potential for boosting trade. India is also seen as the next China but may take decades before that is fully realized.
Biden and this Congress may surprise farmers and make the Farm Futures poll irrelevant. But in any case, farm organizations and their lobbyists will need to ramp up efforts to educate political leaders.
“As Iowa Corn Veep and farmer I need to be able to build a relationship with whoever is in office,” concludes Lillibridge. “That’s hard to do if you’re feeling negative about someone.”