Farm bankruptcies have soared to the highest levels in more than ten years and 2018 farm income averaged only half of 2013 levels, with President Trump’s trade war and the resulting retaliatory tariffs a major cause of the downturn. The figures from the farm income downturn come from the government, namely the U.S. Department of Agriculture, as reported in the Wisconsin State Farmer, so the administration can hardly deny their accuracy.
Midwestern farmers are filing the highest number of bankruptcies in at least a decade, according to a Wall Street Journal analysis of government statistics, with last year’s farm bankruptcies in Wisconsin, Illinois, and Indiana, for example, twice as high as in 2008. Of course the big drop in farm income is contributing to the bankruptcies. Farmers face shrinking export markets, retaliatory tariffs, and the loss of benefits from trade deals, such as the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP), from which President Trump has withdrawn. According to the Huffington Post:
Hard times for farmers got tougher with President Donald Trump’s trade war. Now Midwestern farmers are filing the highest number of bankruptcies in a decade, according to a Wall Street Journal analysis of federal data…Twice as many farmers in Illinois, Indiana and Wisconsin declared bankruptcy last year compared to 2008, according to statistics from the 7th Circuit Court of Appeals, the Journal reported. Bankruptcies in states from North Dakota to Arkansas leaped 96 percent, according to figures from the 8th Circuit Court of Appeals. Farmers are being battered by sinking commodity prices — and stiff tariffs from China and Mexico in retaliation for Trump’s tariffs on imports. The new 11-nation Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP) treaty last year slashed tariffs — but not for U.S. farmers since the Trump administration pulled out of negotiations. That drove customers to farmers and ranchers in competitive countries, like Australia…According to figures from the U.S. Agriculture Department, farm income last year was about 50 percent of what it was in 2013, the Wisconsin State Farmer reported.
Government subsidies for farmers have increased, up 18% last year from the previous year, according to the Huffington Post, including the Trump plan to partially defray lost income due to his trade war, but clearly those subsidies have not been enough to span the gap created by Trump’s trade practices, as farm income is sharply down and farm bankruptcies are up. Another problem, of course, is that the increase in these subsidies ultimately come from taxpayers, which would not be necessary were it not for President Trump’s trade war, started with his use of punitive tariffs and withdrawal from trade agreements. Trump has expressed surprise that other countries issued retaliatory tariffs in response to his tariffs, instead expecting that they would simply accept the tariffs and do what he wants, but that, of course, is not how reality works. Farmers, manufacturers, and consumers are all paying the price for Trump’s trade war.