As goes agriculture, so goes Nebraska. Nearly 47,000 farms, 22.2 million acres of cropland, 21.5 million acres used for pasture, and $21.9 billion in agriculture products sold, 75 percent of that coming from Nebraska’s 3rd Congressional District. In fact Nebraska-3 ranks first in the nation in overall value of production with total sales reaching $16.6 billion. But the recent Census of Agriculture, which underlines how critical agriculture’s success is to the state’s economy, has a troubling bottom line: Agriculture isn’t going so well in the Cornhusker state.
The census highlights the increasing danger Nebraska farming and ranching businesses face from Washington policies that are supposed to provide a financial safety net, but instead engender dependence on DC. That needs to end. Federal farm policy needs to be an instrument for farmer and rancher success, not an obstacle to opportunity. And the often cited “50 percent drop in income since 2013” statistic is misleading, because 2013 was the highest revenue year in nearly the last half century (since 1973). Meanwhile a well-intentioned but poorly executed trade conflict with China has resulted in agricultural exports, historically a perennial bright spot, falling 4.4 percent from last year.
That’s dented Nebraska, where soybeans and hogs make up 16.9 percent of ag-related receipts in the state, and depend heavily on exports. Nationally, soybean exports dropped 20.5 percent in 2018 from 2017 levels. Pork isn’t doing any better, with an 8.2 percent drop in sales so far this year. The outlook for both commodities is grim, and complicated by the wettest year on record.
Financial feast or famine is a story Nebraskans know all too well, one increasingly common in agriculture. Enter federal legislative responses, which simply add fuel to the fire.
Washington has enacted a five-year farm bill projected to spend $200 billion on farm income support, passed two emergency disaster spending bills with $5.4 billion to the ag sector, and earmarked $28 billion of federal aid in place of trade. Yet the financial health of farming and ranching businesses continues to deteriorate. The bankruptcy rate of farmers is rising in the Midwest. USDA’s projected $69.4 billion in net farm income will still fall far below the average of $90 billion experienced from 2000-2017. All of this has led to what USDA refers to as “direct government payments,” i.e. subsidy checks sent from the Treasury to farm businesses, reaching their highest level in nearly 15 years.
This isn’t sustainable.
The federal government has a role in agriculture. Taxpayers for Common Sense supports a federal safety net for American farming and ranching businesses, provided tax dollars are invested wisely and efficiently. Subsidies should focus on those who actually need them, and when risks are too costly or complex to manage independent of Washington. This means reducing barriers to trade, not erecting new ones. Investing in tools to discover what conservation practices actually achieve their intended outcomes, while reducing farm operating costs, and disseminating that information through robust state extension systems. And dismantling burdensome regulatory barriers and arbitrary mandates where Washington wisdom replaces individual responsibility and economic liberty.
Too often fiscal conservatives and farmers and ranchers see each other as adversaries instead of allies. In fact we are incredibly alike. We both agree that the government shouldn’t be the deciding factor in business decisions. Instead, farmers and ranchers should be empowered to operate their business according to their own abilities, estimates, and values. We can afford a financial safety net for agriculture. But reviving an era where government payments decide who survives or fails, is too costly for everyone.
NB: This oped appeared only in print. You can find a PDF here.