With the tendency of the legacy media to ignore that farming even more so than any other capitalistic endeavor always involves risk as well as gain depending on the market, years of socialism in America look grim for some where too many politicians pandered for votes to get elected by promising and delivering too much taxpayer money used to prop up too many marginal farmers in a perpetually viscous cycle of tax subsidy. While free market capitalism is, of course, the best system, even when properly functioning, the market will always be potentially rewarding as well as disappointing especially when trading with a dishonest player like the Chinese Communist Party.
American Farm Bureau Federation Executive Vice President Dale Moore said, “Well, their announcement that they are going to basically stop importing all U.S. farm commodities products, to quote our president Zippy Duvall, when he said yesterday, it is a body blow. And I don’t know any other way to describe it … Frustration. You know for years China has been a challenge to deal with it in a number of different ways whether it’s some of the new technologies that come on to help farmers in their production, you know, seed varieties crop protection products those kinds of things and getting that through China’s regulatory scheme. And I use that in all the ways you might define scheme. Now, we’ve been wrestling trying to get them to come to the table and discuss some of these issues. And now though it’s just turned into an all out trade war and farmers and ranchers are caught right square in the crosshairs. And not just the farmers and ranchers. I guess, I’d want to make sure that that includes the you know the other folks in the value chain that are part and parcel of putting agricultural commodities into products that are part of what we export.”
While the Chinese Communists failed to meet their promise to stop the sale of the pain killer fentanyl, which is killing Americans caught up in the opioid crisis and their promise to purchase American agricultural products, they also, in a desperate attempt to boost exports in their slow economy allowed their yuan to fall below 7 to the dollar causing volatility in stock markets worldwide. White House Economic Adviser Larry Kudlow explained how that in contrast, the president whose responsible for defending and protecting the American economy bargains in good faith and has America in good shape with China the biggest loser.
Kudlow said, “We’ve had fabulous market, fabulous market. Agreed it was quite volatile yesterday. These things come and go. I think the president’s view has always been, that we have negotiated in good faith, we want to continue to negotiate in good faith with the Chinese. Unfortunately his view is we didn’t make any progress at the Shanghai meeting so he took an action. Disappointment about the lack of ag purchases and the fentanyl issue which is a heartfelt issue to the president. So he’s here to protect America’s economy, he’s here to defend America’s economy. And part of that of course is to try to generate or regenerate a free, fair, reciprocal, lawful trading system to do that.”
And then he said, “China’s slashing its prices, that’s killing their profits and their companies. Production and supply chains are moving out of China. We have elasticity of demand. Our importers can shop elsewhere outside of China. That’s hurting China. The economic burden is falling vastly more on them than us. Now as far as the rest of the world goes, you know, we’re going out to the G-7 in a few weeks in Biarritz, France. I wish we could go back to the old G7 ways. I’m old enough to remember, they started in the mid 70s, used to write about it when I was a younger man and talk about economic growth worldwide. Pouring money and devaluing currencies is not the answer. Lower tax rates, creating incentives, deregulating labor and energy markets everywhere and fair trade. Those are the things that our allies should be looking at. But I agree, they’re in poor shape economically, were in great shape economically and frankly the biggest loser is China right now.”
Meanwhile, as some of the American farming sector adjusts to the reality of market volatility, they recently received some relief from the US Congress in the form of favorable changes to the Chapter 12 bankruptcy regulations and look forward to congress approving other trade deals with Mexico, Canada, Japan and the European Union.
Moore said, “We constantly worry about that. When I first came to Washington D.C. it was back in the early 80s and that was one of the challenges then, the farm economy was in a very similar situation. Farmers and ranchers all across the country going into bankruptcy because the market was not providing the return they needed. You know not only to feed themselves, take care of their families but to simply pay their bills. We’re going through a very similar situation. Bankruptcies are starting to increase. We see that across the country. We’ve put out information on that. Last week one of the wins we had when the Senate completed work that the House put together on changing some of the critical points in the Chapter 12 bankruptcy rules. One thing that we very much appreciate that and we’re hopeful that the president will sign it soon. But, I think it’s a clear sign of the times when one of the legislative victories we’ve got is improving bankruptcy laws.”
And then Moore said, “Our farmers and ranchers tell us you know they appreciate that the president is in the fight to try and get China straightened out. They appreciate that he has provided some trade mitigation tools like the market facilitation payments which help cover some of of the impact that we’re dealing with. But what we really need, what we really want are these trade agreements like the USMCA, the Japan agreement, getting the EU announcement out just last week on on beef. Those kinds of things send a positive message.”
Includes reporting from the Associated Press