It is evident that the incoming Administration of President Donald J. Trump will attempt to implement many of the pre-election promises early during the coming term of office. The principal policies will revolve around deportation of illegal immigrants and improving the financial wellbeing of citizens. These objectives will establish conflicts that have a direct bearing on agriculture and hence the availability and price of food. Apparent conflicts will have to be resolved by concessions made by both sides of the aisle in the 119th Congress. Legislators holding extreme positions on the left and right will be forced to moderate their entrenched positions in the interests of the nation.
Potential conflict areas include:
- Tariffs raise the prospects of trade wars. If the Administration imposes tariffs on our two USMCA partners, in addition to the E.U. and especially China, trade will be impacted by countervailing punitive action. This will reduce exports and disturb the equilibrium between domestic supply and demand. Prices for major agricultural commodities including corn and soybeans will fall to the advantage of livestock producers but will seriously reduce the earnings of row-crop farmers.
- Deportation of nondocumented agricultural workers will reduce the availability of labor and increase the cost of production. This will be passed onto consumers and will run counter to the promise to reduce family expenditure on food.
- Relaxation of environmental, health, financial and other regulations will facilitate expansion of some agricultural operations. Advantages may however be offset by fraud, a decline in food safety standards and environmental degradation.
- Reversal of climate remediation will be counterproductive. Progress has been made in reducing greenhouse gas emissions by adopting solar and wind generation of electrical power displacing fossil fuels. Encouraging greater use of petroleum products through a “drill-baby-drill” approach may be both impractical and ultimately costly. Global warming is contributing to the frequency and intensity of hurricanes and other weather extremes imposing high costs for response and repair of damage. Reversing progress in clean energy through restricting wind, solar and nuclear generation would be to the medium- and long-term detriment of our economy and health in the U.S.
- Reducing government expenditure by as much as $2 trillion annually would require extensive reductions in social security and Medicaid benefits. Although preventive medicine will ultimately reduce the cost of treatment of chronic conditions, benefits would only accrue in future decades, but the pain would be borne in the immediate term.
- Increasing farm support would appear necessary following a trade war characterised by reduced exports, increased costs for labor and the inevitable restoration of inflation predicated by a program of tariffs. This would require an increase in the national debt that is antithetical to conservative values.
Radical solutions to current problems will have unintended consequences. The move towards isolation as exemplified by the Smoot-Hawley Tariff Act of 1930 effectively precipitated the great depression over the third decade of the previous century. Farmers were the most impacted segment of the economy resulting in profound demographic changes in our population. Despite improved efficiency in the agricultural sector through consolidation and mechanization, both cost and revenue will be adversely affected by inappropriate and imprudent policy decisions.
It is hoped that bipartisanship and sound economic policies will prevail in the coming administration and 119th Congress and that extreme pre-electoral rhetoric and promises will be modulated in the interests of wellbeing of our citizenry and long-term growth of the economy.