Farm Bankruptcies Surge
MICHEL MARTIN, HOST:
There is disturbing news from America's heartland. A recent report from the American Farm Bureau Federation says the number of farms filing for bankruptcy is up 24% from the previous year. It's the steepest rise the farming industry has seen in years, and the total farm debt for 2019 is expected to hit $416 billion, a record high.
We wanted to learn more about what's causing this, so we've called on Dale Moore. He's vice president of the American Farm Bureau Federation. It's an independent nonprofit organization that collects information, lobbies and provides training for farmers around the country. And he was kind of to join us in our studios in Washington, D.C.
Dale Moore, welcome. Thank you for joining us.
DALE MOORE: Thank you, Ms. Michel. I appreciate the opportunity to visit with you.
MARTIN: So why are we seeing this increase in farmers filing for bankruptcy? Is there one cause or several?
MOORE: It is a multiple of factors. Well, you've got to look over the last six years. Net farm income six years ago was around $132 billion - kind of a macro number. If you take away the government payments that have been big help for that, it's down around $69 billion. So we've lost nearly half net farm income. Some of that's markets. Some of that is some of the trade wars that have been going on, certainly in the last couple of years. But the bottom line is it's just a lot of different factors that go into what is basically a commodity market.
MARTIN: So let's talk about the trade war. I also want to talk about the weather. Maybe let's talk about the weather first. I mean, many people will - even if they don't farm will know that weather has been extreme this year. There was major flooding in the Midwest, causing, you know, farmers to miss prime planting season. Is that a factor, or is it too soon to tell?
MOORE: It's always a factor. You know, farmers - one of their primary partners in the enterprise of raising food, raising feed, fiber, fuel is Mother Nature. And this year, she has not been a very willing partner in helping do this. So we've had the floods. We had, you know, the - what is it? - the cyclone bomb that caused the freezing and all of that. We've had wildfires going on out in California. They're very much in the news these days. You go back, hurricanes - all the different things that hit drought in some parts of the country.
And so that has an impact, particularly as farmers are trying to deal with that. Like, the wet weather we had this year - farmers had to plant two and three times in order to try and get a crop to come up so they'd have something to harvest.
MARTIN: Did the subsidies help with that? And you mentioned that a significant portion of farm income this year is from government subsidies and payments. So do the payments help with that kind of - these extreme weather situations?
MOORE: They absolutely help. So in - for extreme weather, most farmers, their bankers require them to carry crop insurance, a federal crop insurance program. A lot of that kind of plays out. But you've also got, you know, the farm programs, and for certain commodities do provide some additional help. You've got disaster assistance that Congress went through to help with that. And then, on top of that, you know, these trade mitigation payments - all of that helps. But it seldom makes a farmer whole when he or she's been impacted.
MARTIN: Talk to me about the trade war, though. I mean, this is something that a lot of Americans, even if they don't farm, are familiar with - the fact that this is going on. But can you just give me just some parameters of how this has affected people in particular areas?
MOORE: Couple years ago, China was one of our leading agricultural markets that bought over $20 billion, $21 billion of agriculture commodities and products a year. This year, they're going to be around 7.5 billion to 7.8 billion, so that is a tremendous drop. A lot of that - their No. 1 soybean market, No. 1 pork market.
Now, some of those commodities, like pork, even with the 72% duty that they impose, you know, are coming back up. But the reason that the imposition of duties is on agriculture products - we are a net exporter of agriculture to China. China is getting hit with tariffs coming for their products coming into the United States, just kind of fundamental, you know, how these games and fights get played out. We put the tariffs on that industry sector that's going - they hope will holler the loudest but also is the one that we are bringing the most in and having some consequence back in the United States.
MARTIN: So we keep hearing that despite the fact that, you know, the farming industry on the whole has been one of the hardest hit areas by this tariff war with China, we are hearing that farmers - I don't know if - you can't speak for all farmers, but that we hear farmers as a group are still continuing to support President Trump's policies. And I think a lot of people have a hard time understanding, how is that possible? Because - do they feel that it's victory's in sight? Or what do you think that means?
MOORE: For decades, China's been a challenge to work with and play fair with or them to play fair with us. But it's also - you know, President Trump, some of his issues related to regulatory reform and some of the impacts - you know, regulation can suck as much out of your pocket as a trade war or Mother Nature. It's also tax reform and other things going on there. So you kind of go down the list of things that he's getting credit for them. And if you talk to some of them, they'll just straight-up say, well, you know, may be frustrated at how this is going on the trade front, but at least he's in there fighting.
MARTIN: That is Dale Moore. He's the vice president of the American Farm Bureau Federation. It's an independent nonprofit organization that lobbies and collects data around farming around the country.
Mr. Moore, thanks so much for talking to us.
MOORE: Thank you, Michel. It's a privilege to be with you.
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