Volker Petersen is a guest from Germany we are hosting this week at KELOLAND Media Group. He participates in an exchange program by the “Rias Berlin Commission” that was founded to promote better understanding for Germans about the U. S. and for Americans about Germany. He is a journalist for the national news TV station n-tv in Berlin where he is an online news editor. He covers national and international news and has a special interest in the U.S. Volker is 37 and has not been to the Midwest before. He says he’s impressed with people’s friendliness, the falls and the wide open space outside the city that you just don’t get in Europe. He translated an article he wrote for n-tv on agriculture in South Dakota to be shared on KELOLAND.com.
This article has been revised to reflect the following correction:
Scott supported the TTP deal; that point has been updated in the story.
SIOUX FALLS, S.D. (KELO) — Being a farmer in South Dakota does not currently seem to be much fun. A wet year, flooded fields and President Trump’s trade war with China are affecting farmers throughout the Midwest.
“The president calls us patriots because we take a hit for the country,” Kevin Scott, who owns several farms in and around Valley Springs in the state’s southeast corner, said.
Like many South Dakotans, he voted for Trump in 2016 and still supports him despite the problems he and other farmers are now facing.
In response to the newly imposed U. S. tariffs on steel, aluminum and other products, China retaliated with tariffs on U. S. agricultural produce like soybeans. That already led to decline of production in the past year after decades of rising yields. According to the U. S. Department of Agriculture, the value of soybean production fell from $41 billion in 2017 to $39 billion in 2018.
The Federal Government tried to support the farmers with subsidies. “They help a lot, but they don’t make up our losses,” Scott, who serves on the board of the national American Soybean Association, said. According to Scott, every third soybean from the U. S. is exported to China.
Scott says not every farmer manages to stay as relaxed as he does.
“Some are concerned and don’t agree with the President’s policies,” Scott said.
But he likes how Trump handles the issue.
“China has a history of not complying with agreements,” he said. “We need a level playing field.”
According to Scott, the current conflict on trade could even be positive for the farmers if Trump strikes a satisfying deal. “We’ll have to wait and see what happens.”
Trump is not the first president to address the issue. His predecessor Barack Obama tried to tackle it with the free trade agreement called the Trans Pacific Partnership (TPP). It was supposed to include most of East Asia, Australia, Canada and several Central and South American countries. One of its purposes was to form a block against Chinese influence and to force Beijing to comply with trade rules.
Trump pulled out of this agreement shortly after he entered office in 2016. He said the treaty would have undermined U. S. independence. Left-wing politician and free-trade critic Bernie Sanders applauded him for the withdrawal. Scott agrees. “We supported it in the ASA. But now we have at least a deal with Japan,” he points out.
Another problem for soybean farmers from South Dakota, along with other parts of the Midwest, could be Brazil, the biggest competitor on the world market. “The Chinese are building infrastructure in Brazil which is concerning,” Scott said. “But then again, not really. In Brazil, the seasons are reversed, so they harvest in our springtime.”
As a result Brazilian and American soybeans don’t compete directly with each other. According to Scott, that leads to an even supply for the world. “Brazil couldn’t serve the whole market alone. The demand for soybeans has been growing for years,” Scott said.
In regards to the upcoming election, the trade war and the complaints from some farmers could become a problem for the President. However, Scott disagrees with that. “I don’t think that the farmers’ vote will decide the elections. Only two percent of Americans are farmers,” Scott said.
It is clear that he does not like being dependent on state subsidies. “We want to sell our product on open markets and don’t want to be in need of help,” Scott said.
He does not believe the farmers will have to wait much longer for an agreement. “I think there will be a deal soon for agriculture,” he said. Scott thinks China is in much bigger need of soy now than it was before.
“They had the African Swine Fever, which killed many hogs. So they did not need to buy soybeans. Now they switched to poultry and need to buy soybeans again to feed them.”
News from China seemed to confirm Scott’s optimism. Reuters reported the Chinese government offered waivers to companies to import 10 million tons of American soybeans without tariffs.
But that is only a ray of light for the farmers. A few miles from Scott’s farm there is a mile-long freight train waiting to load soybeans and bring them to the Pacific Northwest from where they are shipped to China. But if the Chinese tariffs stay, the farmers will have to find another buyer for their product. As long as the Trump administration does not strike a deal with Beijing, they will have to deal with tariffs and the shrinking Chinese demand.