No matter who wins the upcoming election in the United States, Canadian farmers can expect to continue facing tough competition from their heavily subsidized peers south of the border.
Fairly early in his 2016 election bid, it became clear producers saw Trump as the favoured candidate.
His nationalist rhetoric helped win farmers over.
A candidate aiming to balance foreign trade in the American workers’ favour was appealing.
Farmers frustrated by shrinking incomes found faith in Trump when he spoke in their communities about loosening red tape and pledging to protect the Renewable Fuel Standard, which ensures biofuels are added to the fuel supply and helps prop up corn farmers.
Plus, thousands of American farmers are traditionally Republican.
This year producers could end up playing a key role in the upcoming presidential election.
Iowa, Wisconsin, North Carolina and Indiana are being considered swing states – each also ranks among the country’s top 10 agricultural-producing states.
Trump’s bad-faith negotiating tactics sparked trade wars, resulting in producers getting lower prices. His flip-flopping on forcing the use of biofuels hurt farmers, too.
Yet, farmers will still vote for Trump.
Ad hoc payments since 2018 under Trump have distorted the market, and in the past two years, the United States has exceeded its WTO limits of domestic support for agriculture. Trade wars and the COVID-19 were used to justify the spending.
Without that support, U.S. farm income would drop significantly.
Already some Democrats are alleging Trump is using payouts and subsidies to farmers as a way of buying votes in swing states ahead of the upcoming election.
There is at least some evidence to suggest they are right.
Trump’s agriculture secretary, Sonny Perdue, was found by a federal watchdog to have improperly used help for farmers as a bid for the president’s re-election during an event in North Carolina.
No matter who they vote for, farmers shouldn’t expect the ad hoc support to dry up immediately because it looks like payouts will continue, regardless of who occupies the White House.
The use of payouts to farmers are quickly becoming entrenched in American agriculture under Trump, and likely won’t disappear if he loses, particularly in the immediate aftermath.
A president-elect Joe Biden will have bigger priorities than angering farmers by effectively lowering their incomes. If he does win, it would be partially on the backs of states like Iowa, where the payments are welcomed.
Politically, it doesn’t make sense to end the payments.
Beyond that, the inability of the World Trade Organization (WTO) to enforce international trade laws means the U.S. can easily violate its international commitments without facing any recourse.
None of this is good for Canadian producers, who continue to do their best in a chaotic and distorted global trading market.
Doing so successfully is near impossible when their biggest competitor is shielded from a free market – put simply (maybe too simply), U.S. farmers don’t have to worry as much about how many acres they will plant, or what price they receive for commodities, because they know support from government is there.
That distorts markets, and will likely lead to lower prices – and in turn, less income – for Canadian farmers.
Farmers in Canada may be rooting for one candidate over another as they watch the circus of another American election – but they shouldn’t expect whoever wins to make life easier for them.