As members of the U.S. Congress debate the 2018 Farm Bill, which outlines funding for the agriculture industry and food supplement programs, they are focusing less on the needs of U.S. farmers and more on the work requirements for the Supplemental Nutrition Assistance Program (SNAP). And though Secretary of Agriculture Sonny Perdue announced $12 billion in emergency aid for U.S. farmers hit by retaliatory tariffs, producers are struggling more and more to succeed financially and to influence politicians on policies that directly affect the industry. The overshadowing of traditional support mechanisms in the Farm Bill, which controls government aid for U.S. producers, is one sign of the agriculture lobby's waning influence.
The U.S. agricultural industry continues to feel the pressure from U.S. trade battles with China and other major partners. This stress, combined with the agriculture lobby's dwindling power to protect the sector from market forces, will increasingly cause financial problems for U.S. farmers.
U.S. farmers have historically been the beneficiaries of protectionist policies, but due to consolidation and mechanization in the industry, they are increasingly unable to sway the political conversation on topics that would benefit them. Indeed, as employment in the sector declines, its voting influence is waning. And ultimately, the declining power of the agriculture lobby has put an industry accustomed to protectionism at risk of being the sacrificial lamb of the White House's ongoing trade battles.
The agriculture industry has historically played an important role in the U.S. economy and possessed major political clout. Agriculture was vital for the development of the industrial revolution. Blessed by vast swaths of arable land and the mighty Mississippi River, the United States has been a net exporter of food for centuries. As the United States experienced broader economic and industrial development, the contribution of the farming industries to the gross domestic product decreased. But exports still contributed $140.5 billion to the U.S. economy in 2017.
In the past, the agriculture lobby has been able to exert a powerful influence, often punching above its weight class in terms of the sector's contributions to GDP and in terms of the valuable protections the sector received from the government. The industry has at times been supported by government intervention and has been able to influence legislation providing tax exemptions, commodity price supports and investment in rural infrastructure. These economic protections have been critical in allowing the industry to remain lucrative, even as the U.S. economy grows and develops. But recently, the protectionism has been waning.
Current trends in agriculture — farm consolidation, the sector's decreasing contribution to the GDP and the decline of total agriculture employment — are contributing to this loss. Over the past three decades, production has shifted primarily to much larger operations, which has dramatically changed the role of the farmer in U.S. politics. These fewer, bigger farms tend to be more businesslike and to rely less on the supports that have historically made small and medium operations workable. The consolidation of farms and mechanization of many processes also reduce the population of voters who have a direct vested interest in farming.
The Decline of American Agriculture
While technological innovations have boosted U.S. agriculture productivity, the sector's contribution to GDP has steadily declined over the past 50 years. Agriculture, forestry, fishing and hunting currently account for only 0.9 percent of the sum. This drop, when combined with the loss of the number of vested voters and greater international trade competition, means the industry is becoming more vulnerable to market changes.
Exacerbating concerns is the issue of employment. Agriculture employment has also been declining for the past 50 years, and that trend is unlikely to abate in the next 10 years as additional mechanization, precision farming and automation technologies are adopted more and more.
And despite the sector's shrinking employment numbers, it is still experiencing consistent labor shortages. This is in part due to delays in updating the temporary H-2A visa system, which allows guest workers in agriculture. This visa system is essential to the industry because not enough Americans are interested in farming jobs. Yet, the agriculture lobby has not been able to get legislators to pass updates to the system, in part because of a lack of people and a lack of funding. And the resulting labor shortages have been slowing, interrupting or completely preventing production.
Over the past few decades, agribusiness contributions to politics have declined substantially. Lobbying spending by agribusiness as a percentage of total lobbying spending has decreased since 2008, even in election years. Contributions have also gotten slightly more partisan, with more and more contributions going to the Republican Party. Moreover, the composition of the vital, influential Farm Bill has shifted significantly since 2000; its main focus has become funding for food assistance programs rather than protections for farmers.
When discussions began on the Farm Bill set to be renewed in 2008, talks concerned many concrete farming issues such as crop insurance and the farm commodity program, alongside food assistance. In the final version of the bill, which received widespread support in Congress, 63 percent of its spending went to nutrition and 32 percent to commodities, insurance and crop support. But by 2014, the focus of the Farm Bill — and the partisan discussions around it — was so divided that, for the first time in 40 years, the bill did not pass the first time it was put to a vote. Even once it did pass, it contained the biggest cuts in farm spending in a generation. The 2014 bill cut farm subsidies, conservation, food stamps and direct subsidies to farmers. Only 20 percent of the spending went to crop insurance, conservation and commodities, while nutrition accounted for 80 percent. Support dropped in both the House of Representatives and the Senate, and more politicians voted no — including those from states that are top agriculture producers.
As long as farm support and food assistance are lumped together in the bill, the challenge will be to find a balance. The agriculture lobbies will struggle to overcome a hotly contested and partisan issue, constrained by declining influence. And the talks on future bills will be dominated by debates over food assistance rather than the farming industry and have a sharp partisan divide.
An Easy Target
As the industry's political influence wanes, U.S. farmers are finding themselves caught in the crossfire of current trade wars. Because of the global nature of their enterprise and the country's role as an exporter of goods, the farming sector has been an easy target for retaliatory measures in response to U.S. President Donald Trump's push to implement new tariffs. The sector has publicly voiced its displeasure with these policies and noted the damage it has already started to cause.
Yet, many of the country's agricultural producers come from states that supported Trump during his election in 2016. As the midterm elections approach in November, the administration will want to hold on to these voters (especially in key states such as Wisconsin, where, even though their numbers are small, they can still influence outcomes). That, at least in part, explains the government's recent decision to offer $12 billion in emergency aid to farmers affected by trade spats. The mix of direct payments, government purchases and development of new export markets is meant to offset the damage that retaliatory tariffs have caused. But the plan has already faced criticism from legislators and farmers; the latter group suspects it is a temporary pre-election solution that does not address any of the more profound problems farmers are beginning to face. Despite the prominent role agriculture has taken in the early days of renewed EU-U.S. trade talks, longer-term aid, which will become more and more necessary if other disputes continue, will be harder to come by.
Though its role in U.S. trade negotiations will not disappear overnight, the agriculture sector has become increasingly vulnerable to changes in trade policy, despite rhetoric from the administration saying otherwise. The underlying factors, especially consolidation and mechanization, mean that since a smaller group of individuals has a vested interest in farming and the financial means to influence policy, the political heft of the United States' mighty agricultural sector will slowly fade.