Area farmers hit by rain, trade war have lots of questions about bailout

 

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MAHOMET — Last month, the U.S. Department of Agriculture announced a $16 billion aid package for farmers, but some area farmers still aren't sure what it means for them.

"I've read some about it, but I still have a lot of questions," said Paul Berbaum, who farms west of Champaign.

And Jeff Fisher, who farms near Tolono, said he's been too busy to read much about the bailout, which is supposed to help farmers hurt by the trade war.

"I don't know much about it. We're not even done planting corn and we haven't even started beans, so reading time is limited," Fisher said. "All I'm doing is going from field to field scouting, trying to find a field dry enough."

The aid package announced last month follows a $12 billion bailout last year that based payments on how many bushels farmers grow, with different rates for different crops. This year's payments will be based on a county rate multiplied by a farm's total plantings, regardless of the crop planted, according to the USDA.

Much of the confusion involves what that county rate will be and how it will be determined.

"We've heard a lot of different things about what could happen and a lot of emails and tweets and news on the internet," Lee Waters, a crop insurance agent with Farm Credit Illinois in Mahomet, told a group of farmers Friday.

"We don't know that rate yet. There's a lot of rumors on how they're establishing that rate."

Because the payments will be based on the county rates, the payments shouldn't affect what farmers plant.

But the USDA also hasn't said if the payments would be made to farmers who are unable to plant this year because of wet fields.

"That creates an incentive to plant instead of to prevent-plant for your corn acres," said Scott Irwin, an agronomist at the University of Illinois. "So there's a potential distortion of market incentives."

In East Central Illinois, farmers have until June 5 to get their corn in before their insurance starts dropping a percent each day off their coverage guarantee.

After June 25, farmers who weren't able to plant will receive only 55 percent of the coverage their policy guaranteed.

Usually area farmers don't have to worry about this, but with the wet spring, just 35 percent of corn has been planted in Illinois, far less than the 95 percent that is typically planted at this point.

"I've never even been close to having to deal with prevented-planting," Fisher said Wednesday. "To tell you the truth, I haven't paid much attention until we got the rain last night. Now I'm forced to pay attention."

He said raising less than 55 percent of what is expected "would take a big disaster" and "wouldn't come close to covering expenses."

Berbaum said his corn is raised on contract for a seed company, so he doesn't have crop insurance.

"I'm going to plant no matter what," he said.

Most of his corn is planted, Berbaum said, and beans can be planted until June 20 before coverage starts dropping.

At Friday's Farm Credit meeting, Waters walked farmers through what their options are after June 5, whether that's leaving a field with no crop or planting soybeans where they had planned to plant corn.

"In Champaign County, it's very rare for this to happen in the last several years," Waters said. "Most farmers have never had this happen with prevented-planting."

Probably 100 people showed up to the meeting, which came after yet another storm Thursday night.

"I knew we'd have a big crowd," Waters said. "I'm not surprised. There's a lot of information people are needing."

Regardless of how much the trade aid payments will amount to, they're expected to be significant, as last year's were.

"It did not get specifics on payment rates, which gives us a chance to make guesses, and it looks like it might be $50 an acre, so $50,000 for a thousand acres," Irwin said. "It could be very significant."

The first payment is expected to be made around July or August, Waters said, and the second and third payments will come later as conditions warrant, such as if there's still not a trade deal and prices are still low.

Berbaum said the payments are "better than nothing, but in my opinion, it's only going to make matters worse in another year. There's way too many beans, and people are going to plant beans. They're going to have to plant to get aid."

He and Fisher both said they'd prefer a trade deal to a bailout.

"It's going to be helpful, but the farm economy is going to be in trouble, no matter what they do, if they don't fix the trade," Berbaum said.

"I'm disgusted that it's even needed to be talked about, but Trump is playing hardball," Fisher said. "He's trying to make progress on stealing intellectual property and many other trade advantages that China has taken over the decades that presidents before Trump should have addressed, and Congress and the Senate. They just let it go, and China got to take advantage of us.

"I understand what he's trying to do, but it sure is hurting," Fisher added. "I thought it would last a couple months, but we're coming up on a year."

And Irwin said that while farmers have been hurt by the trade war, others have also been affected.

"Corn and soybean farmers, particularly soybean farmers, have experienced real damage from President Trump's trade war with China, so there is a case to be made for them to be compensated," he said. "But why soybean farmers and why not car buyers. ... There's not enough money to pay everyone, so who gets paid?

"I don't think it's controversial to say that President Trump wants to reward his loyal farm voters," Irwin said.