On Tariffs and Farm Subsidies

An Op-Ed by Chuck Schmidt, former farmer, educator and state Representative

The recent news about the Trump Administration providing $11 billion in subsidies to American farmers raises many questions. We know that after the administration imposed the tariffs against China in the spring of 2025, China stopped importing American soybeans and began relying on South American suppliers. Then, in late October, because of the damage to American farmers, Trump reduced the tariffs and China agreed to import some American soybeans. However, current soybean purchases by China are way below previous purchases leading to lower prices at the market. This comes as the soybean harvest saw near record yields which also contributed to depressed prices. China also normally imports a lot of milo from the U.S. and with a record American crop and low exports, that price is also depressed.

At the same time this administration sent $20 billion to Argentina to prop up their economy and as a result Argentina reduced its tariffs on China. This made Argentine soybeans cheaper than American, so China increased its imports from Argentina, reducing the amount they would need from the United States. If all this seems rather complicated you are correct. The result of uncertainty and constant changing of tariff rates interferes with normal exportation and importation of goods between countries.

Many people who do not understand farming balk at the prospect of farmers receiving subsidies for their commodities. I am not one of those because I experienced the necessity of subsidies along with strong exports to keep family farms profitable and to help keep the resulting food prices reasonable for consumers. I grew up on a dairy and grain farm in Western Kansas. After college I returned to the farm in partnership with my parents for 12 years before I left for a career in education. This gave me a pretty good perspective on the effects of export markets and farm subsidies. I also saw the benefit of good farm programs such as subsidized crop insurance.

Farming is a difficult business. It is hard labor and you are at the mercy of the weather. Prices are determined for you. American farmers produce so well that we always seem to have a surplus. For years farmers pleaded with the government to improve exports to help ensure profitable prices. When exports were strong our family farm was able to pay our bills and make a reasonable profit. But every time the government intervened in the market, prices dropped. I remember when Russia was our best market for wheat. Then they invaded Afghanistan and we embargoed wheat exports to Russia. This depressed wheat prices drastically. I am not saying the embargo was not justified, but every time this happens it hurts farmers, and then it hurts all taxpayers when the government pays out subsidies.

There are ways that government policy can help farmers and not unduly hurt other taxpayers. This has been done by using policies that protect against overproduction and the subsequent lower prices. I remember when I was farming in the 70s and 80s there were payments for leaving some land lay idle. This helped keep production at a level that kept prices profitable for farmers. During that time, I heard some farmers complain about government intervention. They said we should let farmers plant fencerow to fencerow. That was tried for awhile and the resulting surplus depressed prices on wheat to the point that it wasn’t profitable. I was surprised one day when I was in the Allotment Office. A neighboring farmer who constantly railed that the government should get out of agriculture was happily picking up his allotment check.

 I also remember how the government and the milk cooperatives helped dairy farmers by controlling production to prevent huge surpluses. Farmers were granted a base amount of milk they could produce at a higher price which occasionally included some government subsidy. But any milk you produced over that amount received a much lower price. This incentivized dairy farmers to keep their production at a level that paid enough to be profitable. At the same time the government bought up surplus cheese and milk and gave it to schools and poverty programs. This all helped keep prices at a reasonable level for farmers and for consumers.

Many who do not understand agriculture are often critical of farm programs. When these programs are run strategically, they are beneficial to both farmers and consumers. But when the government arbitrarily and inconsistently imposes tariffs that destroy export markets for farmers, no one benefits and the taxpayers foot the bill.

So, as a result of this recent tariff war, American taxpayers will now subsidize American farmers to the tune of $11 billion to recover the lost revenue from foreign markets that have been lost. Wouldn’t it have been wiser to not impose tariffs in the first place and then not have to pay out subsidies to farmers?

Let’s use some sense in developing our farm programs and stop the chaotic tariff war that is hurting everyone. Farmers would rather not have subsidies to help bail them out from depressed prices. They want exports to help keep their prices profitable. Developing exports and providing crop insurance and reasonable subsidy support will allow farmers to prosper while keeping food prices affordable. 

CC BY-NC-ND 4.0 by Chuck Schmidt. Mr. Schmidt s a former farmer and educator. He served one term in the Kansas House and currently lives in Wichita. He is an officer in the Kansas Silver Haired Legislature. He and his wife, Mary, have seven grandchildren. Opinions expressed are his own and do not necessarily representative the opinions of the administrator or other members of the Harvest Blue cooperative website. Banner image of “Classic Kansas field of waving wheat” by Carole M Highsmith, taken between 1980 and 2006 and donated to the Library of Congress for the public domain; LOC item 2011632245.