Two headlines last week about the income of Iowa farmers might have caused some confusion.
One was the news that Iowa farmers have received more money than those in any other state this year from President Donald Trump’s bailout package. The payments are intended as damage control while trade disputes with China and other countries diminish farmers’ profitability.
That news came about the same time data from Iowa State University showed that nearly half of Iowa farmers are struggling to pay their bills.
That, no doubt, fueled the fires of every person with an opinion about farmers and the breaks they get from the government.
“Farmers just won’t stop complaining,” some of the world’s problem solvers likely mused, gathered with cronies over cups of coffee.
Before anyone suggests farmers are getting rich off government handouts, let’s take a closer look at the ISU study.
Just five years ago, Iowa farms with “vulnerable liquidity ratings” stood at 31.3%. Now that number has climbed to 44%. Liquidity refers to a farmer’s ability to access cash for basic farming needs such as seeds and fertilizer.
Average net farm income in Iowa topped $243,000 in 2012, but sat at less than $59,000 in 2018, according to the report. How many businesses could sustain a 76% drop in income?
The federal aid to farmers was a positive thing, but it’s unlikely any farmers were made whole by the support. The bottom 80% of farmers who received payments averaged about $5,100. While that might plug a hole in a budget, it will hardly ensure farmers’ stability.
And trade isn’t the only factor detrimental to farmers. Ask any farmer you bump into how difficult the weather has been this year. Torrents of rain made it tough to get planting completed. Now, more than a third of farmers say their grain corn has yet to be harvested.
As Dubuque Country Farm Bureau President Craig Recker put it, “everything that goes on in the world affects us, from weather to trade disputes.”
If the federal payments program was intended as a Band-Aid to lighten farmers’ load during a rough patch, that’s one thing. But, now in its second year, farmers are getting less in payments than they did the year before. Meanwhile, the impact of a lost pathway for the sale of grain is still broad.
Agriculture is one of Iowa’s chief employment engines, particularly in rural communities. Agricultural production and processing industries represent 10.3% of the total state economy. What happens to farmers, happens to Iowa.
While it’s good to see farmers getting a share of the federal supplemental aid, Iowans should know the road ahead for most farmers remains challenging.