[January 16, 2018]
By Cathy Zhang and Pamela Tsai, America Daily
President Donald Trump became the first sitting President to address the American Farm Bureau in 25 years on Jan. 8. 2018. The speech could be viewed as a big “thank you” to rural America, which was crucial to the success of Trump’s presidential campaign. In the speech, the president delivered long-overdue recognition of the American farm industry and support for the people behind it.
“We know that our nation was founded by farmers. Our independence was won by farmers,” said the president. “And throughout our history, farmers have always, always, always led the way.”
Victor Davis Hanson is a Senior Fellow at the Hoover Institution, Stanford University and a professor of Classics Emeritus at California State University, Fresno. In a phone interview, he echoed President Trump’s remarks. “We produce more than we can eat and we produce so efficiently,” he said. He noted that agriculture is a highly competitive and export-driven industry that not only bolsters national security but also produces lots of foreign exchange for the US economy.
According to the 2012 USDA Census of Agriculture, there are 3.2 million farmers (about one percent of the total US population) operating 2.1 million farms covering 915 million acres producing food that feeds, not only Americans, but also people in Canada, Mexico, Europe, China, Japan, and other countries.
“They need our food and they like our products, which they don’t have and can’t grow,” said Hanson, who is both a scholar and a farmer.
He is the fifth generation to live in the same house on his family’s farm in California, where he grows almonds and has an orchard and vineyard.
He owns 45 acres of almond trees, an all-time favorite export to other countries.
“We (Americans) have 1.2 million acres of almond farms. We only need 200,000 acres for Americans. There are a million acres of almonds that have to be exported to a place that can’t grow them, such as Canada, Mexico, China, and Japan.”
“We are more competitive than other industries,” Hanson said. While countries like China place tariffs on other US products to prevent competition against their own industries such as steel, auto, aluminum, they don’t put tariffs on our food. “No country can ever boycott us (on food).”
When it comes to trade, Hanson said, “Agriculture is a lucrative industry for the US economy and doesn’t get hurt as other industries.”
With regard to the executive order that President Trump signed to push for greater internet access for rural America via broadband, Hanson told our reporter that it is certainly well-appreciated.
Speaking from his farmhouse in rural California on his cellphone, Hanson said he has no access to high-speed internet and can’t have a static-free conversation over the landline. He has to use a satellite dish, which is slow, cuts off all the time, and is often affected by the weather.
AT&T and Verizon won’t come to string cable there because it doesn’t produce the same level of return on their investment as in big, densely populated cities.
Hanson thinks the following actions by the Trump administration—on top of the tax reforms already signed that reduce corporate tax rates to 21%—are central to sustaining the farm industry’s contribution to the economy and competitiveness in the global marketplace:
1) Inheritance tax cuts, which makes it easier for a farm business to be passed on to the next generation. Due to high inheritance taxes in the past, children of farmers don’t have an economic incentive to inherit the farm business. This has resulted in the rising age of farm operators.
In his Jan. 8 speech to the American Farm Bureau, the president said, “From now on, most family farms and small business owners will be spared the punishment of the deeply unfair estate, known as the death tax— so you can keep your farms in the family,” Trump said. “That was a tough one to get.”
2) The new tax law regarding the write-off of equipment.
“All American businesses, including American farmers, will be able to deduct 100% of the cost of new equipment in the year you make the investment,” Trump said in his speech.
3) An executive order to deregulate the farm business. Hanson said the past regulation enforced by the Obama administration—The Waters of the United States (WOTUS) rule— penalized farm businesses on things beyond their control.
Additionally, Hanson expressed the hope that the speed of innovation can be accelerated for the farm industry as a way to solve the pressing issues of labor costs. As labor becomes expensive and unstable, it forces farmers to mechanize the work. Otherwise, it will increase the consumer price for the crops that are labor-dependent, such as grapes and vineyards, according to Hanson.
Commenting on the nature of the farm business, Hanson said it is a very sophisticated business that requires a lot of knowledge. Successful farmers have to be well-read and informed. They follow politics closely and they are concerned about a wide range of topics in the economy and national debates, such as property rights, sanctuary states, and tax reform.