Author: Raja
Topic: Agricultural Policy
Committee: Government and Law
During the 2024 presidential election cycle, one issue Donald Trump consistently brought up through the campaign was the expensive price of staple American foods, like eggs, bread, and milk. He placed blame on the Biden Administration’s failed attempts to reduce food costs, such as through the Inflation Reduction Act and other massive subsidies during Biden’s tenure. This, along with other promises of less regulation and fairer trade, were some of the many reasons why Trump overperformed among farmers and rural voters. As Trump enters his second term, he is faced with challenges that are hampering the American agriculture sector, including COVID supply disruptions and crop losses from climate change. Trump is set on disrupting the status quo. We want to examine how Trump’s policies affect farmers and consumers, and if Trump will accomplish the goals he promised
DOGE USDA
The Trump policy that will have the largest impact on American agriculture is his work with the Department of Government Efficiency (DOGE). Headed by Elon Musk, DOGE is tasked with eliminating “unnecessary spending within the government”. While Musk and his team have hit all parts of the Federal government, I want to specifically look at the impacts that he is having on agriculture. One agency that has significant authority over food production in America is the US Department of Agriculture (USDA). In the fiscal year 2024, the USDA requested over 213 billion dollars from Congress for their operations. Of this budget from 2024, the USDA spent 71% of their budget food assistance programs (SNAP, EBT), 13% on farming and commodity programs (subsidies and grants), 5% on forestry programs and 12% on other programs like research and payroll. However, with the new administration, there have been overhauls on what and how much spending the agency does. One area DOGE is determined to cut is programs related to Diversity, Equity, and Inclusion. As of March, the USDA has cancelled over 100 contracts related to DEI, but they are facing some pushback. A policy that was reversed after public scrutiny was the 1890s Scholarship Program, a scholarship for students pursuing agricultural studies at HBCUs. Another area where the DOGE is cutting USDA budget is with their efforts to climate proof agriculture. During the Biden administration, the Inflation Reduction Act allocated 19.5 billion dollars to “climate-smart” projects, like cleaning the water supply, installing solar panels, and transitioning to clean energy irrigation systems. However, with an executive order and approval from DOGE, Trump blocked more spending for those programs. In the future, it appears that there will be less spending as a whole in the agency, specifically in progressive programs established by previous administrations. DOGE has identified 132 million dollars of excess spending that can be cut, a small fraction of the billions the agency spends. Many speculate DOGE may find cost cutting measures in big ticket programs, like SNAP, WIC, and other food assistance programs that feed millions of Americans. Recently, the USDA rolled back pandemic era initiatives of the Local Food Purchase Assistance (LFPA) and Local Food for Schools (LFS) programs, which allocated over one billion dollars to food shelves across the country, mainly in rural areas that Trump won in 2024. While the administration is looking at reforming food assistance programs, it is unlikely that DOGE will be able to make meaningful cuts, since the scope of those programs is large and budget cuts would be highly unpopular.
Trade
In his first administration, Trump changed the paradigm for American trade by pushing a nationalist agenda through tariffs and trade restrictions. Of his trade policies, Trump introduced tariffs on China and renegotiated NAFTA (North American Free Trade Agreement) to the USMCA (United States Mexico Canada Agreement). This impacted farmers across the country, particularly corn and soybean farmers facing more restrictions than before. Even so, Trump is pushing a nationalist agenda harder in this administration compared to last. Within his first week, Trump announced 25 percent tariffs for all Canadian and Mexican goods. His rationale was that tariffs would raise revenue and put Americans on a level playing field. While predicted tariffs could increase revenue by 90 billion dollars, it pales in comparison to the national deficit and doesn’t take into account job losses from tariffs. The US imports around 80 billion dollars worth of agricultural products from Canada and Mexico per year. The agricultural goods that the US imports the most are tropical fruits, beef, and grain while the most exported goods are soybeans, corn, and dairy products. In response, former Canadian Prime Minister Justin Trudeau and current Mexican President Claudia Sheinbaum announced retaliatory tariffs of up to 25% on staple goods from America, like whiskey, orange juice, and corn. This led to a one-month pause in restrictions after starting negotiations for reducing the fentanyl trade, but a month has passed. Then, Trudeau announced the government would add up to 15% in tariffs on agricultural goods from America. With the volatile state of America’s trade policy, we don’t know what the future holds for agricultural trade.
The impact of Trump’s trade policies will have detrimental impacts on American farmers. For one, the tariffs will reduce the competitiveness of America. Rather than mainly trading with America, Canada and Mexico could seek new trading partners to fill in the gaps. For instance, rather than trading corn with America, Mexico and Canada could look towards countries with growing agricultural industries like Brazil or Argentina. Moreover, Canada and Mexico could prop up current domestic production to supplement losses from the American market. The tariffs will also have a direct impact on US consumers. Imported goods like avocados, beef, and syrup will face a significant price rise, affecting all consumers.
Moving to partners outside of North America, Trump’s new reciprocal tariffs will disrupt the current status quo of global agricultural trade. Announced on April 2nd, Trump put a minimum of a 10% tariff on all trading partners, with specific countries having higher rates. For instance, countries in South East Asia incur tariffs of over 30% and the European Union faces tariffs of 20%. Goods that will be most affected by these tariffs are those that cannot be grown at scale in America, like coffee, tea, and vanilla. Specifically with coffee, tariffs will affect not only producers of raw beans like Vietnam and Colombia, but also countries that manufacture instant coffee like Switzerland and Italy. The World Coffee Portal, a coffee industry organization, finds that overall prices for coffee products could increase by over 20%. While coffee is a fraction of all agricultural commodities traded throughout the world, it highlights the reliance American consumers have on a globalized agricultural trade.
Tariffs will also hurt American farmers through higher operating costs. Current American agriculture requires a plethora of machines and equipment to conduct daily operations. Companies like John Deere, AGCO, and CNH are staples for agricultural equipment that American farmers own. While many companies assemble in the US, specific parts are manufactured across the globe. Tariffs will affect the intermediate goods imported, raising the final manufacturing costs. Other areas in which agriculture will be affected by trade include the greater adversarial relationship with the global trading system. Trump believes that by increasing bilateral tariffs with countries, it would posture a fairer overall trade relationship in the future – even with a 90 day pause on tariffs, this uncertainty will reverberate across the global economy. Like with restrictions on Canada and Mexico, tariffs will negatively impact American farmers and consumers. Tariffs across the board will raise prices by over 25% and reduce the supply of agricultural products in the American market place. Nonetheless, Trump’s reactionary actions will posture the prosperity of all farmers and consumers during his 4 years.
Immigration
Throughout his campaign, Trump repeatedly attacked immigration from the southern border as an evil that could be eradicated with a broad solution, mass deportations. While agriculture and immigration seem distant, their relationship is key to the success of America’s agricultural dominance. The lifeblood of American agriculture is the workers tending fields, butchering cattle, and picking crops. Migrant labor offers farmers affordable workers that don’t have the same protections as other workers. Of the current 22.1 million workers in agriculture, over 86% of agricultural workers are foreign born, with around 45% not having proper work authorization. Of those who are undocumented, the vast majority are originally from Mexico and Central America. States that rely on large proportions of migrant workers are located close to the US-Mexico border like California, Texas, and Arizona. Even though undocumented immigrants are invariably important to agriculture, ICE (Immigration and Customs Enforcement) has started worksite enforcement in processing plants and surrounding towns.
While greater enforcement is a problem, there are possible conflicts in the administration on how to implement these policies. In her confirmation, current Secretary of the USDA, Brooke Rollins, stated that Trump’s deportations goals are aligned with her policies for the USDA, since the deportations are meant to curb crime. She also mentioned how she would, “listen to farmers”, signaling that there is flexibility on immigration policies for agriculture. If hypothetically the administration were to successfully deport all undocumented farm workers, it would cost the US untold amounts of money, totalling over trillions of dollars. This would create many problems. One, farmers would need to supplement labor with American workers, since many of the crops have to be handpicked and hand-sorted, this alone would contribute to labor shortages across all agricultural industries. An almost 10 million person gap will not be closed, since farm labor is strenuous and low pay work. Second, it would be expensive for the US to detain all undocumented immigrants. The detention of a single undocumented person is 68 thousand dollars, multiplied by the 9.9 million undocumented people would total over 676 billion dollars. This is not even considering the loss of agricultural revenue from less laborers. In reality, Trump will not be able to deport all undocumented workers, but mass deportations and more worksite enforcement will create ripple effects for the US economy, with less production and greater labor shortages.
In Summary
The future of American agricultural dominance is determined by the policies that Trump and his administration put forward. While Trump talks about taking drastic actions that will upend agriculture as we see today, resistance from courts and allies in his administration will temper the damage that could be done. His goals of independence and overhaul will be accomplished, but they will be at the expense of American farmers and consumers.