Craig Griffune
Appearances
Planet Money
What happened to U.S. farmers during the last trade war
Once President Trump decides that the government needs to step in, he turns to the USDA. And he's like, we are going to need a program to keep farms from going bankrupt. Rob Johanson was at the USDA at the time, and he remembers all of this pressure coming from the White House.
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What happened to U.S. farmers during the last trade war
Then they remember that they've got that special pot of money, the Commodity Credit Corporation, that sweet, sweet CCC cash that's available to them.
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What happened to U.S. farmers during the last trade war
Basically, they were going to need to pull a lot more money out of that fund than usual to reimburse the farmers. But this was an emergency, and they quickly decide that the CCC money is their best option.
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What happened to U.S. farmers during the last trade war
What they had was about $12 billion in the CCC to work with. But they don't want to spend all of that at once. And who knows how long these trade wars are going to go on for.
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What happened to U.S. farmers during the last trade war
All this courting of international buyers in general has paid off. Iowa exports billions of dollars in soybeans and other crops every year.
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What happened to U.S. farmers during the last trade war
So Rob and his team at the USDA make some detailed calculations. Which crops are affected? By how much? How much money do we have? Who is eligible? And they come up with a formula. And they use it to launch a program that gets a fun name, the Market Facilitation Program. And farmers apply for funds at their local USDA office.
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What happened to U.S. farmers during the last trade war
Finally, in January 2020, the U.S. and China strike a deal. It's known as the Phase One Trade Deal. There is a lot in it, including reducing tariffs and a commitment from China to buy more stuff. And for Rob and the farmers, this includes promises from China to buy more from American farms.
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What happened to U.S. farmers during the last trade war
Ag products like corn and pork and soybeans. And with that, the trade war ends with a deal.
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What happened to U.S. farmers during the last trade war
What did people think of the market facilitation program, the program that sent checks to farmers? Well, some government watchdogs and politicians and farmers have criticized the program. Some felt that there wasn't enough transparency or that the decision to distribute this much money should have been left to Congress.
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What happened to U.S. farmers during the last trade war
In the end, hundreds of farms did go bankrupt. Small to medium farms were hit the hardest. But it would have been way worse without the emergency CCC funds. So how did some of the farmers feel about it?
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What happened to U.S. farmers during the last trade war
It's a Band-Aid. Yeah, the Band-Aid did not fix everything. And also, something fundamental had been lost. There has been lasting damage now to the trade relationships that had been years in the making.
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What happened to U.S. farmers during the last trade war
And some of the deals between American farmers and Chinese buyers never came back.
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What happened to U.S. farmers during the last trade war
Now, this time around, in the 2025 trade war, the retaliatory tariffs have been much less targeted. So many industries are taking a hit, from farming to manufacturing to energy. And if things get really bad, it wouldn't be possible to effectively bail them all out. But bail out or not, trade wars have a way of permanently changing your economy, sometimes causing irreparable damage.
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What happened to U.S. farmers during the last trade war
That has meant less demand for LeVon and Craig's grains. And that really drove down the price per bushel that they can earn.
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What happened to U.S. farmers during the last trade war
Also, a special thanks to Benga Adjolori, Grant Gerlach, and Joanna Broder. I'm Jeff Guo. And I'm Amanda Aronchik.
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What happened to U.S. farmers during the last trade war
Soybeans were down, too. Basically, neither crop would net a profit if they sold their harvest on that day. But they do have a way to wait out the market's volatility, at least for a little while.
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What happened to U.S. farmers during the last trade war
When the price gets too low, they have these big storage bins. They're like two stories high, and they store thousands of bushels of corn or soybeans or whatever, with some air blowing in to keep the crops fresh and dry.
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What happened to U.S. farmers during the last trade war
A little over a week ago, on May 5th, LaVon and Craig were babysitting two of their six granddaughters.
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What happened to U.S. farmers during the last trade war
And I'm Jeff Guo. The U.S. exports billions of dollars worth of agricultural products every year. We're one of the world's largest ag exporters. But now our exports are caught up in a trade war with China and they don't want to buy lots of our things, including our soybeans and pork and corn.
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What happened to U.S. farmers during the last trade war
This is Rob Johanson. He's the former chief economist for the Department of Agriculture, a.k.a. the USDA. He says there are a lot of innovations coming out in the lead up to the 80s that are helping farmers produce more food on the same amount of land.
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What happened to U.S. farmers during the last trade war
Yeah. Meanwhile, the U.S. was in fact busy courting a quite large trade partner, China. The two countries had stopped trading with each other during the Cold War. And in 1979, the U.S. and China officially opened their borders to each other again.
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What happened to U.S. farmers during the last trade war
Levon and Craig are farmers. Craig is the fifth generation to live on this family farm. It's pretty big, 1,100 plus acres just north of Des Moines in Iowa. And in addition to raising chickens, they have pigs and sheep and turkeys and also something called limousine cattle.
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What happened to U.S. farmers during the last trade war
Loved it. This is what's great about trade. Each country doing what it's good at. And we are apparently really, really good at growing soybeans. And by the early 2000s, China starts buying a lot of our extra soybeans.
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What happened to U.S. farmers during the last trade war
And by 2015, the relationship hits a major milestone. For the first time ever, China becomes the U.S. 's biggest trade partner. Canada and Mexico, they fall to second and third place.
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What happened to U.S. farmers during the last trade war
So at the start of 2018, during President Trump's first administration, he opts not to arbitrate these disputes the normal way by going to the World Trade Organization. Instead, Trump uses his favorite tool, tariffs. He puts tariffs on a bunch of Chinese products, including flat screen TVs, medical devices and batteries. The idea is that the tariffs will make these Chinese products more expensive.
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What happened to U.S. farmers during the last trade war
So Americans will buy less of them.
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What happened to U.S. farmers during the last trade war
Rob says there's one story that shows just how quickly the tremors of the 2018 trade war were felt around the world. days after China announces the retaliatory tariffs.
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What happened to U.S. farmers during the last trade war
Yeah. And presumably now the buyer in China does not want to pay the extra fee.
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What happened to U.S. farmers during the last trade war
They are just trying to find some port where some buyer will take this grain off of their hands.
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What happened to U.S. farmers during the last trade war
Exactly, exactly. And it is clear to Rob and the others at the USDA that this is not just going to be a problem for sorghum. China is likely going to put more retaliatory tariffs on all sorts of other U.S. crops and livestock.
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What happened to U.S. farmers during the last trade war
Now, American farmers on those American farms, they are, of course, getting a little worried as they follow everything that is happening.
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What happened to U.S. farmers during the last trade war
Meaning that China was buying less and less and less from U.S. farmers. And so the prices of two of Aaron's main crops, soybeans and corn, they were dropping.
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What happened to U.S. farmers during the last trade war
Aaron has two kids. At the time, they were both in college. He wasn't sure if they'd come back to work on the farm. And it is a lot harder to convince your kids to come back when crops are selling for a fraction of what they used to sell for. It just doesn't seem like a viable job.
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What happened to U.S. farmers during the last trade war
And as the trade war was escalating, Aaron says the farmers were starting to get really worried because even though this fight wasn't initially about agriculture, China had targeted them. The farmers, they were collateral damage.
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What happened to U.S. farmers during the last trade war
Levon and Craig sell their corn and soybeans to a food processor. That processor exports to international buyers. So, like many in the farming industry, Craig and Levon have helped court those international trade deals.
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What happened to U.S. farmers during the last trade war
And the Trump administration could see that the farmers were in trouble. And they didn't want a bunch of their voters going bankrupt as a result of their trade war.
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What happened to U.S. farmers during the last trade war
Trade payments, sometimes called trade aid, which rhymes, sometimes called trade mitigation payments. That one doesn't rhyme. Anyway, in April of 2018, right after China retaliated against the U.S., Trump instructed the secretary of agriculture to come up with a plan.
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What happened to U.S. farmers during the last trade war
The Commodity Credit Corporation. Basically, this fund was created way back in the 1930s under Franklin Delano Roosevelt during the Depression and the Dust Bowl years when drought was devastating the Midwest.
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What happened to U.S. farmers during the last trade war
FDR had journeyed to the Midwest to look at the country's farms.
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What happened to U.S. farmers during the last trade war
And farms were going bankrupt. The president thought that the markets for grain and livestock were vulnerable to these natural or man-made threats. And so leaving food up to the free market might mean that people wouldn't have enough to eat.
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What happened to U.S. farmers during the last trade war
Coming up after the break, we fast forward to 2018 when the trade war hits American farms and the government steps in to try and save them using the CCC.