Trade War Could Have impact On Indiana’s Farmers

By Abrahm Hurt
TheStatehouseFile.com

INDIANAPOLIS — Phil Ramsey, owner of Ramsey Farms in Shelbyville, is nervous about how a potential trade war with China would affect him.

In March, President Donald Trump announced he would impose tariffs on Chinese steel and aluminum. China responded by announcing it would target American products, such as pork, beef, cars and soybeans with tariffs.

Tariffs could carry large consequences in states like Indiana that largely supported Trump in the 2016 general election.The potential tariffs have raised concerns in the farming community because it is unknown how they would affect the price of crops at a time when they are already down.

Trump has pledged to help farmers, but he has yet to offer any specific solution of plan.

“China is our number one importer of soybeans, and one-third of all soybean production in the United States goes to China,” Ramsey said. “As you drive down the road and look at our fields, every third row is going to be put on a boat and go to China.”

Ramsey farms on a corn and soybean rotation. Fifty percent of his crops are soybeans, and he said at least half of his income comes from that product. They are on 1,800 acres of land.

Soybeans are the second largest commodity in Indiana, totaling $2.84 billion in sales in 2016, according to United States Department of Agriculture’s National Agricultural Statistics Service. Indiana ranked fourth overall in the nation in soybean production and exports in 2016, sending $1.7 billion of the product overseas.

Bob White, director of national government relations for Indiana Farm Bureau, said a potential trade war with China could be disastrous to Indiana and United State farming, especially given the current state of agriculture.

“We’re off 50 percent of net income from five years ago according to Purdue and USDA,” White said. “We’ve got a down ag economy and that will make this outlook just look even bleaker.”

Ramsey said the proposed tariffs are just another uncertainty like the weather, but they could have a large impact on the American farmer.

“When you throw something this big into the market, we can have some pretty wide, dramatic swings in the price and you really don’t know what to do.”

Ben Gavelek, communications director for the Indiana State Department of Agriculture, did not have an answer as to how the tariffs would affect agriculture products like soybeans.

He said the department is still in the process of determining the impact of the tariffs on Indiana agriculture.

Ramsey said he supported tariffs that are actually necessary.

“I understand that they are needed to even out trade issues, monetary issues and sometimes they’re maybe needed to help level the playing field,” he said. “But when they’re used as a retaliatory measure, that’s really when it becomes a difficult problem.”

He also said he was concerned about who would buy soybeans from the U.S. if China does not because South America already sells more beans to China than the U.S. does.

“The last thing you want to do is lose market share to anybody else,” Ramsey said. “It doesn’t matter what kind of business you’re in, you don’t want to lose market share. It’s always much more expensive to get a new customer than it is to take care of your current customers.”

Dr. Laura Merrifield Wilson, professor of political science at the University of Indianapolis, said even though it might be far-fetched, a trade war with China could affect House and Senate elections in Indiana.

Wilson said voters might react if they see the tariffs have a negative impact on the local economy.

“If people make that connection and they understand that when they’re voting, it could adversely impact the Republican candidates running.”

Abrahm Hurt is a reporter for TheStatehouseFile.com, a news website powered by Franklin College journalism students.