Farmers Swept Up In Trade Wars Remember '80s Grain Embargo

Aug 16, 2018
Originally published on August 16, 2018 12:22 pm
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NOEL KING, HOST:

Corn and soybean farmers are getting ready for harvest season, and many of them are anxious this year. Their crops are worth a lot less now than they were before the trade war started, and they worry that things could get worse. Frank Morris of member station KCUR has been out talking to farmers, and many of them say they've been through this before, and it ends badly for both farmers and taxpayers.

FRANK MORRIS, BYLINE: Farming is largely a business passed down through generations, so farmers like Duane Hund, on his spread in the Kansas Flint Hills, tend to have long memories.

DUANE HUND: We call this tractor grandpa because back in 1937, my dad and my grandfather bought this tractor. It was new. They purchased this tractor for $600, and they traded four mules to get it.

(SOUNDBITE OF TRACTOR RUNNING)

MORRIS: The tractor was more reliable than draft animals. And farmers love reliability. Vagaries of weather can make or break them, and so can markets. American farmers have worked for decades to lock in global customers for the food they produce. Hund says trade wars threaten that work and remind him of what lots of farmers consider a catastrophic mistake by Washington nearly 40 years ago - the Soviet grain embargo.

(SOUNDBITE OF ARCHIVED RECORDING)

JIMMY CARTER: The Soviets must understand our deep concern.

MORRIS: President Carter wanted to punish the Soviet Union for invading Afghanistan.

(SOUNDBITE OF ARCHIVED RECORDING)

CARTER: Trade with the Soviet Union will be severely restricted.

MORRIS: Carter slashed exports of U.S. wheat and corn to the USSR, and prices tumbled. Duane Hund remembers watching the bottom fall out.

HUND: Prices on the border trade for grains went down the limit for several days. Of course, we were all just stunned by it and didn't know what to do.

MORRIS: But other countries did. Argentina and Brazil, later Canada and Australia, stepped in to sell grain to the Soviets. Hund says the embargo missed its target.

HUND: What it did was, though, it sent a clear signal to the world that we can't depend on the United States to be a reliable trading partner.

MORRIS: Hund says the fallout lingered for years, as investment in grain orders flowed to places like Brazil that have since become formidable international competitors. Many farmers think the 1980 Soviet grain embargo contributed to the worst farm crisis since the Great Depression.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED PERSON: We're looking for a lot of money to come in today, folks, for a great cause, so get on the phones now. That's 1-800-FARM-AID.

MORRIS: Soft commodity prices, plummeting land values and sky-high interest rates drove thousands, like Marshal Ulrich, out of farming.

MARSHAL ULRICH: I hated to - I hated to give it up. It was a dream, you know, to make farming my career. But it just didn't work out that way.

MORRIS: In 1985, Ulrich sold most of his farm equipment. He worked full time as a grade school custodian for the next 25 years.

ULRICH: I mean, I was tickled to death to get that job.

MORRIS: And now the implications of losing export markets are back on farmers' minds. Forty percent of them - polled by Farm Futures, a trade publication - said that Trump trade policy is doing permanent damage to U.S. agriculture. You can count Paul Penner, past president of the National Association of Wheat Growers, among them.

PAUL PENNER: Once this trade war ends, how do you regain trust? How do you regain market share? How do you rebuild the agreements that were thrown away? That's the difficult issue.

MORRIS: Many farmers do appreciate Trump's opposition to environmental regulations and the tax cuts he signed. A lot of them remain hopeful that trade talks will produce favorable, new agreements. But farmers like Duane Hund hate the uncertainty.

HUND: There's probably things that may come out of this that we don't even know and can't think through right now, and that's what bothers me.

MORRIS: The Soviet grain embargo offers some political lessons, too. All the farmers in this story - Hund, Ulrich and Penner - voted for Jimmy Carter - a farmer, after all - the first time he ran for president. Four years later, they all voted against him.

For NPR News, I'm Frank Morris.

(SOUNDBITE OF BALMORHEA'S "BEHIND THE WORLD") Transcript provided by NPR, Copyright NPR.