2024 Election Results Impact on Agriculture: Trade, Taxes, and Farm Policy Under Trump
Nov 11, 2024
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The recent election results, which saw Donald Trump returning to the presidency, have significant implications for the agricultural sector in the United States. As farmers and agribusinesses brace for changes, analyzing the potential effects of Trump's policies on agriculture is essential, particularly in the Midwest, where farming is a critical economic driver.
With Republican leadership now in control of the presidency, the Senate, and the House of Representatives, farmers, ranchers, and agribusinesses can anticipate new priorities, opportunities, and challenges. Here’s an in-depth look at the 2024 election results' impact on agriculture.
Key Areas of Impact
1. Trade Policies and Tariffs
The Biden administration made minimal progress on agricultural trade policy, leaving critical negotiations and market expansion efforts largely stagnant over the past four years. Trade policy is now likely to be a central focus, with the Trump administration seeking to renegotiate existing agreements or establish new trade deals. This could open new markets for U.S. agricultural products, helping boost commodity prices and providing stability for farmers reliant on exports.
On the other hand, one of the most pressing concerns for farmers is Trump's approach to trade and tariffs. During his first term, Trump implemented substantial tariffs on imports, particularly from China, which led to retaliatory measures that adversely affected U.S. agricultural exports. The USDA estimated a $27 billion decline in foreign sales due to these tariffs, with states in the Midwest experiencing significant losses in soybean and corn markets.
Trump's campaign indicated a continuation of aggressive tariff strategies, proposing increases up to 10% on most imports and more than 60% on Chinese goods. This could lead to renewed trade tensions and further disruptions in agricultural markets, particularly for commodities heavily reliant on international trade.
Tariffs could create short-term challenges for agricultural exports, aiming to secure stronger, long-term trade deals that benefit American producers. Programs like the Market Facilitation Program (MFP) could continue supporting farmers affected by retaliatory tariffs.
2. Farm Bill Negotiations
The Farm Bill is a critical piece of legislation that impacts various aspects of agriculture, including subsidies, conservation programs, and food assistance. With the current Farm Bill having expired, Trump’s administration must prioritize its renewal. Farmers are advocating for a new bill that addresses inflationary pressures and supply chain issues exacerbated by the pandemic and recent economic instability.
A Farm Bill under Republican leadership will likely reflect priorities aligned with reducing government intervention and emphasizing market-driven solutions. While traditional safety nets like crop insurance and commodity support programs are expected to remain intact due to bipartisan backing, there may be less focus on expanding conservation initiatives or funding climate-related programs. Instead, we could see increased support for programs that bolster rural development, such as broadband expansion and infrastructure improvements, alongside efforts to streamline program delivery and reduce bureaucratic red tape. The bill may also revisit work requirements for nutrition assistance programs like SNAP, a frequent Republican priority, which could spark debates and influence the overall shape and timeline of the legislation. For agricultural producers, these shifts may mean a greater emphasis on economic resilience and market opportunities over regulatory or environmental initiatives.
The American Farm Bureau Federation has emphasized the urgency of modernizing the Farm Bill to support rural economies effectively. Without timely action, farmers may face increased financial strain as they navigate ongoing market volatility.
3. Environmental Regulations
During my time as Director of Environmental and Regulatory Affairs at Nebraska Farm Bureau Federation, the Environmental Protection Agency (EPA) implemented numerous regulatory changes that significantly burdened agriculture. One of the most prominent examples is the agency's ongoing reinterpretation and expansion of the Waters of the United States (WOTUS) rule, which has brought uncertainty and increased compliance costs for farmers. This overreach has extended federal jurisdiction to include ephemeral streams and low-lying areas, leaving producers vulnerable to fines and permitting delays for routine farming activities.
Additionally, the EPA has introduced stricter pesticide regulations and endangered species reviews, which have complicated access to critical crop protection tools. These actions have created a challenging environment for producers, forcing them to navigate complex, often unclear, regulatory frameworks that impede their ability to operate efficiently and sustainably. As a strong advocate for Nebraska's agricultural community, I have seen firsthand the strain these policies place on our farmers and ranchers and the need for balanced, practical solutions that protect both the environment and agricultural livelihoods. Trump's administration is expected to reverse many of the environmental regulations implemented during Biden’s presidency.
Looking ahead, there is hope that policy adjustments under new leadership will restore balance, fostering a regulatory environment that supports both productivity and environmental responsibility and those in agriculture to continue providing food, fuel, and fiber for a growing population.
4. Labor Market Dynamics
Labor shortages have been a persistent issue in agriculture, particularly as immigration policies tighten. Trump's past administration took a hardline stance on immigration, which could be expected to continue. This may further exacerbate labor shortages in farming sectors that rely heavily on immigrant workers.
Farmers are urging clear policies that ensure access to a reliable workforce while balancing national security concerns. The agricultural community must advocate for reforms that address labor needs without compromising operational viability.
5. Tax Policies Favorable to Agriculture
Trump aims to make the higher estate tax exemptions from the Tax Cuts and Jobs Act (TCJA) permanent. This would maintain the current exemption of $13.61 million for individuals (or $28 million per married couple) instead of allowing it to revert to approximately $7 million per person in 2026. Making the TCJA exemptions permanent would significantly benefit those in agriculture who invest heavily in fixed assets such as land, allowing them to transfer more wealth tax-free to the next generation.
Conclusion
The 2024 elections have ushered in a government focused on deregulation, tax reform, and changes in trade. As Donald Trump retakes office in January 2025, the agricultural sector faces a complex landscape with both promise and uncertainty. Farmers in the Midwest and nationwide must adapt quickly to these changes while advocating for policies that support their livelihoods amidst an uncertain economic environment.
The coming months will be crucial as stakeholders engage with the new administration to ensure that agricultural interests are represented effectively in policy discussions. The outcome of these negotiations will significantly influence farm incomes, food prices, and rural economies nationwide.
Midwest Ag Law is here to help agricultural producers navigate these shifts, from updating estate plans to understanding regulatory changes. Stay tuned for more insights, and don’t hesitate to reach out for personalized legal guidance.
Disclaimer: The information provided in this blog is for general informational purposes only and is not intended to be legal advice. Reading this blog does not establish an attorney-client relationship between you and Midwest Ag Law. You should not act upon any information in this blog without seeking professional legal counsel. Laws may change, and each situation is unique; therefore, consult an attorney for advice regarding your specific circumstances. Midwest Ag Law expressly disclaims any liability concerning actions taken or not taken based on the content of this blog.
