‘Huge concern’: Minnesota farmers see big disparity in trade war compensation

Minnesota farmers say they don’t understand why they’re getting a fraction of the federal government aid that farmers in other states are recouping as compensation for lost sales because of the trade war with China.

Farmers in some parts of the U.S. are getting up to $150 per acre in federal payments. The payouts in Minnesota vary, but they’re all significantly lower: southern Minnesota farmers are seeing $60 to $70 per acre, while some northern Minnesota farmers are only getting $15 an acre, agriculture industry officials said.

“We have a huge concern with the way it was done this time around,” said Joe Smentek, executive director of Minnesota Soybean, which represents soybean farmers across the state. “We don’t know how that number was created. All we know is, we don’t think that we’re seeing the actual damages being accounted for when we see these payments.”

The payments aren’t based on a farmer’s crops. Instead, they’re based on where the farmer lives. The federal government has created estimates for how much the trade war has impacted particular counties.

The government aid totals $16 billion and is being distributed now after an application period in July. 

Asked about the disparity in payments, Gov. Tim Walz said he wasn’t aware of that particular issue. Instead, he said the matter ought to be resolved by ending the trade war.

“The attempt to make people whole through these payouts is not a good way to do it,” Walz said.

The trade war between President Donald Trump and the Chinese government has led to shrinking soybean demand in China, the largest market for U.S. exports. One in three truckloads of U.S. soybeans goes to China, Minnesota agriculture industry leaders said. 

Minnesota farmers have grown frustrated with the trade war, which comes on top of already depressed commodity prices.

Weather has also played havoc with crop progress this year. Almost all crops are behind last year’s development – some significantly so, according to data from the U.S. Department of Agriculture

The federal payments won’t come close to making farmers whole, said Brian Thalmann, a fifth-generation corn and soybean farmer in Plato. Thalmann is also president of the Minnesota Corn Growers Association.

Government aid of $60 an acre is less than 10 percent of the $800 that an acre of corn should be worth, he said. Still, it’s something.

“It’s a definite help, because it creates some cash right now that we’re not able to get through the market,” he said. 

Thalmann said he’s concerned that the payments would be viewed by the general public as bailouts. Farmers didn’t start the trade war, he argued.

“There’s not a farmer around that won’t say they would much rather get all their value from the marketplace, but when there’s extreme disruptions because of the tariff situation, getting a little bit back is appreciated,” Thalmann said.

The Chinese government last week announced that it would ease its tariffs on soybeans imported from the U.S. ahead of the next round of trade negotiations between the two countries.