Driving through North Carolina’s countryside this time of year is both good for the soul and a reminder of the importance agriculture plays in our state. The N.C. State College of Agriculture and Life Sciences reports that agriculture adds $83.7 billion to our state’s $538 billion gross domestic product, accounting for 16.9 percent of all jobs. While we celebrate the No. 1 contributor to our state’s economy, we also recognize there are storm clouds on the horizon that threaten not only our farmers but also our state’s economy.
In addition to constant concerns about the weather, our state’s 48,800 farms face the threat of not being able to harvest their crops due to a shortage of labor. The current administration has stated that it supports the continuation of the H2-A visa program for seasonal agricultural workers, but a June 19 CNBC report indicated there might be cutbacks from the 200,000 annual total — a number that has doubled in the past five years — as farmers could not find local workers. The Department of Labor estimates 9.8 percent of H2-A workers find employment in North Carolina and any significant reduction in that number will result in either crops rotting in fields or farmers paying substantially increased costs in harvesting them.
But the larger concern is over the trade wars. North Carolina farms export more than $3.5 billion in crops ranging from sweet potatoes to soybeans, pork and poultry, tobacco and other commodities. Starting next week (July 6), China, the fastest-growing market in the world, will retaliate against the latest tariffs announced by our government and impose 659 tariffs of their own. It’s not just China raising tariffs. Mexico and Canada have also announced retaliatory tariffs. This double-barrel blow will result in farmers paying more for equipment they buy while, at the same time, facing shrinking markets for their products.
Our state is second in the nation in pork production, much of that being exported. Hog prices have been dropping since March, as both Mexico and China announced tariff increases of as much as 25 percent. (Figures show) $1.5 billion in pork is sold south of the border and $1.1 billion to China. The increased tariffs will result in fewer sales but the ripple effect will also be felt elsewhere. For example, our state’s corn growers, who sell just about all the grain they grow to livestock producers, will likely see fewer sales because of reduced demand. And so it goes with all other products. Ag economists are busy trying to predict the dollar impact of these trade tariffs but there will most certainly be a depressing reduction.
It’s no wonder our state’s agribusiness community says they are being used as political pawns in wars of trade and immigration — wars they neither created nor embraced. And the suggestion to our farmers that they “suck it up” and “be patriots” is insulting and potentially financially devastating, since 44 percent of North Carolina’s farms are less than 500 acres in size and almost 40 percent of them yield less than $50,000 in yearly income.
This may be political fodder and gamesmanship for some, but these are real threats to the livelihood for farmers in our state and could affect us all. We hope calmer heads will soon prevail.
Tom Campbell is former assistant North Carolina State Treasurer and is creator/host of NC SPIN, a weekly statewide television discussion of NC issues that airs on UNC-TV. Contact him at www.ncspin.com.