Opinion: Presidential race could impact Michigan's agricultural industry
As the national media covers the presidential race this year, local farmers have been watching with great interest. That’s because a number of policy proposals being debated at the presidential level may have a significant impact on Michigan's agriculture industry and overall economy. In fact, several proposals being pushed by the leading Democratic primary candidates could endanger farmers' ability to stay afloat.
One key discussion is the role of hydraulic fracturing, commonly known as fracking. Some former candidates who continue to be leading voices in their party, notably Sens. Bernie Sanders and Elizabeth Warren, proposed to completely ban fracking. Likely presidential nominee Joe Biden, who agreed to set up joint policy committees with Sanders just after receiving his endorsement, is already on the record opposing new fracking on federal lands. And Warren is often mentioned as a possible vice presidential nominee.
The concern with all of this for many farmers is that the natural gas produced by fracking is the primary fuel for a large number of farm operations, and other industries, in Michigan. A ban on fracking would likely reduce natural gas supplies and drive prices up, making the cost of agriculture, and manufacturing, more expensive for everyone. Ultimately, it would cause all food costs to rise across Michigan and America, impacting family budgets during a time of deep economic crisis.
Michigan’s labor market can also expect a significant hit from a fracking ban. A recent American Petroleum Institute study predicts that Michigan would place in the top 20 states for fracking ban-induced job losses, with an estimated 233,000 gone by 2022.
Data from the U.S. Chamber of Commerce found that just four years of a fracking ban would cost 19 million American jobs, reduce U.S. Gross Domestic Product by an estimated $7.1 trillion, create a tax revenue loss at the state, federal, and local levels of $1.9 trillion, as much as double gas prices, and cause the price of natural gas to rise as much as 300% or more — all devastating effects on a fragile economy we will be struggling to restart as our current crisis dissipates.
The supply chain and energy intensive nature of farming makes our industry particularly vulnerable. The U.S. Department of Agriculture estimates that nearly half of corn, wheat and soybean production costs are born out of direct and indirect energy costs. The American Petroleum Institute report quantifies just how sharply the farming industry would suffer. Impacts include severe price increases for the cost of wheat, corn and soybean farming in ranges of 40-60% of current costs, average annual farm income losses of more than $25 billion nationally and farm income declines of 43%. The cumulative cost of a fracking ban would make domestic farming financially infeasible at a time when America needs it most.
Another area where agriculture and a number of other sectors find common cause involves the need to rebuild our infrastructure. But Michigan farmers know the ability to build infrastructure such as grain silos, processing facilities and harvest systems continues to be slowed by overly broad regulation. That’s one reason President Trump called for modernizing the National Environmental Policy Act (NEPA), a nearly 50-year-old law that has grown into a hurdle slowing the rebuilding of America’s infrastructure.
Farming is uniquely vulnerable to policy proposals like a ban on fracking and outdated environmental regulations. As candidates make their pitches across the country, Michigan’s farmers will be keenly aware of policy consequences. Candidates should too.
Hank Choate is a Jackson County farmer and statewide leader in the agriculture industry.