Economic Tidbits

Post-Election Thoughts

Former Nebraska Farm Bureau President Bryce Neidig had a saying about elections, “The candidates you support are never as good as you think they’ll be. And the candidates you oppose are never as bad as you think they’ll be.” Neidig’s statement is apropos. Once elected, candidates often confront the reality of governing, the complexity of issues, unforeseen events, and the diversity of opinions. Thus, the reality of governing differs greatly from the campaign promises. Governing dictates a movement towards the middle and compromise—sausage making at its finest.

Agricultural Economists Brent Gloy and David Widmar listed four questions in a recent Agricultural Economic Insights blog to consider regarding elected candidates and the post-election:

  1. How much of what the candidate said while campaigning did they mean?
  2. How much of what they actually meant will they try to implement?
  3. How much of what they try to implement will they be able to effect?
  4. How much of what they effect will be from the issues that “land” on their desk?

For agriculture, these questions should be pondered in light of a few critical issues. First, how will the election outcomes affect ad-hoc assistant payments (MFP; CFAP1; CFAP2) and will they continue? And, if so, at what level? It’s tough to imagine the payments will continue at 2020 levels. Producers should prepare for reduced payments. Another question is how will the magnitude of these payments affect the farm program and crop insurance program in the future? A new 5-year farm program is scheduled to be written in 2023.

Second, will the election outcomes affect world trade relations? Will the U.S. and other countries resolve ongoing trade disputes? Will the world’s rules-based trading system be refined for the future? Recent years have seen a deterioration of trade relations among countries along with the struggle to incorporate a major state-controlled economy into the fold, China. Partly as a result, trade in Nebraska agricultural products has declined in recent years. U.S. and Nebraska agriculture have benefitted from open trade. The value of Nebraska exports equals roughly 30 percent of the state’s agricultural receipts. Decisions by elected officials regarding trade will be a key for Nebraska agriculture’s future.

The post-election decisions regarding environmental sustainability and climate change will also increasingly shape agriculture’s future. Consumers are demanding more transparency in how food is produced and want assurances environmental impacts are minimized. Food supply chains are already incorporating transparency and the management practices consumers want. What will government’s role be? Will it assist through investment in renewable energy, infrastructure, and cost-share programs? Will it be a non-player? Will it seek change through regulations or tax policy? And, how does ethanol policy fit into the transition?

The questions are aplenty as with every post-election. Time will tell how candidate’s campaign statements match up to the art of governing. Will Neidig’s truism hold?

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