Socioeconomic threats are more salient to farmers than environmental threats

Abstract

It is a difficult time to be a farmer, particularly in the midwestern US, where a slow-moving farm crisis has been brewing. In recent years farmers have faced multiple socioeconomic threats such as a trade war with China, industry consolidation, and decreasing farmgate prices, as well as multiple environmental threats, including flooding and drought. We analyze farmers’ assessments of these concurrent risks and their relationship to stress and farm exit, through a mail survey of 210 soy and dairy farmers in Indiana. On average, environmental threats are perceived as less of a threat to farmers than to immediate socioeconomic threats such as the trade war and, more importantly, long-run economic issues such as price decline and consolidation. We find evidence that farm exit is largely determined by farmer identity, perspectives on the trade war, and stress. The ongoing trade war with China is a key source of stress for soybean farmers and federal payments from the Market Facilitation Program are unlikely to stem farm exit. Addressing the farm exit problem and mitigating the current farm crisis necessitates greater attention to how policies, indirectly lead to farm exit through stress.