Robert Pore's Ag Blog

At a recent trade summit sponsored by the AFL-CIO and the U.S. Business and Industry Council, questions were raised that the current U.S. trade policy has been detrimental to working Americans.


According to National Farmers Union President Tom Buis, who participated at a panel discussion on trade, this country’s current trade agenda has put American farms, businesses and workers in jeopardy by giving a competitive advantage to foreign producers.


“Across the board, in farming, technology, and manufacturing, American jobs are being outsourced and America’s dependency on foreign goods is increasing,” he said.
He said that increasing U.S. dependence on foreign food and fiber is a threat to national security.  


“We don’t need to end up addicted to imported food, the same way we are currently addicted to oil,” Buis said.

According to Buis, currency manipulation, labor standards, and environmental health and safety standards must be equal worldwide in order for domestic producers to be able to compete fairly on the global market.

The ability of farmers throughout the world to compete fairly on the world market is also true.

According to the United Nation’s Food Agriculture Organization, FAO, production and consumption of farm products are expanding faster in developing countries than in developed economies.

But the concern is that productivity growth in the world's poorest nations is not keeping pace with the food needs of their rising populations.

According to an FAO report, the poorest developing countries will be increasingly dependent on world markets for their food security and so more vulnerable to price fluctuations in world markets. To improve domestic production capacity in these countries greater investment in education, training and infrastructure development is needed.


The report adds that Brazil, India and China are of increasing importance in shaping the future of world agricultural trade.

With rising incomes and increasing urbanization in developing countries, people’s diets are changing, the report said.

“This leads to greater demand for and imports of meat and processed foods particularly, but also for the animal feed needed for their production,” according to the report.

Helping to author the report was the Organization for Economic Co-operation and Development.

According to the report, global agriculture trade competition is expected to get to tougher for exports over the next 10 years as more and more developing countries become net food exporters.

For example, the United States is expected to remain the largest wheat exporter over the coming years, but its market share is likely to fall.

Similar trends prevail in other commodity markets, with rapidly growing exports from Latin American countries in particular especially as a result of free trade agreements.

The report also said that bioenergy from coarse grains and other cereals, oilseeds and sugar is expected to grow, creating additional demand for these commodities.
“In particular, much of the growth in demand for coarse grains will be for producing bio-diesel to be used as a substitute for oil-based fossil fuels,” according to the report.

While growth is expected to continue in international meat markets, they remain vulnerable to animal disease outbreaks in key supplying countries.

“Potential further outbreaks of BSE (mad cow disease), foot-and-mouth disease, and avian influenza will challenge markets and affect trading patterns, requiring greater international attention and cooperation,” the report said.

All the tools are there to feed the world’s growing population as new technology increases food productivity. Increased competition in international trade is a good thing in meeting rising food demand.

The key, though, is sharing the wealth. All family food producers around the world benefit from increased competition. There must be a level playing field for those producers to compete in.

U.S. dependence on foreign food and fiber would not be an issue if nations were allowed to compete fairly and freely in world markets.

A complaint among farmers in this country for years is how anti-competitive the agricultural industry has become. Markets have become anti-competitive because of concentration and consolidation. As markets have become more anti-competitive, the need for government subsidies have become more of a necessity for small and medium producers to survive.

Here are the facts, according to a recent study by the U.S. Department of Agriculture: Average operating profit margins and average rates of return on assets and equity were negative for small farms, but positive for large, very large and non-family farms. Small farm households typically receive substantial off-farm income.
If this country truly had a free market system that allowed for fair and open competition, all this debate about how much to cut farm subsidies would be moot. But the more we sign all of these “fair trade” agreements without first addressing how to bring competition back into the market place, we haven’t eliminated the need for subsidies.

The same is true for world trade. Eliminating tariffs and other trade barriers isn’t going to put money in the pocket of family producers without first restoring free market competition.