Portions of the first story are taken from Alan Guebert’s Farm and Food File newspaper column for the week of July 27, 2003.
Cancun could clobber US farmers and ranchers
On Friday, July 18, World Trade Organization director-general Supachai Panitchpakdi circulated to WTO members his draft proposal for the upcoming September trade ministerial in Cancun, Mexico. The draft, soon leaked, became an immediate sensation not because of what it contained, but because of what it didn’t contain.
At an incredibly short four pages in length, the draft contained no hard numbers or specific direction for negotiators to follow in Cancun. WTO General Council chairman Carlos Perez del Castillo of Uruguay downplayed the brevity by noting the draft was “somewhat skeletal in nature.”
Panitchpakdi was much closer to the mark with his explanation. The draft, he said, “is a reflection of the reality of our present situation.”
Six weeks before the big gabfest in Cancun, the reality of the present situation is clear: the upcoming ministerial is in serious trouble. Some witty trade watchers predict Cancun could become another Seattle—only this time the fights will be between trade ministers in wood-paneled rooms, not between protesters and police in the streets.
Negotiators were to arrive in Cancun with skeletal agreements, called modalities, to promote trade in such key areas as agriculture, patents, health, non-agricultural goods and investment. Twenty months of yakking since initial talks began in Doha in Nov. 2001, however, have produced nothing of substance—no modalities, no skeleton, not even a bone—for Cancun conferees to chew over.
On July 18, worried WTO officials pledged “intensive consultations in the coming weeks” to piece together something so the meeting doesn’t belly flop.
American farmers and ranchers may be far better off if Cancun implodes because US ideas on freeing ag trade, 20 percent of all global trade, will have far-reaching–and, as of yet, unquantified–effects on the $200-billion-a-year American ag sector.
On July 25, 2002, U.S. Trade Representative Robert Zoellick offered a five-point plan to spur ag trade talks. (See Issue 9.) The plan’s essentials include:
- eliminate all ag exports subsidies within five years;
- eliminate state trading enterprises like the Canadian and Australian Wheat boards;
- eliminate export taxes on ag products;
- expand all tariff rate quotas by 20 percent and eliminate all in-quota duties over five years and
- limit all countries’ trade-distorting domestic subsidies to five percent of their total ag production value within five years.
Most WTO member nations find fault with one or two items on Zoellick’s list. American farmers, however, can find fault with every one of them because, collectively, they systematically replace ag policy tools farmers and ranchers have relied on for decades with nothing more than blue sky and bureaucratic promises.
For example, if the U.S. limits trade-distorting domestic subsidies to five percent of the total value of ag production within five years, farm program payments will fall from about $20 billion per year in 2003 to $10 billion by 2008. That 50 percent hit, were it in place today, would cut 2003’s projected net farm income by 22 percent.
Few American family farmers could survive that assault on their bottom line.
Also, Zoellick’s idea to cut tariff rate quotas by 20 percent now and eliminate all in-quota duties over five years means American imports of beef, lamb, dairy, tobacco, sugar, peanuts and cotton will grow one-fifth now and by who-knows-how-much in five years.
Indeed, who-knows-how-much is as specific as it gets because—incredibly—Zoellick, Veneman and the survival-for-the-fittest Darwinists at USDA have not done one cost-benefit analysis of how any of their proposals will affect American agriculture.
That’s right: The group that preaches science as its law and economics as it gospel, simply urges American farmers to trust them as they give away the farm in the WTO. One key reason they want you to trust them is that they already know trade policies they advocate—essentially disarmament—will deliver havoc to American agriculture.
For proof what happens when the U.S. disarms in the global ag market look no further than wheat.
In the early 1980s, America held 40 percent of the global wheat export market. Today, post-Freedom to Farm and post-Export Enhancement Program, the U.S. world marketshare stands at 23 percent. In 1981 the U.S. exported 1.4 billion bu. of wheat. In the current marketing year, the U.S. will export 33 percent less, 930 million bu.
Moreover, the bigger ag trade picture shows even bigger ag trade problems.
For example, American ag exports are in a decade-long slump while American ag imports are on a decade-long rise. The U.S. ag trade surplus has fallen from $18.1 billion in 1993 to a projected $10 billion in 2003. Meanwhile, the cost of domestic ag programs has risen from less than $10 billion annually in the early 1990s to nearly $20 billion annually in the early 2000s.
In short, the domestic farm and ag trade policies of the past 10 years have not worked in any phase or fashion for American farmers and ranchers. Despite that dismal record, U.S. trade negotiators in Cancun will attempt to institutionalize that failure.
The bad new is if they succeed, you could be boiled in soyoil within 10 years. The good news is there’s a 50/50 chance that the oil will still be American.
But don’t bet the farm on it.
‘We’re being fed to the fishes over and over and over again’
On May 12, as required by law, Agriculture Secretary Ann Veneman and US Trade Representative Robert Zoellick announced dozens of private sector appointees to USDA’s two ag trade advisory committees. The list, found under “news releases” at www.usda.gov, reads like a who’s who of American ag masters of the universe.
The most sought-after appointments were to the Agricultural Policy Advisory Committee on Trade, or APAC, the main group that provides USDA and USTR with overall policy direction on ag trade issue.
Of lesser profile were appointments to six sub-committees, call the Agricultural Technical Advisory Committees for Trade, or ATAC. ATAC members offer technical advice on specific commodities like fruits, vegetables, grains, oilseeds, sweeteners, cotton and processed foods that are forwarded to APAC.
APAC members named by Veneman and Zoellick include J. Patrick Boyle of the American Meat Institute, Bob Stallman of the American Farm Bureau, James P. Camerlo of Dairy Farmers of America and Michael Dykes of Monsanto.
Other major ag players represented on APAC include folks from Rabobank, the National Cotton Council, Riceland Foods, ConAgra, the Corn Refiners, the North American Export Grain Assoc. and the National Pork Producers Assoc.
Likewise, the ATAC subcommittees are stacked decks, also. A review of committee memberships shows everyone who is anyone and nearly every group that ponied up to the “W for President” campaign fund.
Given the committees’ make-up, what advice do you think members offer Zoellick and Veneman on global ag trade? Does the phrase “You go, Bob!” strike a chord?
One member, however—buried deep in the committees and who spoke only on background—finds the sycophancy of the trade advisors stomach-turning. According to this member, “The main thing we do is go to meetings. We’re window dressing. [The USTR and USDA] really don’t want our opinions.”
The committees, says this source, are composed of “mercantile members who are there to represent their company’s interests. Most are so happy to sit in on ‘insider’ briefings and so intimidated to be there with the Cargills and ConAgras that they just sit and nod their heads ‘yes.’”
This member, though, is not housebroken. Early in his tenure he publicly challenged high level Administration officials on free trade’s impact on “(manure)-on-the-boots farmers.” The reaction the briefers: “I never got an answer and they never held another full committee briefing.”
After the briefing, several farm representatives privately congratulated him for “standing up and saying something they know to be true:” current ag and trade policies pursued by the USTR and USDA will pummel American farmers.
“Then I went back into the meetings and watched in horror as the same folks never opened their mouths. They’re patsies, and that’s why they’re on the committees.”
As Zoellick and Veneman head to Cancun in mid-September to push the White House free trade agenda on global agriculture, “What they really are promoting,” he explains, “is a lowest-cost producer agenda when, in fact, America is a high cost producer. That’s crazy if you’re an American farmer.
“Look, American ag exports are dropping and American ag imports are climbing under the current rules. Add to this the fact that all this was happening as American farm program costs doubled in the last 10 years.
“At the very least, can’t USDA see that its free trade wishes are in direct competition to what’s happening on the American farm? What’s the point of more free trade if we continue to sell all US farm commodities overseas at a loss?
“The policymakers’ focus is not ‘Why is there a need for band-aids?’ but ‘Let’s just get rid of the band-aids and see what happens.’ Sure, American farmers will bleed to death but they see anything that raises farm prices as ‘trade distorting’ and anything that lowers farm prices as ‘trade enhancing.’
“The simple fact is that American farmers are being fed to the fishes over and over and over again by their policy makers.”
A lovely evening for crop reportin’
One warm July evening about a lifetime ago when I was sparking the lovely Catherine, I asked her father if I could borrow his car so Catherine and I could go for cooling drive.
(That’s right. Not only did we not have a car during our courtship, Catherine and I didn’t acquire one until we had been married for nearly a year. I know you believe this because things like that happened all the time a lifetime ago. Our children don’t believe it, of course; but we know it to be true.)
We were gone, oh, maybe two hours and had not driven the car a whole lot of miles, if you catch my drift. When we returned after dark, my future in-laws had company, their long-time farm friends who had taken a shine to me.
“Sure is a lovely night to go out crop reportin’ with your best gal,” teased the old visiting farmer when he saw me. The lovely Catherine’s face began to flush a lovely shade of red as I stood next to her and absorbed the friendly jabs.
“I used to be pretty good at it myself,” he allowed a moment later while tossing a mischievous grin at his wife. “And like you, I was good at it even in the dark.”
I thought of John and his wit the other night as I was driving—alone, alas—at dusk on a country road a hundred thousand corn rows from home. A month ago, the corn fields were a shoulder-high, tender green carpet and the soybean fields an endlessly tall picket fence with bare ground between their rows.
The other night, however, after several refreshing rains and weeks perfect growing weather, the corn shimmered under a golden halo of tassels and the beans were an unbroken sea of lush green. Even the road, usually a flat gray path, glowed like a soft yellow ribbon in the slanting, weakening sun.
Then I thought of that old farmer nearly 30 years ago and the twinkle in his knowing eye. “Sure is a lovely night to go out crop reportin’ with your best gal,” I heard him say from the empty passenger seat.
Sure is, I replied as I slowly continued home to my best gal. After a pause to again eye the corn and beans, I noted that the crop was gonna be good.
“Best I’ve ever seen,” came the reply. “And don’t forget, I used to be pretty good at crop reportin’ myself.”