Trade needs a boost
The tide of international opportunity, supported by a burgeoning global middle class, has lifted production agriculture’s boat during the last five years. But this tide could easily recede without a concerted push from policymakers and ag interests, according to speakers at the Farm Journal Forum in Washington, D.C., last month.
The importance of trade to economic growth and jobs does not appear to be on anyone’s agenda, said Thomas C. Dorr, president of Thomas C. Dorr and Associates. "I would suggest this oversight…might be as much our responsibility as those we have elected."
Dorr said that from 1990 to 2009, more than 1 billion people migrated into the global middle class, defined as having an annual purchasing power of about $20,000. Moreover, he said, another 1 billion people will reach this milestone around the world by 2020, fueling demand for meat, fresh vegetables and processed food.
Be Aggressive. Dorr, a former president of the U.S. Grains Council who worked for USDA under President George W. Bush, was critical of the Obama administration for paying "lip service" to its goal of doubling U.S. exports by 2015. He also took issue with an agriculture industry that hasn’t "conveyed its commitment" to exports. He singled out the meat, dairy and poultry industries for "lashing out" at recent feed price increases, even as they "work hard" to expand internationally.
The Obama administration, Dorr said, "did not get serious until after the 2010 election." He pointed out that agriculture was slow to push for passage of free trade agreements with South Korea and Colombia.
However, ag exports have grown by roughly 50% during the last four years, from $96.3 billion in 2009 to a projected $145 billion in fiscal year 2013, according to USDA’s Economic Research Service. In 2012, the U.S. ran an ag trade surplus of $32.4 billion.
Agriculture Secretary Tom Vilsack, who also spoke at the Forum, highlighted the administration’s trade accomplishments. He explained that the U.S. Senate had passed a Russia export bill that very day. Obama signed the bill into law days later, normalizing Russian trade relations.
"It’s a victory for all of us interested in free and unfettered trade," Vilsack said. "It will give us the opportunity and capacity to significantly expand trade in Russia, and to do it in a way that will compel Russians to play by an appropriate set of rules."
Vilsack attempted to rally support for the Trans-Pacific Partnership. Vilsack said the agreement has tremendous potential. The Asia–Pacific Rim area comprises 75% of our international trade, he said.
Vilsack is keeping an eye on discussions about a European Union free-trade agreement, but said he recognizes some agriculture and technology issues need to be worked out before "we could be convinced that an EU trade agreement is going to be, in fact, free trade."
Trade Benefits All. "You need trade liberalization," said Jim Wiesemeyer, Informa Economics senior vice president. "It won’t guarantee growth, but you are not going to have growth without it." He expects foreign trade to keep U.S. farm profits strong in years ahead, but is concerned about the nation’s deteriorating transportation infrastructure, which might make it difficult to meet foreign demand.
Dorr wasn’t as optimistic about a fractious industry’s willingness to commit to feeding the world. "Are we willing to address these issues?" he asked. "Are we willing to commit…resources to the development of this new world trade order? Or, in the final analysis, are we going to elevate an old playbook designed to protect legacy systems as opposed to elevating our traditional American genius for innovation and entrepreneurship?"
Hosted in partnership with Informa Economics, the Farm Journal Forum’s premier sponsors were Farm Credit Services and SFP. Supporting event sponsors were BASF, Charleston|Orwig, CropLife America, Dow AgroSciences, DuPont, FMC, and Syngenta, in association with the Farmers Feeding the World initiative.