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March 2009 Archive for The Truth about Trade

RSS By: Dean Kleckner, AgWeb.com

Dean is Chairman Emeritus of 'Truth About Trade & Technology, a nonprofit advocacy group led by a volunteer board of American farmers.

Tired of Being Left Out In the Cold

Mar 27, 2009
The poet T.S. Eliot knew what he was talking about when he called April “the cruelest month.”
We’re approaching the critical time of year when wheat farmers in the Upper Great Plains will first get an idea what the crop potential may be. If the weather lets us plant in mid-April, we’ll be in luck. If we can’t start until the middle of May--because we’ve suffered through a cruel April, due to cold wet soils--we’ll be in trouble. Our yields could drop by as much as 40 percent.
One month makes a huge difference in yield potential, and we’re completely at the mercy of Mother Nature. We can put seeds in the ground while there’s still snow in the ditches, but seeds will lay there for weeks without progress.  While seeds will slowly sprout in soils as cool as 40 to 45 degrees, it’s not until the soil temps approach 60 degrees and wheat plants really begin to feel the warmth of spring that plants will rapidly grow and flourish.
What if modern science was to give us an edge?
We already have the know-how. Biotechnology has transformed agriculture for farmers who grow soybeans, corn, and cotton. Earlier this year, they passed a significant milestone: 2 billion acres of genetically modified crops planted around the world since commercialization began 13 years ago. For these farmers, GM crops are not a cutting-edge fantasy but the new reality of conventional agriculture.
Wheat farmers, however, are left out in the cold, both literally and figuratively. We not only need to shake off the chill of January, February, and March, but we also want to take full advantage of the Gene Revolution--something that we’ve been blocked from doing, thanks to a toxic mix of political confusion and scientific illiteracy.
Farmers who plant biotech crops have enjoyed large increases in yield. Some seed companies are even talking about new technologies doubling the yields of these crops over the next two decades.
Where’s wheat? Twenty years behind and counting. Years ago, several players in the wheat industry grew nervous about biotechnology, primarily spooked by misguided fears about consumer acceptance in foreign countries.  Consequently, producers and consumers alike are paying a steep price. While the rest of the planet started to embrace biotechnology, wheat retreated. Now, while many years behind other major crops, the wheat industry is uniting and strategically moving forward toward enhancing wheat through biotechnology.
Cold-tolerant wheat, possibly obtained through genetic modification, would provide a big boost. Crops able survive in slightly colder temperatures--even by just a few degrees--would help us increase our output. That would lead to earlier harvests, better yields, lower food prices and greater global food supplies. Each point takes on more importance when you consider the global relevance of wheat as a staple food crop for billions.
Even more important is drought tolerance. Wheat grows in dry climates, and plants that make efficient use of water perform the best. The goal is more production per unit of available water. If biotech wheat is ever commercialized, drought tolerance could possibly become the first available trait because the science behind it is already proven and soon available in other crops.
Biotechnology also promises a solution to an emerging problem in Africa and parts of Asia, where a deadly fungus called stem rust poses a huge threat to small-acreage farmers and their staple crop. Some diseases depress yields. This new stem rust is different--it wipes out whole harvests. “It has immense destructive potential,” said Norman Borlaug, the father of the Green Revolution, in a recent interview.
The last stem rust epidemic occurred half a century ago. Scientists thought they had defeated it permanently through better breeding. But now the disease is back, in a virulent new form that could imperil the world’s food supply. The International Maize and Wheat Improvement Center in Mexico has warned of “a pending disaster in global agriculture.”
Fungicide sprays offer marginal relief, but not a cure. We need to defeat this disease.  Some new discoveries indicate that genes that convey resistance to this rust exist today however, we need all the scientific tools available to us – and that includes biotechnology to defeat this threat. Unfortunately, the answers to this problem lie not merely a season or two away, but years in the future. That’s why the work to annihilate it for another half-century or longer must begin immediately.
T.S. Eliot’s famous line about April appears in a poem called “The Waste Land.” If we don’t take advantage of biotechnology, wheat farmers will have to endure not only more cruel Aprils, but brutal years of mediocrity as fertile wheat lands are deprived of their potential while other crops flourish with the biotech advantage.
Al Skogen produces wheat, corn and soybeans, using minimum and no-till production practices, on a diverse grain family farm in east central North Dakota. Mr. Skogen is chairman of Growers for Biotechnology, participated in the 2008 Global Farmer to Farmer Roundtable and is a member of the Truth About Trade & Technology Global Farmer Network.

Best of Intentions

Mar 20, 2009
When President Obama took the oath of office two months ago, he became the 44th president of the United States and the 11th president who has had to confront Fidel Castro since he assumed power in Cuba in 1959.
It’s hard to believe that 25 percent of our commanders-in-chief have had to deal with this dictatorial regime in our own backyard, about 90 miles south of Florida.
It’s even harder to believe that anyone could still rate the trade embargo on Cuba a success. John F. Kennedy established it in 1962, with the best of intentions during the Cold War and the aim of forcing Castro from power. If it had worked at any point over the last 47 years, of course, Castro would be something other than a grizzled old tyrant--and Obama wouldn’t have to spend a moment of his time worrying what to do about him.
Thankfully, the White House appears ready to shift U.S. policy in the right direction. Obama should continue on this constructive course with Cuba and expand it to other parts of Latin America as well.
The recent budget bill eases prohibitions on travel to Castro’s island. Previously, Americans with immediate family in Cuba were allowed to visit only once every three years. Now they’ll be allowed to make annual trips.
Some trade restrictions will be lifted soon as well. Americans who want to sell agricultural products and medical goods will be able to obtain special licenses allowing them to go to Cuba on business.
These are positive developments. They do not go nearly far enough--trade with Cuba will remain drastically limited, to the detriment of both U.S. exporters and impoverished Cubans. Yet it makes sense to walk before we run, or at least to take a halting baby step before trying to surge forward.
We should hope that closer ties lie ahead. With the world economy in peril, it simply makes no sense to deny ourselves a market of 11 million people, especially one that is so close to home. Yet the embargo has walled off this economic opportunity. Meanwhile, farmers and manufacturers in Canada, Europe, and Asia trade with Cuba everyday.
Lawmakers who complain about American companies that “send jobs overseas” should reconsider our approach to Cuba. By refusing to trade with this near neighbor, we’re essentially outsourcing U.S. export jobs to foreign countries.
American farmers would welcome the chance for greater sales in Cuba, which is hungry for our corn, soybeans, wheat, chicken, and milk. One of my remembrances on my one-time visit to Cuba, 10 years ago, is no milk unless you had small children. Then you could get a little. Permitting additional trade would serve as a mini-economic stimulus package for rural America.
Other sectors also would benefit. The U.S.-Cuba Trade and Economic Council--a kind of Chamber of Commerce group for improved trade ties--boasts dues-paying members from the automotive, construction, health care, hotel, and pharmaceutical industries.
Even if Congress and the Obama administration haven’t gone far enough, they deserve praise for reorienting Washington toward engagement with Havana. There’s a solid foundation to build upon here, and perhaps the president will announce another small step next month, when he meets with Latin American leaders at a summit in Trinidad.
The irony is that even though we’re headed in the right direction on Cuba, we’re still going the wrong way with Colombia. It’s currently our country’s strongest ally in Latin America--and yet Washington continues to delay approval of a modest trade agreement that will help both Americans and Colombians.
Latin America is home to a number of stridently anti-American governments, from Bolivia to Venezuela. On Sunday, El Salvadorans elected a new president from a left-wing party of former Communist guerillas. Cuba, of course, has been a thorn in our side for almost half a century.
Obama has promised greater engagement with America’s adversaries, and the new Cuba policy is a perfect example of an attempt to improve relations with an old foe. We should all hope it works.
At the same time, the president should push for greater engagement with America’s friends--and call on Congress, at long last, to approve the U.S.-Colombia Free Trade Agreement.
Dean Kleckner, an Iowa farmer, chairs Truth About Trade & Technology. www.truthabouttrade.org

It Should Be About Trade…and Only Trade

Mar 13, 2009
By now you’ve heard all about the pork-barrel projects that Congress has stuffed into its bloated spending bill. The Heritage Foundation counts more than 9,200 earmarks, costing taxpayers almost $13 billion.
It’s an outrage--unless you think the federal government, in the midst of a severe financial crisis and distressing levels of unemployment, needs to devote $6.8 million to performing arts at the Kennedy Center in Washington, D.C.
Why can’t each of these spending decisions be considered on its own merits, one at a time? I think we know the reason: Members of both parties have an interest in making sure this never happens. Sources tell me that if you want to eavesdrop on their strategy sessions, loiter in the hallways of the Kennedy Center during the intermissions of the ballet performances.
Sadly, this short-sighted approach to policymaking isn’t confined to Congress and its budget bills. It goes on all the time--and its deployment in the arena of international trade is hurting the U.S. economy in a moment of dire need.
Last week, the Obama administration released its official Trade Policy Agenda. It is a paltry, four-and-a-half-page document. As Terence Corcoran pointed out in the Financial Post, nowhere does it identify free trade as an operating principle, unless you count this sentence: “If we work together, free and fair trade with proper regard for social and environmental policy and appropriate political accountability will be a powerful contributor to the national and global well being.”
That’s an awful lot of qualifiers for a single sentence.
Just as Congress lards up its spending bills with special-interest projects, the Obama administration appears committed to bogging down trade talks with all varieties of unrelated issues. Rather than seeking to advance a trade agenda that will benefit American workers and consumers, it apparently plans to hold trade hostage to a social and environmental agenda.
On Monday, U.S. trade representative-designate Ron Kirk said as much at his Senate confirmation hearing: “The President and I believe that our mission is not simply to increase American exports, as important as that is, but to ensure that the way we promote trade reflects our country’s values about economic progress and justice, including through the advancement of internationally recognized labor and environmental standards.”
Trade policy is trade policy--it’s that simple. If President Obama wants to promote better labor practices in other nations, I wish him well. I also encourage him to work through the normal channels of diplomacy, including the International Labor Organization, a special branch of the United Nations that exists for this very purpose.
It would be bad enough if our government was merely failing to complete sensible trade agreements, such as the unapproved deals with Colombia and South Korea, due to hang-ups about ergonomics in Colombian factories and the condition of Korean wetlands. Even more worrisome, however, is the possibility that the stated concerns about labor and the environment are stalking horses for something else entirely: protectionism.
When I was young, I worked at a slaughter plant in Iowa. Years later, I was involved in negotiating trade rules between the United States and Europe, including discussions about slaughter-plant operations. The Europeans wanted to regulate just about everything, right down to the color of the boots Americans would wear on the job.
Their concern for the way we looked was touching. Yet there was no rational reason for their demands, except one: They didn’t really want to promote trade. Instead, they wanted to maintain protectionist policies that prevented U.S. products from penetrating their markets. So they came up with a list of absurd requirements.
This is now what’s happening to U.S. trade policy. Rather than making it easier for Americans to sell goods and services to foreign customers, our leaders are insisting that other countries meet unrealistic directives on labor and the environment.
The World Bank says that global trade will shrink by more than 2 percent this year. This will compound our problems domestically, as more than 30 percent of last year’s U.S. GDP was tied to trade.
If Washington truly wants to stimulate the economy, it will abandon the fantasy that its taxpayer-funded handouts to the Kennedy Center do any good. It should forswear pork-barrel politics and introduce a trade policy that promises to put Americans back to work.
Until then, one of Washington’s leading export products will be sheer nonsense.
Dean Kleckner, an Iowa farmer, chairs Truth About Trade & Technology. www.truthabouttrade.org   Mr. Kleckner was the only farmer on the U.S. advisory team to the GATT negotiations when they began in September 1986 in Uruguay. Kleckner served on the U.S. Trade Advisory Committee, first appointed by President Reagan, reappointed by President Bush, and reappointed twice by President Clinton.

Get the Most Bang for the Buck

Mar 06, 2009
“Blessed is he who expects nothing, for he shall never be disappointed,” quipped the English poet Alexander Pope in the 18th century.
If President Obama has his way with the budget proposal he unveiled last week, some farmers may be disappointed--but not for the right reasons.
In his State of the Union address, Obama promised them nothing, literally. He pledged to “end direct payments to large agribusinesses that don’t need them.” The administration would phase out subsidies to farmers whose sales revenue is more than $500,000 per year, for an assumed savings of nearly $10 billion over the next decade.
Powerful interests are already lining up against the proposal. “We just passed a fiscally responsible farm bill that made cuts to farm programs,” complained Representative Collin Peterson, who heads the House Agriculture Committee. “So now is not the time to reopen it.”
I used to believe that farm subsidies made sense--or at least I was able to rationalize that they did. Then I changed my mind. In the 1990s, I visited New Zealand and saw how a modern system of agriculture could transition away from heavy subsidies to none at all. It wasn’t an easy change. The end result, however, was worthwhile for everybody involved--especially farmers. Every New Zealand farmer I know prefers to be free from government meddling, even when it means they must forgo handouts.
Since then, I’ve called upon American lawmakers to pursue similar reforms.
So I’m delighted to see Obama take up this issue. Unfortunately, he hasn’t chosen the best target.
The problem is that he’s looking at farm subsidies as a budgetary matter. This is understandable, given that the budget is foremost on his mind. In Washington right now, everything is about revenues and expenses--mostly expenses, sadly. The projected deficit for 2009 is $1.75 trillion.
To keep this enormous figure in check, Obama must try to control at least some Big Government’s spending urges. Subsidy payments to large farm operators are an obvious approach.
The problem is the president is looking at the issue through the wrong lens. Farm subsidies are certainly a budgetary matter, but Americans--and farmers in particular--would be better off if the White House looked at them as a trade issue.
The financial crisis has devastated international trade, which means that Americans are having a much tougher time selling their goods and services to foreign customers. Some analysts believe farm exports will drop by $ 20 billion this year. We would be well served by policies that rejuvenate the global economy--and there are better methods of doing this while also tackling farm subsidies.
Among all the ways the federal government supports farmers, direct payments based on acreage and production history do the least to distort trade. That means when it comes to the rules of the World Trade Organization, they are the most compliant.
By contrast, payments based on current crop production and prices do the most to distort production and thence international markets. If we’re going to cut aid to farmers, these types of subsidies should face the chopping block first. They’ll not only begin to lower spending, but they’ll also make it easier to fuel global trade at a time when it’s barely sputtering.
A change along these lines could have the effect of jump starting the Doha round of WTO talks--a series of negotiations that have halted because of agricultural subsidies in the United States and Europe combined with reluctance among developing countries to lower their trade barriers.
If our country were to rethink its approach to supporting agriculture, we might inspire trade diplomats elsewhere to revise their own proposals. Successful global trade talks would inch closer to reality. Experts project that the annual gains to the world economy could reach as much as $120 billion by 2015.
At a time of $1.75 trillion deficits, that may not seem like much. But we’ve got to begin climbing out of this budget hole somehow. If we’re going to start with farm subsides, let’s at least get the biggest bang for our buck.
Otherwise, Obama will turn Alexander Pope’s maxim on its head: Farmers will get nothing, and face disappointment all the same.
Dean Kleckner, an Iowa farmer, chairs Truth About Trade & Technology. www.truthabouttrade.org
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