Posted on 07/31/2003 12:05:37 PM PDT by Willie Green
For education and discussion only. Not for commercial use.
The politically savvier critics of U.S. globalization policy are rapidly reaching an important conclusion: Without major help from American agriculture, it´s going to be painfully difficult to force major change in U.S. trade policy even in today´s weak economy. Fortunately, a recent trip to America´s agricultural heartland showed me that prospects are improving for closer cooperation between agriculture and the nation´s hard-hit domestic manufacturers.
Since the early 1990s, dissident ag groups have done yeoman´s work resisting NAFTA-style trade policies. But most represented smallish family farm organizations or individual farming or ranching interests with very narrow concerns. Lined up solidly and powerfully in favor of current globalization policies have been giant agri-business companies like Archer Daniels Midland and Cargill, as well as most of the specific crop of livestock producer lobbies.
As with many of the major manufacturing and other business groups, these lobbies contained many smaller members potentially threatened by breakneck globalization. But as with many of the smaller manufacturers, the smaller ag producers seemed satisfied enough – if not overjoyed – with their trade associations´ positions on other issues that seemed more important than trade.
Other obstacles have impeded ag/industry cooperation on trade as well. Many smaller industrial interests have long been jealous of the entire ag sector´s power – e.g., its representation by an entire Cabinet department, its expensive price supports and subsidies, and Washington´s energetic efforts to develop new agricultural technologies and spread them to large and small farmers alike. In fact, during the last fight over fast track trade negotiating authority for the president, normally free trading ag interests even managed to carve out exemptions from these procedures for dozens of commodity groups. And U.S. global trade negotiating strategy has for decades accepted empty promises of freer world ag markets in exchange for concessions that have devastated domestic manufacturers.
In all, ag and industry seemed unlikely to substantially overcome the mutual suspicions that can be traced to early American history – when manufacturers successfully sought domestic tariffs to help develop domestic industries, and farmers resisted in order to preserve their access to cheap manufactured imports.
My eyes were opened to some new possibilities for ag/industry cooperation on trade by attending the latest annual conference of the Organization for Competitive Markets, which represents many independent farming and ranching interests alarmed at what they see as the growing cartelization and rigged nature of the domestic and increasingly global ag marketplaces.
At their gathering in Kansas City, OCM´s members made clear to me that the split between small and domestic-oriented ag producers and big multinational agri-businesses has become as sharp and important as the split between small, domestic-oriented manufacturers and multinational industrial giants. And trade issues increasingly seem to be at the root. In both cases, the little guys are emphasizing the need to preserve a world-class domestic production base while the big guys are simply looking for the lowest-cost supplies from any source, foreign or domestic.
Domestic ag producers are also realizing – just like small manufacturers – that they have been sold a bill of goods on globalization. Despite promises that new trade deals would open enormous foreign markets that world-beating American farmers and ranchers would dominate, the nation´s historically huge ag trade surplus has been shrinking steadily – largely because of agri-business imports. Meanwhile, according to analysts like John N. Dittrich of the American Corn Growers Association and Daryll Ray of the University of Tennessee, most commodity export volumes have been stagnant since the mid-1970s, and prices have cratered. Domestic ag output has risen during that period – but because domestic consumption keeps increasing. So as with manufacturing, the big emerging market is really here in the United States.
The OCM members and conference speakers also shared with me some fascinating and intriguing insights on the rumble underway between rich and poor countries over agricultural subsidies in the United States, Europe, and Japan – a literal food fight whose outcome will heavily influence how the current Doha Round of World Trade Organization global trade talks turn out.
My new ag friends agreed with third world farmers and their advocates that the rich-country subsidies were worsening global poverty. But they insisted that the answer wasn´t opening rich-country ag markets indiscriminately to third world producers. Instead, they claimed that the subsidies´ main effects had been to drive down global ag prices and thus deprive farmers everywhere of vital income – even as these lower prices swelled the profits of the multinational agri-business traders. And to add insult to injury, the ag giants have colluded to keep retail food prices high and rip off consumers.
OCM members and speakers seem to want today´s ag subsidies replaced with the kinds of price supports in place throughout the developed world until the mid-1980s – when, at the behest of the agri-business giants, the United States replaced them with price-depressing subsidies that were soon emulated in Europe. Deprived of this pricing power, the ag giants would no longer be able to flood third world markets with artificially cheap food, hundreds of millions of third world farmers would regain competitiveness in their home markets, and their incomes would rebound.
I suspect that some holes can be punched in this latter argument. In particular, it´s hard to see how even higher global ag prices could bring real progress, much less anything remotely close to prosperity, to third world farmers. Continued subsistence-level existence seems a far likelier outcome. And although that is obviously much better than today´s desperate circumstances, would developing countries and their advocates really be satisfied with such modest advances?
All the same, 98 percent of what I heard at the OCM meeting sounded like what is typically heard at a meeting of Tradealert.org´s sponsor, the U.S. Business and Industry Council. Just over a century ago, Kansan Mary Lease urged farmers to raise “less corn and more hell.” Judging from the OCM meeting, more and more 21st century farmers are agreeing – and their focus is turning to globalization.
Alan Tonelson is a Research Fellow at the U.S. Business & Industry Educational Foundation and the author of The Race to the Bottom: Why a Worldwide Worker Surplus and Uncontrolled Free Trade are Sinking American Living Standards (Westview Press).
With the exception of grain, America imports more of every foodstuff than we export. That includes meat.
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