Market access, but at what cost?

Market access makes a good sound bite for politicians and negotiators trying to make deals in international trade arenas but U.S. farmers want to know how much that access will cut into profitability.

A panel of Texas farmers addressed this and other issues recently at a Texas Ag Forum in San Antonio, Texas.

“My concern is a lack of commodity-specific analyses (from U.S. trade negotiators) in the DOHA round (of trade talks),” said L.G. Raun, an El Campo third generation rice farmer.

He's also concerned that a combination of increased market access and U.S. farm program cuts will leave income gaps for producers. He said cuts across commodity titles could pit one commodity against another and damage the unified effort all of agriculture needs to assure a fair farm program.

“At this point I'm pessimistic,” Raun said. “But I believe Congress will do what's best for America and for American agriculture. We still have some political clout and I don't think Congress is willing to put us in the same predicament we have with oil.

“It's a national security issue. I think world food security plays a role as well. I don't think South America, Africa and other countries can supply (enough) food if (U.S. producers) are in stress.”

Jimbo Grissom, a Gaines County cotton and peanut farmer, said the current peanut program has helped growers improve the domestic market but has priced U.S. peanuts out of international trade.

“Under the old system, additional peanuts went to exports,” Grissom said. “Those (lower priced) peanuts established a substantial export market and we had more than 30 percent of the world total. In 2005, we had only 13 percent of that market.”

Grissom said peanut export market value has declined by more than 50 percent since 2002. That drop did not occur because of the new law but because part of the law is not being administered properly, he said. Grissom said the government is not fully in compliance with the law. The sticking point is the national posted price.

“That weekly price is the key to developing an export market,” Grissom said. He said too much mystery surrounds the methods by which USDA develops the national posted price.

Grissom said poor expectations for export sales may leave USDA “with massive stocks. It makes sense for USDA to drop prices now before that happens.”

John McClung, with the Texas Produce Association, said the state's fruit and vegetable industry has taken some hits in the last 25 years, from third behind California and Florida in production to tied for tenth with New York.

But he says statistics tell only part of the story. “A lot of the produce that comes through Texas comes from Mexico and we've enjoyed cooperation between producers and importers through long-term or annual agreements that allow us to prolong seasons.”

He said long-term commitments are necessary to develop phyto-sanitary guidelines and to establish relationships.

He said immigration reform is a huge issue for fruit and vegetable producers and processors. “We can't operate without the labor base,” he said. “We need a guest worker program and we need to control our borders by rule of law.”

He said the number of illegals in the United States is unknown. “The only way to deal with this issue is to devise some sort of amnesty plan,” he said. “If we don't we will have no viable guest worker program.”

He said in farm bill discussions, fruit and vegetable interests don't want “support payments or subsidies. We just want to get to the table, but we're not sure what's left on the table.”

Market access plays a critical role in the U.S. beef industry, said Ross Wilson, Texas Cattle Feeders Association. “We've had a significant drop in exports following the BSE (mad cow) issue.”

Wilson said much of the BSE scare may be market access politics instead of legitimate concerns. “Science is on the side of U.S. beef,” he said. He said the United States could use the WTO to open the Japanese market.

He said the European Union offers a good target for U.S. beef. “In the not too distant future the EU could become a net importer of beef. Also, China has developed a middle income class that provides a significant opportunity for the beef market.”

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