World trade greatly affects state agriculture
Last year saw rapid changes in worldwide agricultural production, food demand and obviously, the global economy. The first six months of 2008 saw tight food supplies and strong demand across the globe, leading some to declare a “food crisis.” Wisconsin’s agricultural exports reached a record $975 million.
Then increased supplies coupled with the global economic downturn slowed demand for our ag products. The latest trade figures from the U.S. Agriculture Department reflect these shifts.
For 2009, U.S. agricultural exports are forecast to fall from 2008’s $115.5 billion in exports to a still healthy $98.5 billion. The strengthened value of the dollar is another reason for reduced exports. Just as a lower valued dollar made U.S. commodities more price competitive in 2008, the rising dollar is now decreasing that price advantage.
Many news stories last year spotlighted the relevance of agricultural trade to the needs of humanity around the world. For example, some blamed export bans by major rice-producing countries such as Vietnam for denying people this staple food.
While the role of trade in improving livelihoods and world food security was actively discussed, inaction on agricultural trade plagued politics in 2008. Prime examples of this inaction were proposed trade agreements with Colombia, Panama and South Korea. All three agreements are good for U.S. agriculture and will open markets by lowering tariff barriers. Yet all three agreements were blocked in Congress and are still not in place to work for American farmers.
On the global stage, the World Trade Organization negotiations on agriculture and other sectors have also stalled. Demands of nationalistic politics are replacing the hopes of globalization and free trade among nations.
This political inaction could not come at a worse time for Wisconsin agriculture. Our exports of cheese, dairy genetics, cranberries and grain all recently reached record levels due to growing consumer demand in Canada, Mexico, Japan, China and South Korea. These ag exports not only account for nearly a fifth of the state’s farm income, but they help our state and nation’s trade balance, and they spur economic activity in our food-processing industry, which creates sorely needed jobs throughout Wisconsin.
This needs to be the year when agricultural trade expands to meet the needs of the world’s economy and people. Trade policymakers and negotiators need to take action to enact the proposed bilateral agreements with Colombia, Panama and South Korea. The Doha Round trade negotiations need to be reopened to ensure continued growth of agricultural trade.
Here in Wisconsin, we need to aggressively position ourselves to become the reliable provider of ag products that our customers want and need.
Bill Bruins is president of the Wisconsin Farm Bureau Federation, P.O. Box 5550, Madison, WI 53705; phone (608) 828-5711; Web site www.wfbf.com.