Corporate Agribusiness'
Fast Track Bonanza
By A.V. KREBS
Special to The Progressive Populist
"Bonanza" is the word that corporate agribusiness is fond of using
in extolling the results to date of the three-year old North American Free
Trade Agreement (NAFTA). However, a recent U.S. Department of Agriculture
Economic Research Service (ERS) report suggests NAFTA has been a bonanza
for multinational traders.
Corporate agribusiness plans to step up its aggressive pursuit of new "fast
track" legislation and crack down on members of the House of Representatives
Agriculture Committee who noticeably failed to support the recently proposed
legislation that would enable future NAFTA-type agreements to breeze through
the Congress with no opportunity for amending such pacts.
Not only is "Ag for Fast Track" -- a coalition of 68 corporate
agribusiness groups -- now urging President Clinton to bring up "fast
track" again in 1998, but they are also threatening to punish members
from agricultural districts and states who refuse to vote for it.
The coalition is composed in part of such corporate agribusiness mouthpieces
as the American Farm Bureau Federation, the National Pork Producers Council,
the National Cattleman's Beef Association, The Fertilizer Institute, the
National Corn Producers Association, corporations such as General Mills,
Nestle USA, and Blue Diamond Growers and the giants of the grain trade --
Cargill, Continental Grain, ConAgra, Louis Dreyfus, Bunge, Central Soya
and Ralston Purina.
Noticeably absent in signing the "Ag for Fast Track" November
20, 1997, open letter to President Clinton, urging his "help"
in "facilitating ... Congressional approval of unencumbered, comprehensive
negotiating authority as soon as possible," was Archer-Daniels-Midland,
"Supermarkup to the World."
Since Congress recessed for the holidays the coalition has had several meetings,
and a participant in one meeting described those in attendance as "stunned"
at the lack of support among House Agriculture Committee members.
Of the 27 Republicans on that committee, eight told Congress Daily
they would vote for fast track, eight were undecided and seven said they
would oppose it; four did not respond. Among the 23 Democrats, five supported
fast track, one was undecided, 14 said they were opposed and three were
leaning against it.
Nick Giordano, a National Pork Producers Council lobbyist and organizer
of the coalition, told Congress Watch that "it's imperative that we
get fast track," because other countries are negotiating trade agreements
that would leave U.S. agricultural exports facing higher tariffs than those
from other countries.
In interviews, both Giordano and Scott Shearer, a lobbyist with Farmland
Industries, the Kansas City cooperative processing giant, contended members
of their own groups had mounted grassroots lobbying campaigns. But Giordano
acknowledged the overall grassroots efforts had not been as large as necessary.
Giordano noted, for example, that the National Association of Wheat Growers
joined only days before the scheduled House vote after Rep. Earl Pomeroy,
D-N.D., got a letter from Trade Representative Barshefsky promising additional
audits of the Canadian Wheat Board.
While corporate agribusiness continued to press for "fast track"
legislation in an effort to replicate such "free trade" agreements
as NAFTA a conveniently ignored, but comprehensive USDA examination of NAFTA,
released September 3, shows that more Canadian and Mexican agricultural
goods have been brought into the United States than the U.S. sent to Mexico
and Canada in the three years since the implementation of NAFTA.
Specifically the ag export value delivered to the American economy by NAFTA
is a negative $100 million, according to the USDA study.
"During 1993-96, U.S. agricultural trade to Mexico and Canada rose
from $8.9 billion to $11.6 billion. U.S. agricultural imports from the two
NAFTA partners grew from $7.3 billion to $10.5 billion."
While both U.S. ag exports -- and imports -- climbed since the passage of
NAFTA, the agreement was responsible for only 20 percent of the growth;
80 percent of the two-way trade would have occurred without it, notes USDA.
The USDA suggests that NAFTA was responsible for only $540 million of the
increased U.S. ag exports to Canada and Mexico while NAFTA increased imports
from Canada and Mexico by $640 million.
A detailed, commodity-by-commodity analysis shows that many of corporate
agribusiness's claims that NAFTA has been rewarding for U.S. agriculture
are more based on hype than fact. For example:
(ogonek) U.S. corn exports to Mexico "are about 5 percent higher"
than they would be without NAFTA. Besides, much of the increased corn sales
"were due to Mexican drought." NAFTA-inspired U.S. corn exports
to Canada are "negligible, less than a 1 to 2 percent increase."
(ogonek) Recent U.S. soybean sales to Mexico "were 2 to 5 percent higher
because of NAFTA" but "future exports are expected to decline."
* "NAFTA has had little direct impact on hog trade" with Mexico,
says USDA. Yet a July 15 National Pork Producers Council press release trumpeted
NAFTA as "a bonanza for the U.S. pork industry."
"Pretty hard to call it a bonanza," John Link, one of the USDA
economists who compiled the blunt report, observed to farm columnist Alan
Guebert.
In fact, USDA figures show that NAFTA's overall impact on the U.S. ag trade
balance has been the very opposite of a "bonanza." In 1993, the
last pre-NAFTA year, U.S. agriculture ran a $1.52 billion ag trade surplus
with Canada and Mexico, notes USDA. In 1996, the trade surplus dropped to
$1.04 billion. In 1995 with the onset of Mexico's peso crisis the U.S. balance
of ag trade payments with our two neighbors showed a deficit of $81 million.
Likewise, the farm community has yet to get the promised boost from NAFTA.
USDA estimates that NAFTA has barely effected rural investments in U.S.
agriculture -- up 0.19 percent -- while rural employment tied to the trade
deal increased an almost invisible 0.07%.
"Bonanza" is a description better suited to how corporate agribusiness
has benefited from the NAFTA agreement. "Sales from U.S. affiliates
located in Canada rose from $5.5 billion in 1987 to an estimated $12.5 billion
in 1996," enriching the likes of Kraft Foods (Philip Morris), PepsiCo,
Heinz, ConAgra and Cargill.
Similarly, "sales from U.S. affiliates in Mexico grew from $1.6 billion
in 1987 to an estimated $6 billion in 1996" rewarding such "farmers"
as PepsiCo, Ralston Purina, ADM, Kelloggs, Tyson Foods, and Simplot.
NPPC's Giordano, obviously with such corporate agribusinesses in mind, warns
that "Ag For Fast Track" coalition members "are going to
be more intense. Agriculture has to have this, and we are not going to let
people just vote against this without repercussions."
Questioned if he meant that House members who vote against fast track in
the future would not get endorsements or campaign contributions from political
action committees associated with coalition groups, Giordano said, "I
don't want to get into the specifics, but we are going to raise the heat."
A.V. Krebs is editor/publisher of The AgBiz Tiller Online, monitoring
corporate agribusiness from a public interest perspective (http://home.earthlink.net/~avkrebs/CARP/tiller/)
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