AERO KUFM Commentary Archives

AERO KUFM Commentary

June 30,2005

by Beth Neely

From the beginning of American history, family farms have been the bedrock of rural communities and food security. Today, however, the expansion of international trade of agricultural commodities under free trade agreements is jeopardizing the viability of locally owned farms and ranches across the country. Montana is being hit especially hard. With 86% percent of agricultural products leaving the state as raw commodities, Montana’s farms and ranches are at risk. It is time to recognize the costs of free trade, and to stand behind efforts to ensure the future of family farms and ranches.

Under international free trade agreements, agricultural commodities are being increasingly produced for international export. This shift has drastically modified the practice whereby countries produced the majority of their own food on family farms and traded only in certain products that could not be grown locally. It is part of a growing wave of globalization, started centuries ago when companies from colonizing countries forced farmers to give up local food production and shift to plantation labor for the production of luxury export crops.

Recent free trade agreements threaten the viability of Montana’s agriculture through policies that eliminate tariffs, quotas, and supply management. Essentially, trade liberalization has allowed the flooding of the agricultural market through overproduction, and price reduction through intense competition. In turn, the prices paid to growers for agricultural commodities, such as grain, beef, corn, and sugar, collapse. This allows a handful of agribusiness corporations to buy agricultural commodities from the international market at rock bottom prices. These corporations then reap enormous profits while the cost to you, the consumer, remains unchanged. Meanwhile, family farms and ranches struggle to compete in the international arena.

These trends have been evident since the implementation of NAFTA, the North American Free Trade Agreement, made between the US, Canada, and Mexico over ten years ago. One major outcome of NAFTA is that export crops are being sold for less than it costs farmers to produce them, even though the cost to consumers has remained roughly the same. For example, the average price of 2003 US wheat exports was 28% below the cost of production. Large agribusiness corporations are reaping the benefits of lower commodity prices, while American taxpayers are footing the bill to make up the difference. The vast majority of farm subsidies, however, are being distributed to a small minority of very large producers. Many family owned farms and ranches are going out of business. According to Public Citizen, a national consumer advocacy organization, more than 38,000 small farms have gone under in the US alone since the inception of NAFTA.

This year, Congress is discussing the implementation of another free trade accord, the Dominican Republic-Central American Free Trade Agreement, also known as DR-CAFTA. DR-CAFTA would increase trade between the US, the Dominican Republic, Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua. DR-CAFTA has already been approved by the Bush Administration, but must pass in both the House and the Senate before being ratified.

Agricultural policies ushered in under DR-CAFTA would threaten the livelihoods of family farmers and ranchers in the US and across Central America and the Dominican Republic. Montana’s sugar beet industry stands especially at risk, as the implementation of DR-CAFTA would significantly increase imports of sugar from Central America and the Dominican Republic. DR-CAFTA is another step towards placing the control of Montana’s agricultural commodities, a huge part of the state’s economy, in the hands of the international market.

DR-CAFTA includes terms prohibiting state purchasing policies that would favor locally produced agricultural products, renewable energy, prevailing wage, and other preferences. Because government procurement is explicitly a function of sovereign governments, states can choose whether or not to bind their procurement terms to the provisions of regional trade agreements. The good news is that the State of Montana has declined to be bound by DR-CAFTA’s procurement provisions. In fact, 31 states have rejected DR-CAFTA’s procurement terms because they would undermine the authority of states to democratically decide how taxpayer dollars are spent.

The ultimate decision on the enactment of CAFTA will be made in Congress sometime this year. While this agreement deals with countries that have relatively small economies, DR-CAFTA is seen as a template for other trade agreements, such as the Free Trade Area of the Americas, which would extend trade negotiations between all countries, excluding Cuba, in North and South America. The FTAA would be the most far reaching trade negotiation in history.

There are many warning signs in the wake of existing free trade agreements: American farmers and ranchers have suffered stagnant or worsening trade flows and declining incomes. Food availability and food security are being based on the whims of the market. The profits of large agribusiness corporations are growing, while thousands of family farms, ranches, and the local economies that they support, are put at risk. Free trade agreements are of special concern to Montana sugar beet producers and processors, soybean farmers, and ranchers, as markets open up to cheap imports of raw commodities.

Now is a decisive time for the future of Montana agriculture. Policies are needed to support Montana’s farms and ranches, promote food security, and preserve Montana’s local character. You can help by exercising your vote as a food citizen. Visit a local farmers’ market, eat at a restaurant that highlights locally produced menu items, or create a 4th of July feast featuring Montana-grown wheat, beef, and vegetables. Please urge Montana’s legislators to vote no on DR-CAFTA in the House and the Senate.

To learn more about DR-CAFTA and other free trade agreements, visit the Public Citizen website at "http://www.citizen.org" You can also find information about trade and agriculture on the web at "http://www.iatp.org

I’m Beth Neely for the Alternative Energy Resources Organization. AERO is a grassroots organization working to help create farm, food, energy, and growth solutions for communities throughout Montana. We welcome your comments and perspectives. For more information about our programs, call us in Helena at 406-443-7272.