Economist talks trade, ag policy at National Farmers Conference

AMES, Iowa — During the 2017 National Farmers Convention, economist and farmers talked trade and agricultural policy for the new year.

The National Farmers Convention was held Jan. 25-27, in Springfield, Missouri.

Farm Bill

Dr. Harwood Schaffer, University of Tennessee Agricultural Policy Analysis Center, examined farm exports and the balance of trade during the past four decades.

He provided a review of farm bill policy programs since the 1970s, and proposed a market driven inventory system for the next farm bill.

Trade. “In the 1970s, government officials told farmers that exports were the answer to their low price problems,” Schaffer said. But, by the 1980s, it was no longer effective.

Officials began to alter farm programs by lowering loan rates and giving export credits so American producers could recapture foreign markets —  but that didn’t work for long, either,” he said.

Producers then attempted to feed their grain into livestock, and export it to earn higher returns. However, that had little effect on their bottom line.

Beef exports did increase, however, beef imports went up as well. NAFTA trade deals were supposed to be positive for U.S. producers, but our balance of trade for beef in 20 countries was still negative, Schaffer said.

Tariffs

Brian O’Shaughnessy, co-chairman of the Coalition for a Prosperous America and chairman of Revere Copper Products, mirrored some of Schaffer’s concerns regarding trade.

“The free-trade fever began building in 1995, when tariffs were eliminated by participating countries in the newly formed World Trade Organization,” O’Shaughnessy said.

America was outsmarted when it signed on to WTO because the U.S. has no value-added tax, he said.

But, when a product with a $100 value is sold to the U.S. from Mexico, that same VAT rebates $15 to Mexican producers, which means their cost to sell to the U.S. is only $85.

He pointed out the VAT tax, which averages 19 percent in the world, was allowed to continue under WTO rules, because it was considered a consumption tax, and not a tariff.

But in reality, VAT is really a tariff on U.S. goods going into a foreign country.

President’s address

National Farmers President Paul Olson, Taylor, Wisconsin, lauded the merits of commodity supply management and producing for consumer demand, and he emphasized organizational growth in 2016.

He recognized the expertise of commodity risk managers and marketers in the grain and livestock divisions, and said to members, “Set a price. Only produce what the market will bear. Don’t overproduce.”

The organization proposed a supply management plan for dairy producers, and recognized Organic Valley for managing the organic dairy supply.  It can work in the conventional dairy market segment, as well, he suggested.

Working with consumers to produce a product that they want will help consumers and farmers form a stronger connection said Olson.

He said when enough consumers realize family farmers need their support in the grocery aisle, and that it will help rural America, they will want to buy from our type of farms, he said.

Olson also noted a growth in membership.

“Two things fuel this organization,” he said. “It’s people and production.”

Policy

National Farmers Organization members voted in favor of the following agricultural policy positions:

Crop insurance. Affordable crop insurance. Members support current funding levels. National Farmers supports premium rates commensurate with organic payments available for losses incurred

Grain Policy. Price support levels for major storable commodities based at 85 percent of production costs. USDA corn loan rates of $4 per bushel, wheat $6 per bushel, soybeans $9 per bushel. Supports re-enactment of a farmer-owned grain reserve. Reserve isolated from the market and supply of last resort. Only released at 120 percent of the above proposed loan rates. Full investigation by Senate and House Agriculture committees of fraudulent organic grain imports.

Dairy Policy. Implementation of a growth management program that uses price as an incentive to manage production (a form of two-tier pricing)

Energy. National Farmers Organization opposes any changes to the Renewable Fuels Act (RFA).