New Trade Agreement Could Help Tennessee Farmers

 

This year Tennessee could realize the highest production of corn on record since 1917 if forecasters are right, so says the USDA Agricultural Statistics Services for Tennessee. It is being forecasted that the state’s corn crop will see a harvest of 100 million bushels, and during the recent weeks of dry weather, Tennessee’s farmers are making significant progress in getting this year’s crop in the bins. More than 730,000 acres will be harvested this year, which is 90,000 acres more than last year. The expected yield per acre will average 137 bushels, making for a very good return compared to previous seasons.

Nationwide, USDA estimates farmers will harvest 83.9 million acres, a drop of 452,000 acres from earlier estimates. With flooding during the spring in parts of the eastern Corn Belt, many farmers in that area were unable to plant all of the acreage they intended to plant. The American Farm Bureau reports that the USDA still estimates that farmers will produce 12.433 billion bushels of corn this year even with the extreme weather conditions that occurred this year.

As farmers across the state continued to harvest their crops under harvest moon conditions, they felt they received good news from Washington with the congressional ratification of three bilateral free-trade agreements between the United States and Korea, Colombia and Panama, as well as approval of Trade Adjustment Assistance, according to the American Farm Bureau Federation.

“Now that Congress has approved all the components of the trade package, swift implementation is critical so we can restore a level playing field for U.S. farm exports to these three nations,” said AFBF President Bob Stallman.

“Over the past four years, Korea, Colombia and Panama have opened their doors to our competitors,” Stallman explained. “Congress and the administration have now given us the opportunity to improve our competitive position in these markets. The economic growth generated from the agreements will improve our economy and create jobs here at home,” he said.

Combined, the three FTAs represent nearly $2.5 billion in new agriculture exports for America’s farmers and are expected to create economic growth that could generate support for up to 22,500 U.S. jobs.

The National Corn Growers Association (NCGA) reports that the United States continues to be the largest producer and exporter of corn in the world, exporting 50.4 million metric tons last year. In a release from NCGA, they state since the EU-Korea trade agreement went into effect July 1, European exports to Korea have increased 36 percent from a year earlier. U.S. farmers have already lost more than $1 billion in sales to Colombia in the two years since that country implemented a trade deal with Argentina and Brazil. The Colombia-Canada Free Trade Agreement that took effect August 15 has also put U.S. workers and farmers at a disadvantage. “Prior to Congress’ passage of the FTAs, farmers watched as other nations received access to markets over the United States,” NCGA President and Illinois corn farmer Garry Niemeyer said.  “We need to keep and create jobs in America.  The FTAs will help us achieve that.”

Some highlights of the legislative action taken reported from the House Agriculture Committee Press office are:

Right now, Colombia imposes duties on all American agricultural products. They range from 5 to 20 percent.  Yet the U.S. still sells more than $830 million in agricultural products there.  That is because America’s farmers and ranchers produce high quality crops and livestock, and those goods are in demand.  Under this agreement, Colombia would eliminate tariffs on 70 percent of U.S. exports. Also, American agricultural products would no longer be subject to tariffs and would become more cost-competitive. The Farm Bureau estimates that the U.S. will see $370 million more in farm exports to Colombia annually.

More than 60 percent of U.S. farm exports to Panama face some sort of duty or tariff.  Those tariffs average 15 percent, but they can be as high as 70 percent on meat, 90 percent on grain, and a staggering 260 percent on poultry.  Meanwhile, more than 99 percent of Panama’s farm exports enter the U.S. duty free.  So this agreement not only creates new opportunities for America’s farmers and ranchers, but it levels the playing field for American exporters.  

Korea is the fifth largest market for U.S. agricultural exports.  But currently, America’s producers face an average tariff of 54 percent when exporting to Korea.  Similar goods from Korea enter the U.S. at an average rate of only 9 percent. Passing this agreement corrects that imbalance and provides better access to Korea’s 49 million consumers.  The Farm Bureau estimates that once the agreement is fully implemented, the U.S. could see $1.9 billion in increased farm exports.

In the congressional ratification vote Tennessee’s Senators Alexander and Corker voted for the three bilateral free-trade agreements and had earlier in the session voted for the approval of Trade Adjustment Assistance. Tennessee’s Congressmen Black, Blackburn, Roe, Cooper, DesJarlais, Fincher, and Fleischmann voted yes for the Korea, Panama and Colombia Trade Agreement with Duncan voting yes on Panama only and Cohen voting no on all the agreements. Congressmen Cohen, Cooper and Roe voted yes for the approval of the Trade Adjustment Assistance legislation with all other Tennessee congressmen voting against the proposal.

 

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– Pettus L. Read is editor of the Tennessee Farm Bureau News and Director of Communications for the Tennessee Farm Bureau Federation. He may be contacted by e-mail at pread@tfbf.com