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Sweetening Life in the Red River Valley Since 1974

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From the International Sweetener Symposium:

SAN DIEGO — Three researchers who presented today at the International Sweetener Symposium criticized a controversial Heritage Foundation attack on farm policy. The Heritage plan, they said, would seriously injure farmers dealing with depressed prices, natural disasters, and foreign countries’ predatory trade practices.

John Gilliland, a trade attorney with Akin Gump Strauss Hauer & Feld LLP, discussed a study he published earlier this summer as a rebuttal to Heritage’s “Farms and Free Enterprise: A Blueprint for Agricultural Policy.”

Heritage argued that America should unilaterally eliminate its farm policy and crop insurance system in hopes that other nations would reciprocate and drop their farm subsidies and trade protections, Gilliland said.

“I think this is counterproductive,” he explained. “Unilaterally eliminating our farm policy without first securing commensurate gains from our trading partners would leave U.S. farmers and ranchers vulnerable to high and rising foreign subsidies, tariffs, and non-tariff barriers.”

He pointed to sugar as a prime example of a market grossly distorted by foreign subsidies and noted the irony of Heritage opposing a plan sponsored by Congressman Ted Yoho (R-FL) to eliminate America’s no-cost sugar policy in exchange for other nations ending their subsidies.

“It must be puzzling for U.S. sugar farmers that proponents of free trade would deride a zero-for-zero proposal that targets the complete elimination of domestic subsidies and tariffs,” Gilliland said. “Is this not essentially what the Heritage Foundation would consider as the desirable outcome for all U.S. commodities? Is this not what the United States proposes to do on tariffs in every free trade agreement it negotiates?”

Heritage’s suggested approach to agriculture is unlikely to gain much traction in Congress, he said, as lawmakers begin debate of the 2018 Farm Bill.

“Our current farm policy is necessary to ensure competitiveness during the period in which global trade rules are still evolving,” Gilliland said. “Congress will not turn its back on America’s farmers and ranchers.”

Brandon Willis, the former head of the USDA’s Risk Management Agency, agreed. He said U.S. farm policy is essential for the country’s food security and economic health, and said Heritage is playing loose with the numbers.

Willis, who is working on his own detailed rebuttal, said Heritage’s entire plan is built on the premise that farmers have high incomes and don’t face unique risks.

He pointed out that the think tank counted lots of non-farm income in its analysis and pulled data from non-farm households to exaggerate farm income.

“The fact is, farmers are really struggling right now with falling incomes and low prices,” he said. “If you look at the unbiased data from the USDA, you see that farmers lost money on the crops they grew 70 percent of the time over the past two decades.”

These economic realities necessitate a strong Farm Bill, which is exactly what Willis believes Congress will deliver.

“I think they are going to come down on the side of common sense, and I think they are going to say that the one-quarter of 1 percent we spend on a farm safety net is money well spent and has gone a long way in helping farmers manage risk,” he said.

Dr. Joe Outlaw of Texas A&M rounded out the panel, and said he and another researcher are in the process of quantifying the economic pain that Heritage’s plan would cause.

That study is expected to be completed later this year, and early results, he said, are eye opening.

“If the Heritage plan were ever enacted, we would lose more than 80,000 jobs with one-half coming from the ag labor workforce,” he concluded. “There would also be a major drop in asset values that will vary by region.”


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