Currently browsing posts about: Food-trade

I am ever surprised by the extent to which Trump Administration’s policies directly harm its core supporters.  Two recent reports tell the story.

One comes from a group called Tariffs Hurt the Heartland, which has produced an accounting of the losses to businesses in Texas as a result of Republican trade policies—$424 million gone, just in August. 

Some of this affects farmers:

Scott Frazier, a south Texas farmer and Secretary-Treasurer of the Texas Farm Bureau, warned that tariffs will have long-term consequences for agriculture by shuttering the foreign markets that farmers in Texas and across the country depend on.  One quarter of our agricultural products grown in the U.S. are exported to other countries. The economic well-being of American agriculture depends on maintaining and strengthening our export markets, and farm and ranch families depend on this to survive.

I was struck last week by an article in the Wall Street Journal with this intriguing title: “Food Banks Reap Unexpected Bounty From Trade Disputes.”

I thought this was an especially poignant example of food politics from a food systems perspective—looking at the big picture context of what we eat, from production to consumption to waste.

Our current trade war with China is having a series of effects:

• China has retaliated by putting import tariffs on US food products, reducing their sales in that country.
• Because we greatly overproduce food, and depend on exports to sell it, we now have a glut of products that can’t be sold—soybeans mainly, but also pork, apples, cheese, figs, peanut butter, orange juice, and others.
• The Trump Administration says it will help farmers hurt by the trade dispute by buying their products to the tune of $1.2 billion so far.
• Food banks have no idea how they can handle all of what will be dumped on them—950 million pounds on top of the 700 million pounds they usually get—because they do not have the money to process and store the donations (one organization says this costs 23 cents per pound of food).
• The food bank trade association, Feeding America, is calling for $200 to $300 million to pay for distributing the excess burden of food donations.

None of this makes sense to me.

Wouldn’t it be a whole lot better to

• Prevent or end this trade dispute?
• Ensure that food banks are unnecessary?

Alyshia Gálvez.  Eating NAFTA: Trade, Food Policies, and the Destruction of Mexico.  University of California Press, 2018.

This compelling book, by a Lehman College professor of Latin American Studies, links US trade policies to the destruction of Mexico’s corn economy and consequent destruction of Mexico’s traditional food culture, and shows how that destruction affected immigration, the border wall, drug wars, and, ultimately, public health.

Mexican food—real Mexican food—“is falling out of reach for many Mexican people,” she says.

Trade policies, in this case the North American Free Trade Agreement (just signed), not only affect what people eat, but also their health.

Gálvez starts by explaining

Using a Latin American studies frame, we can see that ever since the European conquest, ideas about citizenship, responsibility, and capability in the hemisphere have been viewed through the lenses of racialization, class, and gender.  The same social groups viewed in the colonial and early independence periods as incapable of assuming the responsibilities of citizenship happen to be the same people now blamed for their own susceptibility to diet-related illness.

Gálvez gave a talk at NYU earlier this week at which she passed around a basket of traditional corn tortillas, obtained for $7 at Whole Foods.  They were delicious.   These, she pointed out, are almost impossible to get here or in Mexico, having been almost entirely replaced by commercial tortillas, having nothing like the original flavor and texture.

NAFTA dumped underpriced US corn on the Mexican market, undercut local prices, and put farmers out of business.  Without local corn, mills went out of business.

The other speakers at her session, Mireya Loza and Krishnendu Ray of my NYU department, emphasized how NAFTA has induced irreparable losses, not only of small-scale farming and the livelihoods of small farmers and corn millers, but also of the food habits that used to define Mexico’s indigenous foodways.

They will be using Eating NAFTA in the courses they teach.  Lucky students.

If you want to understand what “free trade” is really about—on the personal as well as the political level—this is the book to read.

I find the details of trade policy almost impossible to understand (so many arcane rules, so many countries), and am grateful whenever I read something crystal clear.

Politico explains (behind a paywall, alas) how our trade war with China is hurting US soybean farmers, beginning with:

The good news: The European Union is buying lots more US soybeans than it used to.  Purchases are up 133% over last year, and now account for 52% of EU soybean imports.

The bad news: The EU is buying US soybeans because they are cheap.  Because China is not buying US soybeans, there is a glut; prices have fallen by 20%.

Estimates are that the EU will buy $2.5 billion this year.  But last year, China bought $12.3 billion in soybeans.  That’s nearly a $10 billion loss unless other buyers can be found (the estimate is a $7 billion loss).

China is now buying soybeans from Brazil, and at premium prices.

Here’s what the American Soybean Association has to say about all this.

One more indicator:  Politico also mentions an article in the Milwaukee Journal Sentinal detailing how more than 2,500 US dairy farmers have resorted to GoFundMe campaigns to save their farms.

I wish we grew more food for people instead of food for animals or fuel for cars, and that our agricultural policy linked to health policy.

Maybe if we did that, we wouldn’t be in this situation.  But GoFundMe campaigns?

Maybe we just need real agricultural policies.

Recall that to mitigate the damage to U.S. agriculture caused by our current tariff disputes, President Trump promised to give affected farmers $12 billion.

The USDA has now set up its Trade Mitigation Programs.  As seems invariably to be the case, these are not simple; they involve three separate programs:

• The Food Purchase and Distribution Program
• The Market Facilitation Program
• The Agricultural Trade Promotion Program

Food Purchase and Distribution Program

The government (taxpayers) will purchase up to $1.2 billion in commodities and then distribute them to food assistance programs.

USDA issued a list.  Here are some selected examples, to which you must add three zeros (amounts are in $1000s):

The big winner here is pork, hit badly by the trade disputes.

The Market Facilitation Program

This one gets a bigger slice—$4.7 billion.

Here, the big winner is soybeans — $3.6 of the $4.7 billion in payments.  Corn producers are lpretty much left out.  I can’t imagine tht they are pleased.

The Agricultural Trade Promotion Program

All I’ve seen about it is that USDA will spend $200 million on foreign market development.

What are we to make of this?

Whether trade groups are for or against this depends on how much of this pie they get.  Overall agricultural losses will be greater than $12 billion, so everyone loses, but some more than others.  The Environmental Working Group has filed a FOIA request for information about how USDA made these decisions.  Can’t wait to see what they get.

Only half of that has been distributed so far.

Let’s hope the lobbying is transparent so we can see who is doing what.

The Documents 

• USDA’s Announcement
• Market Facilitation Program: Final rule
• Market Facilitation Program Payments to Producers
• Agricultural Trade Promotion Program

President Trump says he will fix the retaliation damage his trade policy has caused for agriculture with $12 billion added to USDA programs.

The New York Times quote of the day:  “This trade war is cutting the legs out from under farmers and the White House’s “plan” is to spend $12 billion on gold crutches.”  –Sen. Ben Sasse, R-Nebraska

The USDA explains that

These programs will assist agricultural producers to meet the costs of disrupted markets. This is a short-term solution to allow President Trump time to work on long-term trade deals to benefit agriculture and the entire U.S. economy.

Politico (behind paywall) quotes USDA Secretary Perdue: “”The programs we are announcing today are a firm statement that other nations cannot bully our agricultural producers to force the United States to cave in.”  It explains that the 3-part plan will:

1. Provide direct payments to growers and producers of soybeans, sorghum, corn, wheat, cotton, pork and dairy.
2. Purchase fruit, nuts, rice, beef, pork and dairy products from U.S. producers for redistribution to federal nutrition assistance programs.
3. Put resources toward finding new markets for U.S. farmers to sell their products abroad.

Not everyone loves this idea.  Politico quotes Senator Ron Johnson (R-Wisconsin):

This is becoming more and more like a Soviet-type of economy here: Commissars deciding who’s going to be granted waivers, commissars in the administration figuring out how they’re going to sprinkle around benefits…I’m very exasperated. This is serious.

It also quotes Rep. Dave Reichert (R-Wash.) observing that the bailout does nothing to preserve market access lost as a result of the tariff policies.

Some in the ag community, they say, ‘That’s great, thank you for the help’ — except that the problem then becomes we’ve lost the market, so how do we get the market back?…That’s the question.

In general, agricultural groups view this as an inadequate short-term fix for a problem that won’t go away until Trump ends the trade war.

Former USDA Secretary Dan Glickman tweeted a link to a longer statement:

Rep. Chellie Pingree (D-Maine) is introducing legislation to ensure a fairer distribution of the bailouts.  How about some trade relief for fishermen?

In the meantime, The Street reports the effect of this plan on the market: Soybean futures for November delivery settled more than 1% higher; Deere & Co. and other farm equipment stocks also went up.  CBS News also notes the rise in ag stock prices.

Analysts generally view this as a move to maintain Trump’s base of support among soy and corn producers in the lead up to the midterm elections.  It solves a short-term political problem, but does nothing to protect US agricultural markets.  See, for example, accounts from

• The New York Times editorial board
• Jerry Hagstrom “The Trade War’s High Costs.”
• Global Meat News
• Associated Press
• Washington Post 
• Colbert: Don’t even try to out stupid Donald Trump

The NAFTA agreement meant that the US, Canada, and Mexico would not impose tariffs on each other’s products.

But the Trump Administration has announced tariffs on steel and aluminum imported from Canada and Mexico.

Canada is retaliating.  Here is its list of US products subject to new tariffs.  Table 2 lists agricultural products, among them,

• Yogurt
• Coffee
• Prepared meals
• Maple sugar
• Pizza and quiche
• Chocolate
• Waters
• Whiskies

Mexico also is retaliating.  Its list (in Spanish) includes, among others,

• Cheeses
• Apples
• Ham
• Pork
• Potatoes
• Whisky

This means that these products will be more expensive—a lot more expensive—in Canada and Mexico and, therefore, will not sell as well.

Pork producers are particularly distressed.

Last week, the New York Times published an article about how the US was inserting provisions in NAFTA negotiations to restrict the ability of Mexico to put warning labels—similar to those in Chile and other countries—on ultraprocessed “junk” foods.

Urged on by big American food and soft-drink companies, the Trump administration is using the trade talks with Mexico and Canada to try to limit the ability of the pact’s three members — including the United States — to warn consumers about the dangers of junk food, according to confidential documents outlining the American position.

The American stance reflects an intensifying battle among trade officials, the food industry and governments across the hemisphere. The administration’s position could help insulate American manufacturers from pressure to include more explicit labels on their products, both abroad and in the United States. But health officials worry that it would also impede international efforts to contain a growing health crisis.

In response to questions by Rep. Lloyd Doggett (Dem-Texas), US Trade Representative Robert Lighthizer argues that front-of-package labels are a form of protectionism.

Really?

A more compelling reason is that food companies are worried about the possible spread of front-of-package warning labels like those in Chile, Ecuador, and other countries.

I have a long-standing interest in front-of-package labels and wrote about opposition to the warning-label movement recently in a commentary in the American Journal of Public Health.

The Center for Science in the Public Interest (CSPI) issued a statement:

More countries, and certainly the United States, Canada, and Mexico, should give consumers easy-to-read front-of-package labeling that quickly communicates the information they need to avoid diet-related diseases…This is not an “America First” policy; it is an “Industry First” policy, conducted at the expense of the health of consumers in the U.S. and abroad.

Julia Belluz (Vox) describes the effects of a provision like this on Canada’s front-of-package labeling proposals.

Mexico’s outstanding food advocacy coalition, the Nutritional Health Alliance, argues that this pro-industry effort to block warning labels poses a serious threat to consumer rights and public health.

It held a press conference last week on this issue and has produced background documents (in Spanish, but it’s always fun to try Google Translate):

• Descarga anexo de etiquetados de advertencia aquí (examples of FOP labeling from the Americas region)
• Descarga nota jurídica en torno a la homologación de etiquetados EU-México aquí (legal commentary on how such treaties violate health and consumer rights and are illegal in Mexico)
• Descarga comunicado de prensa respectivo aquí (press release)