American Farmers Fight for a New NAFTA
And the more stable food system it could support.
Whether you’re a family farmer, a backyard-garden foodie, or a food system reformer, the outcomes of upcoming NAFTA renegotiations could have huge impacts on the American Food System.
On an almost unthinkable number of issues, folks across agricultural, whether they raise livestock, grains, or fruits and vegetables, tend to agree. The ag committees in Congress are considered some of the most bipartisan in the government- partly as a result of these wide-spread agreements. But there is a key issue that triggers fierce internal disagreement. It is (ironically) the North American Free Trade Agreement.
The Lovers
Grains and Livestock
If you’ve been following the agricultural reaction to NAFTA, you’ve probably heard the words “Do no harm” once or twice (or an infinite number of times). For large swaths of the industry, including most grain farmers and livestock producers, NAFTA has led almost exclusively to huge gains. Canada and Mexico are two of the biggest markets for US corn and soybeans, as well as a significant amount of beef, pork, and poultry.
These industries could be devastated by significant changes to the trade agreement, and though their representatives are generally confident about the administration’s understanding of their needs, there are concerns that gains in other sectors (notably manufacturing), might be “traded” for concessions in agriculture. Officials have said that will absolutely not be the case, but it’s a possibility that will be closely watched by the industry.
Transporters
And critically, it’s not just the direct producers of goods traded with our closest neighbors that will be effected. US transporters have also spent more than two decades building immovable infrastructure to support the amount of trade we do with our neighbors, like cross-border rail lines, that may be put at risk if an agreement isn’t reach or retaliations occur. More on that here:
The Haters
The more interesting groups (and the more famous, thanks to some tweets by the President) are those that might be described by economists as “the losers of trade.”
Fruit and Vegetable Growers
There are a number of groups that would fall into this category; including dairy, lumber, sugar, and a lot of fresh fruit and vegetables. Florida tends to be the epicenter for a lot of these discussions, as it shares a very similar climate and growing season with Mexico (being on the same latitudinal lines as much of the country), and so produce like tomatoes, peppers, and strawberries tend to be ready for harvest at the same time in the two regions. That means there is more direct competition, and with the benefits of cheap labor, Mexican farmers (or in some cases, US farmers with farms in Mexico) tend to beat US prices.
But US farmers say this isn’t the whole story. They’ve accused Mexican farmers of dumping (selling for less then the cost of production) in the US, and point to this as the reason for the 40% decline in US tomato production in the last two decades. They are arguing for tougher protections for their industries in a new NAFTA, and also for stronger, near-term enforcement of the existing agreement.
Sugar Farmers
The sugar industry has also been fighting with Mexico over the last several years about fair trade practices. Earlier this year, an agreement between US and Mexican negotiators was reached to prevent Mexican sugar producers from dumping their product in US markets. (Sidebar: One interesting outcome of this conflict should have been lower prices for consumers on sugar and sugar-sweetened products in the US. It hasn’t happened. The American Sugar Alliance blames retailers and candy-makers for crippling sugar farmers and not passing the savings on to consumers.)
Dairy Farmers
Dairy farmers fawned over the President when he held his Twitter mega-phone up to their issues with Canada earlier this year, and since then, former Agriculture Secretary under President Obama Tom Vilsack has been fighting for the dairy industry from his perch as CEO of the Dairy Export Council.
The dairy issue in a nutshell: Canada has strong, domestic supply management systems in place that protect Canadian farmers and encourage production, effectively preventing US farmers to sell dairy products (especially refined products like milk powders used in processed foods) into the Canadian market. The problem is partially an issue of Canadian non-tariff barriers, and partially one of the agreements age- some of the categories of products now being traded didn’t exist when NAFTA was originally signed, and so don’t fall under the purview of the agreement. When you hear about the “modernization of NAFTA”, this is the kind of thing they’re talking about.
But what caused the schism?
This unusual divide in the ag industry points to something fundamental that’s sure to come to a head under an administration whose primary focus for agriculture is to increase international trade. Labor.
One of Ag Secretary Sonny Perdue’s favorite phrases is, “You grow it, we’ll sell it.” For some ag sectors, those are promising and vital words. With corn and soybean prices lower than they’ve been since the farm crisis of the 1980s (and even worse after a recent USDA report revealed production is not down as far as expected do to a Midwestern drought, causing prices to plummet), farmers need to find places to sell their crop at better prices if they plan to stay in business.
The livestock industry too has realized that US consumers are approaching (or have already reached) “peak meat”, and that if they want growth and to gain access to the burgeoning, meat-starved middle classes of countries like India, China, and Brazil, they need agreements that create no barriers to US agricultural exports.
But fruits, vegetables, and dairy are different. Those industries still require significant amounts of farm labor. Dairies require (at least) 16 hour a day staffs to man milking machines, and fresh produce still has to be picked by hand (whether it’s garlic, peaches, or tomatoes). Farmers have struggled to control costs while employing the people they need to work their operations, and it’s generally led to a patchwork of second-best solutions. Fruit and vegetable farmers often outsource harvesting to work-crews, which pay workers (documented and undocumented laborers alike) by the piece, often leading to wages significantly below minimum wage. And even so, US growers can’t compete economically with their Mexican counter parts.
Farmers do have options to directly hire guest workers on their operations- through the federal H2-A visa program. The system, by general industry and labor agreement, is broken. Two possible changes are currently being proposed (flying in the face of President Trump’s “high skilled workers only” bill, which could be devastating for US farms). More on those here:
Another possible solution to this issue that’s been bandied about in the media is that the Trump team could fight for Mexican labor rights. That would, in effect, make Mexican fruit and vegetable products more expensive, and give US farmers more of a chance to compete.
What does this mean for the American Food System?
An end to NAFTA (which was, if you recall, on the table at one point), would devastate US farming in the short term. With huge quantities of grain and livestock with no place to go, prices would crash, farmers would default on loans, farmland values would plummet, and investors would feel the pain throughout the country. Millions of jobs would be lost.
The most cynical might see that kind of crash as an opportunity to fundamentally upend the system- but I would argue that it could be so devastating, not just to farmers themselves but to rural communities more broadly and to the stability of our overall food system, that it might be, frankly, impossible to recover. It would also be a tremendous risk to our national food security.
There is already evidence that just the specter of a potential NAFTA exit is hurting US farmers. Mexico has repeatedly discussed that they are looking to Brazil and Argentina to fulfill their needs to staple grains. Farmers across the Midwest are already seeing lost sales. And this is on top of being boxed out of other trade agreements- the EU and Japan’s recent deal have more or boxed US farmers out of those markets, and with the 11 TPP countries now engaged in 27 individual negotiations, this surely won’t be the last blow to US participation abroad.
Considering a renegotiated NAFTA, modernization is essential. The world has fundamentally changed since NAFTA was signed in 1993, and updating the language to include and respect technological advancements will be key. In light of ongoing issues like the Mexican papaya salmonella outbreak, negotiators need to make updates to sanitary and phytosanitary requirements.
Whether negotiators will be able to score victories for US dairy or tomato farmers is less clear. Whether we can sort out the labor discrepancies between our three countries may be the most important factor, and that might require making concessions and developing new systems beyond the scope of the agreement (read: immigration reform).
America’s smallest and most locally-focused farmers may be the most shielded from what may or may not result from upcoming negotiations (which are expected to wrap up by the end of the year). If you buy all your food from local farmers markets or your CSA, you probably wouldn’t feel the effects of a significantly better or worse NAFTA as a result of it’s impact on US ag. (Unless you have money in almost any kind of diversified investment fund, which tend to have investments in farmland because of their high rates of return.)
But these negotiations may also leave room to plan for the kind of food system we want in the future. A more stable one, that can be a part of international interdependence without being solely dependent on it. One that promotes agile change in response to changing consumer demands, rather than encouraging farmers to keep growing a crop with promises to find a market for it after. And one that doesn’t actively disadvantage the producers growing the food we most need to see on American plates- fruits and vegetables.
If these sound like worthy goals, keep an eye on NAFTA in the coming weeks. Active voices in this conversation should be heard.
If you liked this story- feel free to click the green heart below, and I look forward to reading your commends! If you’re curious about the hi-bred print/broadcast reporting I’m doing here, check out my post on moving to DC to report on agriculture issues. Sarah Mock
