D4—Lancaster Farming, Saturday, February 21,1981
NEWARK, Del. Agncultural
trade, involving both exports and
imports, is a major determinant of
farmer and consumer welfare in
the United States. Farmers as a
group derive a significant share of
their net income from sales m the
export market, says Delaware
extension resource economics
specialist, Gerald F. Vaughn.
The total impact is even larger,
as export sales expand the market
beyond domestic needs and
enhance farm prices accordingly.
Agricultural producers also
depend on foreign sources to add to
our supplie- of production inputs
such as liquid fuels, potash and
phosphate, agncultural chemicals,
and specialty machines. Without
these unports, farmers’ production
costs would be higher and
production efficiency would be
reduced here and abroad.
Consumers benefit from having
U.S. markets open to agricultural
imports. Imports bring us products
which are either not available in
the U.S. or are available from
foreign sources at lower cost.
Imports increase the range of
choice of products available to
consumers and keep domestic
producers competitive.
Since 1974 agriculture exports
have exceeded the value of
agricultural imports by over $lO
billion per year The positive
balance of trade in the agricultural
trade account helps finance the
importation of nonagncultural
products, such as oil, automobiles,
electronic products, copper, iron,
and many other minerals
Without these imports our level
of living would be significantly
lower.
Although the U.S. is the leading
world exporter of agricultural
products (value and volume), not
all U.S. agricultural producers
favor a free trade position as basic
U.S. policy.
On the one hand, American
cattlemen are opposed to unports
of frozen, boneless beef and have
lobbied successfully for meat
import quotas. On the other hand,
Exi
Spi
kni
cuttl
trade issues crucial to U.S. food policy
Ag
they want the government to follow
a hands-off policy toward exports
and are opposed to export controls
for cattle hides
Dairymen are opposed to un
ports of butter, cheeses, and other
dairy products.
Many soybean producers, who
depend so heavily on export
markets to use more than one-half
of their annual production, are
opposed to imports of palm oil
because u competes with soybean
oil.
These positions indicate
American farmers as a whole have
no unified policy stance in favor of
either free trade or protectionism,
he says. This is not surprising
when one considers the range of
products and diversity of attitudes
held by producers toward the
extent of government involvement
in agricultural markets.
Although U.S. trade in
agncultural products is carried
out by pnvane firms and in
dividuals, actions by the federal
government have a major impact
on both the volume and the terms
of trade.
Government affects the general
economic and political en
vironment in which international
trade is fostered and developed
The trading environment is af
fected more directly by use of
tariffs, quotas, trading
arrangements, the extension of
credit, concessionary sales and
market development work.
There is a trend toward
protectionism with respect to food
and agricultural policies in the
world today, Vaughn says.
Trade policies are designed to
accommodate domestic interests
and maintain political support and
stability within each country.
Given this trend, the U.S faces
three general policy alternatives
with respect to food and
agriculture.
1 - Encourage freer trade using all
means possible;
2 - Accept protectionist trends us
ing bilateral arrangements
and/or multilateral ar-
rangemenLs ui uuntate trade
wherever possible;
3 - Become more protectionist in
response to producer, consumer,
labor, and maritime initiatives.
If we choose to encourage freer
trade, the question then becomes
how to do it most effectively.
Policy choices available can be
grouped in four major categories.
Maintaining access to markets
Stabilizing world gram markets
Improving market organizations
for the conduct of trade.
Maintaining world food security
and improving relations with less
developed countries.
Maintaining access to world
markets is of potentially great
importance to Delaware’s broiler
industry, which has been exploring
more opportunities for exports in
recent years, says Vaughn
However, the European Com
munity’s Common Agriculture
Policy for poultry has had severe
adverse effects on U.S. poultry U S farm exports have ex
exports over the years in markets panded rapidly since the early
where EC subsidies have been 1970'5, with declining value of the
appbed. Now that the EC has dollar, increasing national m-
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remtroduced poultry subsidies on
almost a worldwide basis, there is
grave concern in the United States
that all of our export markets for
poultry eventually will be in
jeopardy.
Because trade is so important to
American agriculture, and
because domestic policies both in
this country and abroad have a
major impact on trade, new U.S
farm legislation will be watched
carefully by many people both at
home and abroad.
The impact of domestic
progiains on mtei national trade
should be recognized as one of the
key components m final decisions
on food and agricultural legislation
in 1981
Farm programs have been
concerned with price supports,
production controls and surplus
disposal programs, with little
attention given to their effects on
trade in agricultural products
Whether haylage, oatlage, corn sorghum,
alfalfa, or high-moisture gram silage m pit,
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Amos King
5138 Mt. Sidney Road, Lancaster, PA 17601
Phone 717-394-2389
LEVI G. HIGH
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Ephrata. PA. 17522
717-733-7213
comes, growing populations, and
changing import policies around
the world.
In the present economic and
political environment, it is crucial
that current and proposed farm
programs be considered m terms
of their effects on our balance of
payments and our capacity to
trade.
If internal prices are set too
high, trade will be restricted and
export subsidies and/or production
controls will be required Surplus
disposal programs on a large scale
will be costly and will have largely
negative effects on economic
development here, and especially
in the poorer, less developed
countries.
For a more complete discussion
of agricultural trade issues, in
cluding policy choices and con
sequences, contact Gerald F
Vaughn for Factsheet #5 of the
senes devoted to food and
agricultural policy issues for the
1980’s.
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