Trade and retaining America’s market share for agricultural exports was a dominant theme Thursday at a Montana agriculture summit organized by Sen. Steve Daines, R-Mont. that featured newly installed Agriculture Secretary Sonny Perdue as a keynote speaker and Chairman of the Agriculture Committee Sen. Pat Roberts, R-Kan., as well as a wide variety of other voices in the industry.
“When we talk about changing a trade agreement, it does two things,” said Matt Gibson, vice president and general manager of Bunge. “It forces Mexico to look for a backup plan, because they are not going to sit still and wait until a decision is made.”
Those conversations are necessarily with America’s competitors, and the mere fact of them begins to put the squeeze on opportunity.
“Once they start talking together, countries might find a solution and it squeezes prices,” Gibson said. “It shows up in the prices people are able to pay our U.S. farmers and ranchers. We need to be careful how we go about it.”
And not only are NAFTA members now looking in directions other than America, but TPP countries, are as well.
“TPP is moving forward without us,” said Kent Bacus, director of International Trade and Market Access the National Cattlemen’s Beef Association.
“What does it mean for us?” he asked. “If TPP moves without us, now some of our competition, specifically Australia and New Zealand are competing for some of the same cuts. We are putting our market share at risk.”
Michelle Erickson Jones, vice president of Montana Grain Growers Association, said she hopes that the bilaterals that willbe pursued can still incorporate some of the measures that were part of TPP and NAFTA, which were in some cases taking American laws and applying them in southeast Asian countries that have not had to comply with them before.
Among these were phytosanitary language, rapid dispute resolution measures, and a tariff rate quota not just for wheat, but barley as well.
“It’s not a significant amount of barley, but we had never imported that in Japan, so just getting some was the important thing,” she said.
She added that she has heard that if TPP goes forward without the US, America could be losing their entire market share for the product in the Pacific Rim for the next seven years. “I hope that is only a doomsday prediction,” she said.
Roberts, Perdue and Daines all sought to reassure their constituents on trade concerns throughout the speech, pointing to the formation of a new undersecretary for trade under the USDA’s umbrella, as well as recent successes on the world stage with China finally agreeing to set a date for opening its market to US beef — once details and logistics have all been squared away.
Daines said people did not realize how much teamwork went on behind the scenes to open that door. Daines recounted how he was on a plane to China, a cooler of beef in hand to personally deliver to Chinese leaders, while members of Trump’s team at Mar-a-Lago meanwhile kept him informed at stops along the way as to what was being hammered out with Trump and Chinese Premier Xi Jinping.
“This is a team effort,” he said. “It’s not just any one person.”
Roberts, while panning Trump’s agriculture budget, still maintained that the president is with America’s farmers and ranchers.
“We need an administration, and now have one, that is a partner and not an adversary,” Roberts said. “How many times have we asked for help with Waters of the US and the Endangered Species Act?”
Roberts was disappointed with the administration when he learned cuts to crop insurance were in the proposal despite his specifically telling those crafting it not to cut that and said he told aides to “throw it back over the transom” when he found out.
Perdue agreed that the agriculture budget did not cut the right areas and said Roberts would be helping the administration with that.
“Agriculture is vital to the U.S. economy, and trade is vital to the agricultural economy and that is where we are going to focus,” Perdue said. “I’m a you grow it and I sell it kinda guy.”
Perdue touted the partnerships the USDA is setting up and set that with a new undersecretary for agriculture position in play, the agency is set to take the most holistic approach he’s ever seen to world trade. Meanwhile, he said, he wants the USDA’s customer service to come up several notches, and he named off three of his favorite restaurants that exemplify the qualities he’s looking for. These included a chili dog restaurant where the employees are quick to find out what the customers want, a waffle house where despite high demands a high-quality product is ever-ready, and Chick Filet, where he said they deliver a good, quality product with pleasure.
Roberts said it is important to remember the nutrition component to both the Agriculture Committee that Roberts leads as well as the USDA itself.
“When we talk about producing, we want to have a safety net,” he said. “I want one for all Americans. It’s not in the heart of America to want to see anyone go hungry, and we don’t want that to happen. Americans are compassionate and the USDA will be compassionate as well. On the other hand, I don’t think it should be a permanent lifestyle either.”
To this, there was a round of applause from the audience, and Perdue paused before continuing .
“I don’t know of a single farmer that I’ve ever met who would rather have a government program than a good crop at a fair price, and that is what we hope to get,” Perdue added. “We created a Secretary of Trade because we feel like if you produce it, it is our obligation to find a market and sell it and find a good price.”
That said, a safety net is vital to the system, Perdue said.
“You can do everything right,” he said. “You can put in all the right inputs, you can use the best technology, the best precision agriculture. But you are still vulnerable to the weather. Floods, hail, drought — you can’t keep those things away and so that is why you need a safety net. People don’t understand the equity you put into the ground every year in hopes of a crop. That is why we need a safety net for farmers, producers and ranchers.”
He described the Area Risk Coverage and Price Loss Coverage as important progress, but added that farmers need to take them with a dose of tough love.
“Let’s face it, you don’t buy home insurance hoping the house burns down,” he said. “Neither should we buy crop insurance expecting our crops to fail. Insurance is a safety net for when things, when disasters and tragedies hit. We have to get away from the mindset that we paid a dollar for it so we want to get a dollar-ten back.”
Perdue said as governor of Georgia he is proud to say he grew a $20 billion budget to $16 billion.
“We did just what you do every day,” he said. “We did what it took to make it work.”
He will apply the same philosophy to the USDA budget to get something that works with the funding allowed, because that, too, is important to the future of America.
“Let’s face it, folks, look yourself in the mirror,” he said. “Do you want to kick a $20 trillion debt down the road to your grandchildren? I don’t think you do. I know I don’t. I think it’s immoral to continue to do that. So I applaud President Trump for laying it on the table. He may not have chosen the best places to cut, but Sen. Roberts will help him with that.”
In addition to the emphasis on trade and preserving crop insurance, Perdue said his office is cataloguing regulations that present impediments to producers, and those will be targeted for change or removal as appropriate.
“We will look at removing or changing those so when you get out of your pickup every morning you don’t have to worry about whether you are violating some rule or regulation,” Perdue said. “Won’t that be nice? We want to unleash you. We want to unhandcuff you.”
Perdue said farmers are better stewards of the land than anyone, because they are trying to leave their land better for the next generation. He recalled challenging his father one time about putting down amendments on a rented field they weren’t sure they’d be farming the next year. “‘Son,’ he said, ‘Let me tell you something. We are all stewards, and it is our responsibility to leave the land better than we found it.’ And that is what I think you all do. You leave it better than you found it, so thank you all for that.”