David Schemm
NEED TRADE: Sharon Springs farmer David Schemm is president of the National Association of Wheat Growers. He says U.S. farmers need trade agreements with countries around the world to provide markets for the abundance they produce. He also argues that well-fed societies are the path to stability and world peace.

Commodity groups nervous about trade path forward

The new administration has not sent enough signals to let commodity groups know where it stands on trade agreements.

Editor's note: This is the second in a series of stories about U.S. agricultural trade issues.

Free-trade agreements such as the North American Free Trade Agreement have been good for U.S. agriculture overall, most commodity groups agree. Most also supported the passage of the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership with the European Union, and have expressed disappointment at the failures of those agreements to be approved.

"The reality is that U.S. agriculture has the blessing of productivity that means we grow far more food than the people in our country can consume," says David Schemm of Sharon Springs, who in March became president of the National Association of Wheat Growers. "We need overseas markets for our farms to succeed, and the countries overseas need our food to have security for their people."

STACKED UP: Containers full of goods are prepared for loading onto vessels departing a port near Shanghai, China.

Working hard at global trade promotion
Against a backdrop of trade uncertainty and political chaos on multiple fronts, farmers and the commodity organizations that support their efforts at market expansion are doing the best they can to convince more and more countries that they can benefit from buying U.S. agricultural products, even in the absence of a free-trade agreement.

A call to the office of the U.S. Grains Council, for example, found the entire team out of the country for a trade mission trip to Ireland during the first week of April. With the TTIP negotiations stalled, commodity groups are working individually with countries in the EU to try to improve the market for U.S. products. U.S. Grains Council members work to promote corn and grain sorghum and their byproducts.

FISH FOOD: Bags of soy-based fish food are stacked in a warehouse at a Chinese aquaculture farm. The U.S. Soybean Export Council was instrumental in developing the special-formula feed and educating Chinese producers about the advantages of using the feed.

The United Soybean Board works with countries around the world, including many Asian companies that would have been part of a successful TPP.

U.S. Wheat arranges trips to potential trading partners to talk about the quality and value of U.S. wheat, and the International Grains Program at Kansas State University has brought dozens of foreign millers, bakers and others to the U.S. to learn more about the benefits of U.S. grains.

Every commodity group — both grains and meat — has made trips to Mexico in recent weeks to reaffirm their commitment to maintaining Mexico's status as the top buyer for many U.S. grains and the relationship that moves livestock, food ingredients and manufacturing parts back and forth across the border.

All of the commodity groups have experienced some success in opening new markets, even without being able to offer the benefits of tariff removal inherent in free-trade agreements.

"There are a lot of non-tariff barriers that can sometimes be overcome with education about the higher quality of American grains," says Tim Lust, CEO of National Sorghum Producers. "With the uncertainty about getting new trade agreements, we are just doing the best we can to promote U.S. sorghum and sorghum products."

Lust says the NSP plans its marketing efforts two years in advance and doesn't expect to see significant change in the number of trips or amount of spending in the short term.

Like other commodity organizations and most farmers, NSP would like to see funding remain steady or increase for USDA programs such as the Market Access Program or Foreign Market Development, which help promote the sale of U.S. ag products, and for funds that Washington supplies to match farmer-paid checkoff dollars.

FAMILIAR WITH A TWIST: Purina is a name well-known in the American animal food market. But at a Chinese aquaculture operation, the label has an added line in Chinese.

Washington budget problems well-known
Realistically, however, the problems with the budget in Washington are well-known, and the appetite for cutting seems greater than the appetite for increasing spending.

As someone working in Washington regularly, Schemm says there are concerns with the process and the organization of the Trump administration.

"We have conversations where people say the right things and they tell us 'trust us,' and then the talking points raise a lot of concerns," he says. "There's a lot of concern about what the policy will really be and are we talking to the right people?"

Schemm says coming home to Kansas where commodity prices are struggling and bunkers of wheat dot the landscape into April is very disconcerting.

"We have just gotten some very blessed rains across a lot of the country where I farm," he says. "The crop is looking really good. Everything is lining up in a way that could duplicate last year, which was the best harvest we have ever had. We could have another really good year of yields. There's something wrong with that not being great news."

Hunger, the greatest destabilizer
Acknowledging the words of Norman Borlaug, a central figure in the Green Revolution, Schemm says it is essential to realize that you cannot advance the cause of world peace on empty stomachs.

"The greatest destabilizer of all societies is hunger," he says. "When people are thirsty or hungry, every part of their energy goes into finding water and food. When you have water and food, you can work on other things. It is trade that provides that freedom."

He says that moving forward, the National Association of Wheat Growers will focus on reminding U.S. officials of that fact.

"The reality is that when it comes to trade promotion, the USDA Market Access Program offers a return on investment many times over. There is no reason for people not to understand this."

The big concern for the wheat lobbying effort now, Schemm says, centers on the upcoming debate on the farm bill, which will entail keeping the nutrition title, and on pushing for trade agreements.

"We need to make it clear that the food supplement program is risk management for our urban counterparts the way that farm programs are a safety net for us," he says. "If you are an urban resident, SNAP [Supplemental Nutrition Assistance Program] is as much a safety net as crop insurance is for me. If you lose your job or I have a natural disaster, this is how we keep the lights on and food on the table. We need to support each other."

When it comes to trade overseas, he sees the stakes rising.

"What it comes down to is that societies that are well-fed are stable. Those that struggle for food are not. It is clearly in our interest to make sure people have food."

Trade is the way we accomplish this, he says. It is the way that we keep economies stable and the way that we provide a market for our farmers.






TAGS: Regulatory
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