US Farm Trade under Pressure ; Known as the World's Breadbasket, the US Now Faces Rising Food Imports and Competition in Export Markets

Article excerpt

Wander down the aisles of most American grocery stores and you'll find a surprising choice of foods from foreign countries - ripe blackberries from Mexico, capers from Morocco, hearts of palm from Costa Rica, sweet peppers from South Africa. The list goes on.

While all these foreign imports may be a boon for consumers, they're one reason the once-huge US agricultural trade surplus is rapidly deflating. It's down from $9.6 billion just last year to only a projected $1 billion in 2005, raising the possibility of a deficit in the future.

How could the world's breadbasket be staggering when it comes to a traditional strength like the American farm? The question comes at an awkward moment as overall US trade deficits hit record highs of more than $600 billion a year.

The answer is a culinary tale involving changing consumer tastes, expanding global farm output, and the subsidies governments offer a politically sensitive industry.

"We're not doing enough to combat [foreign] protectionism," says Rep. Bob Goodlatte (R) of Virginia, chairman of the House Committee on Agriculture. He says other countries are raising barriers that make it harder for American farmers to sell their products abroad.

At home, American shoppers also share the blame. People enjoy - and buy - lots of foreign foods. "Our economy is growing, incomes are rising," says Parr Rosson, director of the Center for North American Studies at Texas A&M University. "As a consequence our imports have risen ... particularly in fruits and vegetables we like to have fresh year-round."

Last year, $62.3 billion in farm exports left the US, a number forecast to drop to $59 billion in 2005. Conversely, $52.7 billion in imports arrived in 2004 and are predicted to be up to $58 billion this year.

Representative Goodlatte runs through a list of reasons.

First, there are tariffs. The "United States imposes tariffs on food coming to our country that average 12 percent. The worldwide average is 62 percent."

Second, developed countries, particularly Japan and the European Union, subsidize their farmers at far higher levels than America. "Even though our agricultural production is higher and our population is lower, we actually have a trade deficit with Europe in agriculture, in part because of all these tariffs and subsidies," he says.

While subsidies can distort commerce, many experts see trade in general as beneficial. "If we didn't import oil, what do you think we'd be paying for oil today?" asks Mr. Rosson at Texas A&M. "You need to think of imports [as] ... sending a signal to domestic industry they need to compete or become more productive. …


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