As NAFTA Re-Negotiation Stalls, Family Farmers Lose Hope

Despite Trump’s promises to make trade work better for American agriculture, the ongoing free-trade negotiations don’t seem to be bringing good news for family farmers.


From his family ranch in Grass Range, Montana, Gilles Stockton has been tracking the agricultural sector’s 23-year dance with free trade. And he’s not convinced that it has benefited farmers. “It’s uncritical thinking [to say] that we have to have a free trade agreement in order to trade,” he said.

The rancher, a member of the Western Organization of Resource Councils (WORC) and other family farm groups, has been an outspoken critic of the idea that modern agriculture is united around free trade agreements. Since the North American Free Trade Agreement (NAFTA) was implemented in 1994, he said, beef producers have often gotten the worst end of the deal.

This opinion stands in stark contrast to the view of organizations like the U.S. Farm Bureau, whose president, Zippy Duvall, recently described the agreement as “a huge success story for North American agriculture” that he wants to see continue.

The first four rounds of negotiations over “NAFTA 2.0” have now concluded, raising more questions than answers, and highlighting the continuing divide in U.S. agriculture between the largest growers and smaller-scale operations. Among the most contentious proposals that would affect U.S. farmers of all sizes are grain and livestock tariffs, controversies over Canadian dairy imports, and increasing imports of produce from Mexico.

One big, open question is what the Trump Administration actually wants. Is the goal to fix NAFTA’s problems and continue the agreement? Or is the administration making demands designed to terminate the decades-old free trade zone?

Speaking at the closing press conference of the fourth round of negotiations, which concluded last week, U.S. Trade Representative Robert Lighthizer said, “As difficult as this has been, we have seen no indication that our partners are willing to make any changes that will result in a rebalancing and a reduction in these huge trade deficits.” He also noted the significant gap between the countries’ proposals, and an apparent difficulty in bridging it. “Everybody has to give up a little bit of candy,” he said.

Stark Divide Between Big and Small, Import and Export

The Farm Bureau, along with agricultural commodity organizations like the National Cattlemen’s Beef Association (NCBA) and National Corn Growers Association (NCGA), have long supported free trade agreements as a model for an export-oriented agricultural system. Their leaders, often large in size and aligned with corporate meatpackers and grain processors, have often spoken in favor of the existing NAFTA framework. “We urge you to recognize that the terms of the agreement affecting cattle producers are strongly supported as they currently exist and should not be altered,” the NCBA wrote in comments to national leaders earlier in the year.

Those groups have found a friendly voice in the new Secretary of Agriculture, Sonny Perdue, who has re-organized the USDA, creating a new undersecretary for trade and foreign agricultural affairs, to “be an unapologetic advocate for American products. My message for farmers is simple: ‘You grow it and we’ll sell it.’”

But it’s not that simple, says Stockton and several of the farmers with whom Civil Eats spoke. Despite the President’s big promises to make trade work better for American agriculture, the administration’s effort to re-negotiate NAFTA doesn’t appear to be looking out for family farmers.

From Stockton’s perspective, it helps to look at what has happened to beef producers since NAFTA was put in place. First, he says, there was documented illegal dumping of live cattle from Canada into the U.S. market in 1998. Second, there was a consolidation of market power by meatpackers such as Smithfield and Tyson. Third, there was the negative impact on U.S. producers from imported Canadian cattle that tested positive for “mad cow” disease in 2006. And finally, there was a 2015 World Trade Organization ruling in favor of Canada and Mexico that disallowed U.S. country-of-origin labeling for meat products in domestic grocery stores, opening up the U.S. market to a flood of imported meat.

“Beef producers have suffered just about every kind of negative consequence you can from the free trade era,” said Stockton. And yet, he isn’t optimistic about the Trump Administration’s recent decision to open NAFTA renegotiations. “There’s nothing I can see about reform, for the beef and cattle sector, that will make a legitimate improvement,” he said.

The Trump Administration, after months of not releasing its agricultural priorities, last week demanded “an end to the supply management system for dairy, chicken, eggs, and turkey within the next decade” from Canada. It also called for “providing extra protection for so-called seasonal fruits and vegetables, a move that target[s] Mexico’s lucrative U.S. winter market directly.”

Roger Johnson, president of National Farmers Union (NFU), told Civil Eats that the failure of free trade to deliver for family farmers is a common sentiment throughout rural America at the moment. The NAFTA re-negotiation is “the right idea and the right policy. But the President’s tactics and his approach, they just don’t seem like they match up to move in a positive direction,” he added.

In an NFU press release this summer, Johnson was more pointed, calling the re-negotiation a “missed opportunity.” He also noted a connection between free trade agreements such as NAFTA “to corporate consolidation in agribusiness, threatening the economic stability of family farmers and ranchers.”

Johnson points to data from the USDA that documents an increase in live cattle imports from Mexico and Canada, and NFU data that tracks trade balances among NAFTA members. “Since NAFTA, we’ve seen a huge growth in the trade deficit in agriculture for U.S. farmers. In 2015 alone, the U.S. had an agricultural trade deficit of $839 million with Canada and $3.3 billion with Mexico,” Johnson said.

“The groups out there in agriculture that support free trade agreements like NAFTA—I find it so ironic that they don’t want to talk about imports. They only want to talk about exports,” said Johnson. “We are net importers of live cattle from both Mexico and Canada. That beef deficit means that there’s cowboys out there raising and selling calves, and they’re getting beaten down by the meatpackers and trade policy that doesn’t look out for them.”

In 2016, the U. S. exported 703,008 live cattle to Mexico and Canada, while importing 1,210,854 animals, according to data from the USDA’s Economic Research Service.

Dairy Producers Also Feel the Strain

The same phenomenon is occurring in the dairy industry. Brenda Cochran, a dairy farmer from Tioga County, Pennsylvania, shares that skepticism about the possible benefits of the NAFTA re-negotiation. “I can’t believe it’s going to be a real solution for me, or any family farm dairy producer. And that’s a disappointment to me,” Cochran said. She  noted that she did vote for President Trump, but only grudgingly.

Some in the dairy industry have attacked the Canadian system of price supports—which offers Canadian dairy producers a minimum price for milk products—as trade-distorting. “This concept of indicting the Canadian dairy system is just bogus,” said Cochran. “The problem with the free-trade approach is it takes away local people’s rights to have the kind of farm and food system they want. Local people should be making these decisions. Not the speculators, the globalists, the CEOs, and the lobbyists,” she added.

Cochran sees the approach to export-oriented agriculture policy, such as the USDA’s elevation of international trade as the key to effective farm policy, as a kind of bipartisan neglect. “It comes at us from Senator [Charles] Schumer, Speaker [Paul] Ryan, President Trump, Representative [Tammy] Baldwin.” But independent family farmers don’t generally have a place at the table. Cochran says this lack of representation makes her feel “disenfranchised.”

Cochran believes that policies should assure farmers a fair price for the products they produce, and believes that governments should be able to help manage overproduction of farm commodities as they have in the past. “Ultimately, we need dairy policy, and food policy, that promotes actions for the public good. That policy would acknowledge the relationship between a prosperous stable rural producer class and doing what works,” she said.

Gilles Stockton also says that it’s the agribusiness corporations, such as Cargill and JBS, that drive the free trade farm agenda. He doesn’t blame Canadian cattle producers. “I’m not opposed to the concept of trade. Competition is a good thing,” he said. “Some of us can remember in the 1960s and 1970s when the American automobile industry was cranking out excellent muscle cars, but the rest of their cars were junk. Japanese car imports changed all of that. It was painful, but the U. S. auto industry got better because of the competition.”

“From the beginning, we’ve opposed NAFTA,” said NFU’s Johnson. “There’s a lot of places that President Trump is right in criticizing free trade and its impact on U.S. farmers and working families. But the way the President has conducted himself throughout the process, it’s just not a helpful way of negotiating.”

Last week, the U.S., Canada, and Mexico announced that negotiations will continue between the three nations into 2018, leading observers to fear that looming political milestones—the Mexican presidential election, the U.S. midterm elections, and the expiration of the president’s Trade Promotion Authority—will ultimately lead to the agreement’s demise.

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  1. Curtis Martin
    Monday, January 22nd, 2018
    Absolutely agree with the substantive reasoning brought forward in this article. I am attempting to draft "Letter to the Editor" of the Capital Press which just had front page article heralding the success of NAFTA. Very biased reporting, as it gave no counter opinion to the desperately needed reforms to make NAFTA a fair/balanced trade, so that we as American Farmers and Ranchers quit getting the shaft!

    Sincerely,
    Curtis W Martin