Because the price of corn, soybeans and other crops is so expensive to produce, U.S. farmers sell fewer crops than last yearwhich meant lower pricesand this has not translated into more farm sales. That means that even if the food-and-beverage import bill was passed, it wouldn’t raise overall U.S. agriculture exports. Even then, the trade impact might be modest. According to USDA numbers, food imports for 2012 totaled just $13.8 billion, or less than 3 percent of U.S. gross domestic product. In other words, the legislation would not have raised much new agricultural revenue and, by any measure, that’s not going to help farmersthe point of the bill.
The second possibility is that the tariffs are unlikely to make much of an economic difference, even if some of the corn-industry lobbying appears to be motivated by pure fear. If that proves the caseand if there are other reasons for the corn farmers to be alarmedit could complicate the case for the legislation. The industry has argued that tariffs would hurt American farmersfor instance, unfairly encourage Canadian potatoes to be exported to the U.S., thus increasing competition. (Canada has an identical levy designed to help ensure cheap U.S. products are offered to Canadian consumers.) That argument, too, has many critics.
Farmers say they are already selling far less corn and soybeans than they did just a few years ago. The corn-trade dispute may even drive up the prices, boosting the price of American farming to a point beyond where it is affordable.
The final question, of course, is what is the economic impact and, if it is large enough to cause the passage of the legislation, how likely is it to be realized? There would be real benefit in the first place for U.S. producersas many as 2550 percent, according to a report by the National Corn Growers Association. But agriculture lobbyists know that that kind of increase would be difficult to reverse. Even as it tries to push a high-cost grain into an expensive market, Mexico’s government faces stiff price competition from U.S. corn farmers. The agricultural minister there said he was likely to “dont want to do anything” that would hurt U.S. corn farmers. Indeed, the industry has made it clear that it could not move forward unilaterally by levying tariffs without U.S. support.
What of the farmer-turned-Washington-insider who wants to take American farmers into his home nation so he can sell him cheaper corn? He’d probably run afoul of the same “food sovereignty” laws that have blocked similar exports in the past. One federal judge held the Cornhusker Kickback case in the 1970s, concluding that a ban on trade in non-essential products from some countries was a violation of the U.S. Constitution and that Congress had a legitimate regulatory role in limiting food imports. A similar question recently got a response in the Canadian case. While the U.S. case ended badly for Canadian exporters, there are no reports of American farmers being denied access to the market.
Of course, an import ban on basic food imports does not come out of thin air. It would require congressional action, a level-headed view that imports shouldn’t be a “free ride,” and the kind of transparency that has been lacking with the entire trade negotiation. Even then, if an import quota could be created, the process would require strong pushback from the dairy and beef lobbies, which could make such a move unpalatable. And then there is the fact that American farmers would lose a lot of export market shareespecially food-related products like corn and soybeans. That hasn’t stopped the U.S. agricultural lobby from calling for the ban, and doing so, to increase “food sovereignty.” Of course, in its effort to boost trade, the U.S. agricultural lobby has a tendency to find ways to reduce its cost of productionespecially in the export market. ___
Farmers were given 30 days to file their written responses to the National Research Council report, but only three submitted them.