CAFTA and industrial ag

Looking for ammunition in the fight to derail CAFTA, the Central American Free Trade Agreement that Bush is currently trying to ram through Congress, someone recently asked me how it would affect US farmers.

The answer depends on what sort of farmers we're talking about.

Commodity farmers--those who produce large amounts of corn, wheat, soybeans, and other bulk crops that fuel the global industrial food system--would likely benefit. For a commodity-corn farmer, for example, the prospect of dumping lavishly subsidized corn right into the southern heart of the tortilla belt must sound pleasant indeed.

Click on the above link, and you'll find that the U.S. government delivered $37.4 billion in direct payments to large-scale corn farmers between 1995 and 2003. To put that number in perspective, Central America's largest economy, Guatemala’s, boasts a GDP of about $56 billion.

It's no wonder, then, that American Farm Bureau president Larry Wooten, himself a tobacco and grain farmer, recently reiterated his group's "strong support" for CAFTA (also known as CAFTA-DR, because the Dominican Republic is also involved), which he declared would "overwhelmingly be a win-win opportunity for U.S. agriculture.”

He went on to analyze the pact in terms so stark that Bitter Greens Journal itself would have been proud to have authored them. He enthused:

The CAFTA-DR would put the United States in a position to underprice competitors and boost market share for almost every major commodity, while giving our producers access equal to or greater than that of our competitors.

Corn, cattle, and pork interests have also weighed in. National Corn Growers Association president Leon Corzine even hinted that CAFTA passage would temper corn growers' voracious appetite for government cash. He said: "It has always been NCGA's position that corn growers want income from the marketplace - the global market - and not from the government. To do this, we need the CAFTA-DR markets opened."

Yeah, right. I suppose NAFTA--which in 1994 opened Mexico's market to an avalanche of cheap, low-quality corn and threw untold thousands of corn farmers off the land and across the border--wasn't enough for him?

The only group of U.S. commodity farmers I know of who aren't cheering CAFTA are sugar producers. The Central American countries produce sugar, and thus CAFTA would mean easing United State's strict sugar-quota program, which went into effect in 1982 and has since survived many challenges.

While I bitterly oppose CAFTA, I have little sympathy for the sugar industry. In fact, it needs no sympathy from these quarters. The Financial Times reported on April 12 (the article is available only for a fee) that "Although sugar represents only 1 percent of US farm revenues, the industry accounted for about 17 percent of political contributions by agriculture businesses between 1990 and 2004--just over $20 million."

Those handouts have evidently won some influence in the Bush administration, that bastion of free trade. Last year, Bush capitulated to sugar interests and rammed an exemption for sugar into a free trade pact with Australia. The FT reports that the administration is busily trying to work some sort of sugar concession into CAFTA.

One possibility: to allow in a certain amount of Central American sugar but to "set it aside for conversion to ethanol--a prospect described as 'intriguing' by Chuck Conner, the president's advisor on food and trade issues." Don't get me started on the absurdity of that idea.

To sum, CAFTA, like NAFTA before it, looks like a great boon for most commodity farmers and the industrial-food interests they serve. (As for large-scale vegetable and fruit producers, I expect that CAFTA will provide them a new upsurge of cheap labor, as CAFTA wreaks havoc on local foodways and clears the land of subsistence and market farmers alike.)

And how would CAFTA affect small-scale U.S. farmers geared to their local markets, like Maverick Farms?

Not much, probably.

However, it must be noted that for small-scale farming to be sustainable, it must turn a profit. (Unlike large-scale monocrop farming, it can't rely on government handouts.)

In our current system, small-scale, local-based farming relies for its existence on a healthy pool of expendable income—which is ultimately generated by exploiting cheap labor in places like Central America. I've discussed the class paradoxes of sustainable agriculture in this post and this post.