Source: US HOUSE AG COMMITTEE, 6/11/19

House Agriculture Committee Subcommittee on Livestock and Foreign Agriculture Chairman Jim Costa delivered the following remarks at the subcommittee hearing on the state of U.S. agricultural products in foreign markets.
[As prepared for delivery]

“Thank you and welcome. We’re here to get some answers about what is really our US agricultural trade policy and its impacts on the lives and livelihoods of farmers, ranchers, and the countless others who rely on American agriculture. Trade is especially crucial for my home state of California where we export over 40 percent of our total agricultural product, which equaled over 20 billion dollars in 2017. 

“With us is Ambassador Gregg Doud of the Office of the U.S. Trade Representative, and USDA’s Under Secretary for Trade and Foreign Agricultural Affairs Ted McKinney. These two are the two most directly involved in the Administration’s discussions on agricultural trade policy, and I am glad to have them join us. Given the ups and downs of the trade discussion in recent months, we’re all interested in where we are and where we’re going.

“Farm bankruptcies are at their highest in a decade. After record highs in 2013, farm income is forecast to fall below $70 billion for the third straight year. Crop prices have cratered from their record highs within the last decade to generational lows. Dairy and livestock farmers are struggling. California wine exports to Europe are down 15 percent, and down 25 percent to China, and the targeting of California-grown fruits and nuts is projected to cost our growers $2.64 billion a year. 

“According to the USDA’s Economic Research Service, imports of agricultural goods increased by 6 percent between 2017 and 2018 while exports only grew one percent. As you can see on the screen, these factors have led the US to the smallest agricultural trade surplus in over a decade. 

“And then there’s the weather: flooding continues to ravage prime corn and soybean regions in the Midwest; hurricanes battered cotton, rice and specialty crop producers in the South; drought has had a particular impact on the livestock and row-crop guys in the southern Great Plains and throughout eastern California; and wildfires took a disproportionate toll on both timber and winegrape growers across California. 

“This Administration’s trade policies have made tough times for American farmers and ranchers worse. I am glad that the President has abandoned his ill-conceived plan to put a new tariff on Mexico. I, however, remain concerned that this whole exercise has slowed down the positive momentum that existed after the Administration finally agreed to lift the 232 tariffs on Mexico and Canada only a few weeks ago. I hope there won’t be any more surprise policy changes from the Administration if we want to continue productive conversations on the U.S.-Canada-Mexico-Agreement. In my opinion, USMCA, under the current environment, that the President is largely responsible for, will be difficult to pass this year at best.  

“I am also extremely concerned by the lack of resolution to the situation with China and am eager to see our farmers and ranchers on level playing field with Japan since our competitors are already enjoying preferential access. In my opinion, I still believe the Trans-Pacific Partnership was a better strategy to deal with China’s unfair trade practices which we have known about for years. 

“The Administration has acknowledged the damage its policies are causing for farmers, issuing up to $28 billion in two taxpayer-funded bailouts to some of those affected. As we can see from last round of payments and purchases, these subsidies aren’t going to make up the difference for what people have lost. However, the Administration has yet to show any signs of changing course. 

“I am very worried that this policy signals that the Administration is more focused on softening the blow for farmers and is using agriculture to achieve undefined wins in other areas. 

“I have a lot of respect for both of you. You’re knowledgeable and you’ve been around for a while. I know Secretary Perdue and Ambassador Lighthizer are also doing everything possible to resolve these issues. I know we share the goal of seeing American agriculture succeed. You both lived through agriculture in the 80s. You’ve seen firsthand a foreclosure crisis followed by a grain embargo. You know how destructive a trade war is on the farm, especially when compounded by additional market stresses.

Whether on the farm or in the boardroom, you know there needs to be a plan in place. Farmers don’t operate without one, and it’s reasonable to expect the same from the White House. 

“So, I want to hear the plan for getting U.S. agricultural trade back on track today. I don’t want shrugs or buck-passing to other countries or the last administration. The time for that has passed. We are over a year into this trade war. The fallout on agriculture of these trade policies are this Administration’s to own.

“The President promised three and a half million American farmers and ranchers markets that get them more than what they had before, not more subsidies from the Federal government. 

“How are you accomplishing that, gentlemen? I look forward to hearing that answer today.”