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CAFTA: A Boon Or Bomb For Farmers?
April 23, 2005
by Joy Powell, Star Tribune

A new trade agreement before Congress will double exports for many U.S. farmers and won't hurt sugarbeet farmers as some fear, U.S. Agriculture Secretary Mike Johanns said Friday in Minneapolis.

Sugarbeet farmers and others disagreed.

Once the Central American Free Trade Agreement is passed, Johanns said, commodities including soybeans, corn, dairy, wheat and barley will continue to be exported to the six member countries, but with slashed or eliminated tariffs.

"Nearly every part of the U.S. farm sector will see benefits," Johanns said, adding that more than 50 U.S. agricultural industry and trade groups support the agreement.

The CAFTA agreement would allow 107,000 tons of imported sugar, compared with the millions of tons used in the United States each year. That volume amounts to about 1.2 percent, or one day's worth of U.S. production out of the year, he said.

"Nobody's going to lose their job in the sugar industry because of CAFTA," Johanns said. "No sugar producer is going to be harmed. They were very successfully protected in the CAFTA negotiations."

The agreement would open doors for more U.S. farm sales to Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua, Johanns said. Those countries bought $1.8 billion worth of U.S. farm and food products in 2004, he added.

Critics include the Midwest Fair Trade Coalition, which points to Minnesota' ranking as the top U.S. sugarbeet grower. The beet industry it shares with North Dakota represents $3 billion a year and more than 30,000 jobs.

"Our jobs and our local economies are facing the greatest threat we've faced in a long time," said Nick Sinner, a coalition member and executive director of the Red River Valley Sugarbeet Growers Association. He estimates $180 million in lost income for farms and rural economies under the agreement.

"If CAFTA passes, 21 other sugar-producing countries are lined up to negotiate similar deals," Sinner said.

He said other trade agreements haven't protected his industry. "Under NAFTA," Sinner said, "Mexico's duty-free access to the U.S. sugar market will increase by 276,000 tons in 2008."

Rep. Collin Peterson, D-Minn., said estimates forecasting trade gains for U.S. farmers under CAFTA are "delusional."

Thursday, Peterson told the House Ways and Means Committee that the International Trade Commission's report on CAFTA predicts no gains for U.S. wheat and only minimal gains for rice, corn and beef.

The trade commission predicts a 4.67 percent drop in U.S. market prices for sugar, Peterson testified, while the American Farm Bureau predicts losses of $80 million for the sugar industry.

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