NAFTA: Putting family farmers out of business since 1994

“The husbandman shall be the first partaker of the fruits.” – St. Paul

Patti Naylor, Darvin Bentlage, John Harter and Christopher Mosel | Iowa View contributors | 9:59 am CDT August 30, 2019

Two longtime Iowa politicians, Sen. Charles Grassley and now dairy industry lobbyist Tom Vilsack, held a press conference recently touting the gains for farmers from President Trump’s newly negotiated NAFTA. We’re family farmers and we’ve heard this same line on new trade deals for decades. We’ve had enough.

We’ve read enough of the corporate ag narrative about how great “free trade” has been for American farmers and rural economies. And how we need to double down and pass the new NAFTA. The truth is, NAFTA has not been a good deal for U.S. farmers, or for farmers in Canada and Mexico. So-called free trade has created windfall profits for multinational meatpackers and grain traders. The real story can be seen out our windows, on our Main Streets and in the growing average age of the U.S. farmer because their children can’t afford to come back to the farm.

Since NAFTA’s start in 1994, “free trade” schemes have put hundreds of thousands of U.S. family farms out of business, while dramatically increasing corporate agribusiness’ profits, market control and the monopolization of our farm and food industry. These changes, coupled with the rapid expansion of publicly financed and often un-regulated corporate factory farms, have put thousands of independent livestock and dairy producers out of business.

The situation confronting independent family farmers is dire.

Since NAFTA, our country has lost two-thirds of our hog producers and one-quarter of our cattle producers. For grain producers, the situation isn’t much better — prices paid to farmers haven’t risen because of free trade agreements, and taking into account increased input costs and inflation have decreased significantly.

Family farm groups asked the Trump Administration to support U.S. ranchers and rural communities by restoring mandatory Country of Origin Labeling (COOL) for beef and pork in the new NAFTA. Instead, the U.S. Trade Representative followed the lead of corporate front-groups like the National Cattlemen’s Beef Association (NCBA), and excluded mandatory COOL from the new deal. COOL supports U.S. livestock production by letting consumers know which country the meat on the grocery store shelves comes from (i.e. where it was born, raised and slaughtered). The adoption of COOL in 2009 led to a steady price increase in beef until pressure from corporate meatpackers and industry groups resulted in its repeal by Congress in 2015.  Cow/calf profit per cow per year dropped from $438 in 2015 to less than $138 now. “Free trade” and the NCBA killed COOL, and U.S. cattle producers are getting paid a lot less.

Since NAFTA, imports of agricultural goods into the U.S. have skyrocketed. The U.S. agricultural trade balance with NAFTA partners has fallen from a $2.6 billion surplus in the year before NAFTA to a $7.8 billion deficit in 2017. In the case of agriculture, the new NAFTA is largely a status quo deal – nothing in it is expected to change these trends. And that’s why multinational agribusiness firms badly want the deal.

Corporate “free trade” allows a handful of multinational firms to capture export markets through vertical integration and control greater shares of agricultural inputs, seeds and equipment, while limiting buyers of crops, meat and poultry. Without effective antitrust enforcement in the agriculture sector, the diminished competition forces farmers to accept whatever price — and conditions — are dictated by agribusinesses.

The fact is, “free trade” is a race to the bottom for farmers in the U.S. and in our partner countries.

Following NAFTA, global grain trading corporations flooded Mexico with below cost-of-production corn, and, as a result, an estimated 2 million Mexican farmers were put out of business, many were forced to move across the border for work. When we talk about immigration, we cannot ignore NAFTA and its consequences.

The new NAFTA in no way alleviates monopolistic corporate control of agricultural markets and actually takes a step back in other areas, reading like a de-regulatory wish list for global agribusiness firms who operate in all three countries. It’s no surprise that Vilsack wants this new NAFTA. He now represents the interests of large dairy processors with deep investments in expanding exports. The new deal further undercuts Canada’s successful dairy supply management program – exactly the type of program that could help our own struggling family dairy farms.

It would create new obstacles to enact sensible rules on food safety, agricultural biotechnology, food labeling and pesticides. Taken together, these new rules create barriers to basic protections for farmers and workers, the land, our water and our health.

As family farmers, we urge Congress to reject the new NAFTA and renegotiate trade rules to focus on the interests of family farmers, ranchers, farm and food workers, consumers and our environment in all three nations. Instead of creating trade agreements that line the pockets of multinational food profiteers.

Patti Naylor is an Iowa grain farmer. Darvin Bentlage is a Missouri cattle and grain farmer. John Harter is a South Dakota livestock and grain farmer. Christopher Mosel is a Minnesota livestock and diversified crop farmer.