The 2007 Farm Bill DebateThe 2007 Farm Bill Debate::Converging Domestic and International Converging Domestic and International

Policy ImperativesPolicy Imperatives

May 24, 2005Hyatt Regency Washington on Capitol Hill

Washington, DC

Specialty Crop Federal Policy/ Specialty Crop Federal Policy/ U.S. Farm PolicyU.S. Farm Policy

Presented by

Bob Schrammon behalf of

Matt McInerney,

Senior Vice President,

U.S. Farm PolicyU.S. Farm Policy

– Specialty Crops

– Represents 50%50% of Plant Agriculture

U.S. Farm PolicyU.S. Farm PolicyComparison of Economic Values

Specialty Crops and Program Crops - 2003

Category Specialty Crops

Program Crops

Farmgate Value $52.3 $53.9

Annual Subsidies $0.0 $12.4

Farmgate Export Value $16.0 $29.5

Value of Imports $26.3 $5.2

FTA Benefits No YesSource: Economic Research Service and U.S. Foreign Agricultural Service, USDA

Specialty Crop Competitiveness Specialty Crop Competitiveness IssuesIssues

– Labor

– Increased Regulations– Homeland Security

– Environmental Requirements

Specialty Crop Competitiveness Specialty Crop Competitiveness IssuesIssues

– Poor Export Growth [FTAs]

– Invasive Species [Globalization]– $123 billion cost per year (Cornell University)

– Congressional Focus on Program Crops

– Lack of Research Dollars

– Agriculture Plant Health Inspection Service (APHIS)

Specialty Crop SolutionsSpecialty Crop Solutions

– Enactment of H.R. 3242 (Specialty Crop Competitiveness Act)– Full Implementation and Funding

– Specialty Crop Amendments Act of 2005– Provide policy/resources to meet specialty crop

grower needs

– Specialty Crop Title of 2007 Farm Bill

Specialty Crop SolutionsSpecialty Crop SolutionsDoha RoundDoha Round

– Stricter Adherence to Trade Promotion Authority– reduce tariffs to levels that are the same as, or lower

than, those in the U.S.

– Relief from Foreign Subsidy Impacts in U.S. and Foreign markets– reduce or eliminate subsidies that decrease market

opportunities for U.S. exports or unfairly distort agriculture markets to the detriment of the U.S.

To Understand Future Specialty To Understand Future Specialty Crop Federal Objectives We Crop Federal Objectives We

Must Know Federal Must Know Federal ShortcomingsShortcomings

Uruguay RoundUruguay Round&&

Free Trade AgreementsFree Trade AgreementsPromises and Effects

Uruguay RoundUruguay RoundPromisesPromises

“I don’t have to explain to this Committee how important exports are to the income of our farmersexports are to the income of our farmers and to the U.S. economy as a whole.… We believe these provisions [SPS rules] will discourage countries from using unjustified health-related measures as disguised barriers…”

Secretary Mike Espy, Secretary Mike Espy, U.S. Department of AgricultureU.S. Department of Agriculture

Uruguay RoundUruguay RoundPromisesPromises

“..we will be able to… open up the European market tremendously in the areas of specialty crops.”

Ambassador Mickey Kantor, Ambassador Mickey Kantor, U.S. Trade U.S. Trade Representative December Representative December 10, 199310, 1993

Uruguay Round EffectsUruguay Round EffectsU.S. Trade in Fruits, Vegetables and NutsU.S. Trade in Fruits, Vegetables and Nuts

Year Imports Exports Balance

1995 $4,546,941,000 $5,155,383,000 $608,442,000

1997 $5,277,013,000 $5,362,865,000 $85,852,000

1999 $6,528,175,000 $4,916,736,000 ($1,611,439,000)

2001 $6,850,065,000 $5,330,162,000 ($1,519,903,000)

2003 $8,184,958,000 $6,048,928,000 ($2,136,030,000)

2004 $9,220,653,000 $6,639,319,000 ($2,581,334,000)

Note: Trade data above denotes chapters 7 and 8 of the Harmonized Tariff Schedule.

Prepared by Schramm, Williams & Associates, Inc. using data from the U.S. Department of Commerce

Uruguay Round EffectsUruguay Round EffectsU.S. Trade in Fruits, Vegetables and NutsU.S. Trade in Fruits, Vegetables and Nuts

(Excluding Almonds)(Excluding Almonds)

Year Imports Exports Balance

1995 $4,546,941,000 $5,105,074,000 $558,133,000

2004 $9,220,653,000 $5,342,464,000 ($3,878,189,000)

203% Increase 4.4 % Increase

Note: Trade data above denotes chapters 7 and 8 of the Harmonized Tariff Schedule.

Prepared by Schramm, Williams & Associates, Inc. using data from the U.S. Department of Commerce

FTA Fruit, Vegetable and Nut Trade FTA Fruit, Vegetable and Nut Trade Statistics - 2004Statistics - 2004

Lack of Export Market OpportunitiesLack of Export Market Opportunities

Note: FTA trade data above denotes chapters 7 and 8 of the Harmonized Tariff Schedule.

Prepared by Schramm, Williams & Associates, Inc. using data from the U.S. Department of Commerce

Imports Exports Balance

$3,051,726 $272,715 ($2,779,011)

Ratio of Ratio of $1 Imports : 9¢ Exports$1 Imports : 9¢ Exports

ConclusionConclusion

FY 2007FY 2007Convergence of Convergence of

Farm Bill & Doha RoundFarm Bill & Doha Round

The 2007 Farm Bill DebateThe 2007 Farm Bill Debate::Converging Domestic and International Converging Domestic and International

Policy ImperativesPolicy Imperatives

May 24, 2005Hyatt Regency Washington on Capitol Hill

Washington, DC