(Posted Thu. Feb 9th, 2012)
Feb. 9: Trade is critically important to U.S. corn growers’ balance sheets – just look at what happens to corn prices when export demand wanes – but trade issues never seem to take center stage the way ethanol or farm programs do.
As a result, NCGA’s sustained efforts in the trade arena are too often overlooked. But they are still essential.
Walter Goeppinger, NCGA’s founder, recognized the importance of trade. Within three years of establishing NCGA, he played a leading role in creating the U.S. Feed Grains Council (now the U.S. Grains Council) as a tool to develop export markets for U.S. corn.
Goeppinger, who presided over NCGA from 1957 to 1973, also served as the USFGC’s first chairman in 1961.
Nearly 40 years later, Nebraska grower Bob Dickey, like Goeppinger, served in both roles -- USGC chairman in 1998 and NCGA president in 2009.
Dickey, whose mantra at the Grains Council was “exports move my markets,” made better coordination between NCGA and the USGC a primary goal of his presidency, helped by the closer ties that developed after 2000, when Rick Tolman left a senior post at USGC to become NCGA’s chief executive officer.
“We put together the Corn Vision 2012 to sit in on conference calls, sit in on each other’s meetings, and have joint meetings,” says Dickey. “Now we’re housed together in Washington, DC. We’ve jointly rented space not far from the Capitol, and we have a common receptionist and use the office equipment together. We will share board rooms, and I think it will be a big success.”
Close working relations between the two organizations are critically important to corn farmers because of the way their strengths dovetail.
The Council is pre-eminently a market development operation with overseas offices and representatives. Operating globally, it not only builds demand, it also provides market information and education and works with end users to remove trade barriers in importing nations.
It does not, however, lobby the U.S. Congress on U.S. trade policy because it receives matching funds from the U.S. Department of Agriculture, and it is not structured to mobilize widespread grower involvement in trade issues the way NCGA can.
One of the essential but undramatic contributions NCGA makes to trade effort is making sure, year after year, that Congress appropriates funding for USDA’s market development programs – not an easy task since the Market Access Program (MAP) is frequently targeted for budget cuts.
As part of the 2008 farm bill, the NCGA helped achieve $200 million for the Market Access Program (MAP) and $34.5 million for the Foreign Market Development (FMD) Program.
What gains far more attention is NCGA’s role as the official representative for U.S. corn growers, providing testimony, lobbying Congress and the administration, even taking legal action to defend U.S. exports in trade disputes, some of which extend over many years.
There are many examples, from NCGA’s passionate protest against the Carter administration’s 1980 embargo on grain sales to the Soviet Union to mounting a legal defense against a Canadian challenge of U.S. commodity programs.
In the mid-1980s, when Spain and Portugal joined the European Union, NCGA contributed to an all-out negotiation effort that assured access to the Iberian market for up to two million tons (79 million bushels) of corn imports annually, until 1998 when a new dispute over biotechnology halted U.S. export sales.
As the U.S. corn economy and the trade environment have evolved, the NCGA’s task has grown to encompass previously unimagined issues. NCGA has worked to halt the dumping of subsidized imported sugar into the U.S. domestic market and to prevent the misuse of U.S. ethanol incentives to benefit foreign producers.
Through the evolution of the General Agreement on Tariffs and Trade (GATT) into the World Trade Organization (WTO), NCGA has pushed U.S. negotiators to develop trade rules that create a fair and level playing field for exports of U.S. corn and corn products.
Much of this work has been tedious and slow, and successes are rarely dramatic. Two examples illustrate, however, how important NCGA’s work on trade is.
First, the passage of NAFTA has been an unparalleled victory for U.S. corn farmers. From a modest and unpredictable market that averaged just 76 million bushels of purchases, Mexico is now consistently the No. 2 U.S. export customer, with 325 million bushels in imports in 2009/10.
The second example is Colombia, where USGC market development programs turned a negligible market (less than 1.3 million bushels in 1990/91) into a major customer for U.S. corn. By 2006/07, Colombia was buying 125 million bushels.
Then, while approval of a U.S.-Colombia Free Trade Agreement was delayed again and again, Colombia’s trade pact with other corn exporters like Argentina and Brazil began to ratchet down Colombia’s tariffs on their corn shipments.
Over several years, the U.S. price advantage eroded, and so did U.S. sales to Colombia. From marketing year 2007/08 through 2009/10, U.S. corn exports drastically dropped 78 million bushels, which is an estimated loss of $475 million.
“NCGA worked really hard on them [the Colombia, Panama, and South Korea free trade agreements],” says Bart Schott, the North Dakota grower who was NCGA president in 2010/11.
“I was really hoping to add approval of the free trade agreements to what we achieved when I was president. I talked to Ambassador Kirk in December 2010, and he thought we’d get it done in January or February,” Schott remembers. It’s one of those things that is going to help us and help the livestock industry even more.”
Under pressure from NCGA and an array of U.S. commodity groups, Congress finally passed the Colombia FTA in October 2011, a bare two weeks after Schott stepped down as NCGA president.
Beyond its contribution as corn growers’ official representative, NCGA plays a growing role as “the face of the American corn grower” around the world. In the last decade, NCGA and USGC have worked more closely than ever to answer trade concerns and educate foreign consumers about questions from the most basic -- how is corn grown? -- to the most critical – is the corn safe to eat? Will there be enough to feed our consumers?
Whether welcoming international groups to their farms or traveling abroad to answer speak for the industry, NCGA leaders are in the forefront of providing the answers.