The event at which Ms. O'Connor spoke took place on Thursday, May 25. Two days earlier on Tuesday, May 23, the House Committee on Ways and Means held a hearing centered on trade and the Committee's proposal for an overhaul of the U.S. tax system. Key to that proposal are lower rates, a move toward a territorial system, and a border adjustable tax. Almost certainly, we will return to that hearing later with a focus specifically on the proposal for a border adjustable tax. Here we simply want to share some comments made about American agriculture.
One of the witnesses was
Juan Luciano, the Chairman, President, and CEO of Archer Daniels Midland Company. Your editor's essential (that is to say emotional) understanding of American agriculture was formed in the 1960s, 70s, and 80s, which, among other things, included headline sales of enormous quantities of grain to the Soviet Union. So for us, listening to Mr. Luciano was a rude, Rip van Winkle awakening. Here is some of what he said.
JUAN LUCIANO
"The U.S. share of global exports has fallen precipitously in major commodities over the past five decades....
"We have lost market share. We used to be the breadbasket of the world. We have lost in wheat to Russia. We have lost it in soybeans to Brazil. We are hanging on to corn but not for long. What happened in this period is that acreage in the United States has been reduced 12 percent over the last 20 years, while in Russia production in corn has improved 61 percent. The planted area of soybeans has increased by three times."
America's advantages in terms of such things as weather and the fertility of the soil are not unique, Mr. Luciano said. What he asked the Members of the Ways and Means Committee to focus on was this: the countries that have those kinds of advantages have put in place "policies [including border adjustable taxes] that actually are helping [their] farmers to take market share from the U.S."
And it gets worse. As Ms. O'Connor pointed out, "Since 2010, Mexico has lifted tariffs [on wheat imports] from non-NAFTA countries, with the result that an increasing proportion of Mexico's wheat imports are from outside North America."
Against that background - and the fear that things could get even worse if the NAFTA renegotiation turns sour - Ms. O'Connor ended her presentation with a plea: "From [North American Wheat Growers] standpoint, our biggest priority is,
'Do no harm.'"
|