NCGA,
Other Farm Groups Urge Quick Passage of CAFTA-DR Agreement (2-7-05)
The National Corn Growers
Association (NCGA) last week signed on to a letter along with 50
other farm and commodity organizations encouraging quick passage
of the Central American Free Trade (CAFTA) and Dominican Republic
(DR) Agreement The letter was sent to members of Congress.
The new markets created
by this agreement will expand U.S. agricultural exports and put
American farmers on an equal footing with their competitors in these
markets.
The CAFTA-DR is especially important for NCGA, as the nation’s
corn growers rely on trade for market access and sales, said Hayden
Milberg, NCGA director of public policy.
“Nearly 20 percent of the U.S. corn crop is exported,”
he said. “For us, it is absolutely important that we continue
to find new markets and opportunities overseas with Europe and with
the developing world.“
Milberg said the CAFTA-DR deal, which is awaiting approval by Congress,
would provide a significant boost to the farm economy. “According
to the U.S. Farm Bureau, there are nearly $600 million dollars worth
of benefits for U.S. agriculture in this agreement,” he said.
A Farm Bureau study also
states a surplus of CAFTA-related gains of $872 million and $468
million in the Dominican Republic. Bulk corn imports from the United
States to CAFTA countries between 1999-2001 averaged $137.4 million
annually. By 2024, exports to those countries are expected to be
$357.6 million annually with the CAFTA-DR agreement and $302.3 million
without. Accordingly, the net gain from the agreement for corn exports
will be $55.3 million in that year alone. The U.S. share of the
CAFTA market for corn is expected to increase from 80 percent to
87.5 percent by 2024 with the agreement, and market share without
CAFTA is estimated to remain static at 80 percent.
The agreement levels the playing field with other CAFTA countries,
Milberg said. “The need for this agreement is obvious,”
he said. “In order for U.S. producers to have a successful
future, we need to make sure we have the best advantage in the marketplace.”
According to the letter,
more than half of U.S. agricultural products will become eligible
for duty-free treatment in these countries immediately upon implementation
of the agreements, with most remaining duties on U.S. products phased
out over 15 years.
Some examples of U.S.
exports to the Central American region that can be expected to gain
significantly from CAFTA include corn and other feed grains (valued
in 2003 at $190 million), wheat ($146 million), rice ($76 million),
soybeans and meal ($125 million), poultry ($59 million), dairy products
($27 million), pork ($18 million), apples ($7 million), and beef
($7 million).
Some key export commodities
to the Dominican Republic include corn and other feed grains ($112
million), soybean meal and oil ($81 million), wheat ($40 million),
dairy products ($9 million), dried beans and peas ($4 million),
and poultry products ($7 million). Processed food exports could
also be expected to increase from $359 million to $662 million upon
elimination of tariffs.
“Implementation
of the CAFTA-DR would also provide an ongoing system for bilateral
dispute settlement and would eliminate the use of export subsidies
on agricultural trade within the region,” the coalition letter
says. ”These important achievements would be lost without
passage of the agreement.”
Milberg said it's vital
that members of Congress learn about the importance of CAFTA-DR
from a variety of sources. “I would encourage every corn grower
and agriculture producer to contact their members of Congress and
urge them to support this agreement. The future of agriculture not
only depends on domestic but also on the international markets,”
Milberg said, adding the agreement is expected to make it to the
House and Senate floors sometime before Memorial Day.
To view the
coalition letter in its entirety, click here.