THE WTO AND FAMILY FARMS: AN INTERVIEW WITH MARK RITCHIE
On Monday, December 13, following the World Trade Organization talks in Seattle, the Kansas Rural Center arranged for farm broadcaster, Kelly Lenz, Topeka, to interview Mark Ritchie, member of the U.S. trade delegation and president of the Institute for Agriculture and Trade Policy. The interplay between Lenz and Ritchie provided listeners with a perspective on world trade and its impact on family agriculture that is not often heard in conventional media outlets. The Kansas Rural Center wishes to thank Kelly Lenz and Farm Radio 580 WIBW-AM for permission to print a portion of that interview. Transcribed by Jim French.
Kelly Lenz: Mark, tell me a little bit about you and the Institute for Agriculture and Trade Policy.
Mark Ritchie: The institute is an independent research center looking at the links between global agriculture policy and domestic ag policy. I serve on the President's Trade and Environment Policy Advisory Committee, so I was in Seattle as a member of the U.S. government delegation. I was there representing family farm agriculture. And let me say, a whole broad section of family farm agriculture is not happy with global trade policy, and especially not happy with the direction that WTO seems to be proposing to take that policy in the near future. Let me give you an example. They, the WTO head negotiators, were proposing through negotiations to further lower domestic prices for commodities in the United States, the concept being that lowered domestic prices would allow for freer world trade. But we've seen the results of that in our market here. The second thing was they took off the table any negotiations on currency. That means that if Mexico and Canada continue to devalue their currency, they will continue to flood the U.S. market with beef, wheat, and other products as well. So there are lots of farm organizations from all over the country not happy with current U.S. trade policy, and not happy with where the WTO was headed when they assembled in Seattle.
Lenz: Mark, the Canadian dollar is probably priced at around sixty-five to sixty-eight cents against the American dollar. The Australian dollar is somewhere in that general ballpark as well, historically lower than it has been. How do you deal with that when it comes to trade?
Ritchie: Well, the European community has established a very good model for that, although the WTO has made them dismantle it. Essentially, import tariffs on products like, lets say, wheat from Canada or from Australia. The tariffs moved up and down depending on the relative value of currency. So if a country like Mexico or Canada devalued their currency, there were countervailing tariffs that simply compensated for these devaluations- - a very simple technique that worked perfect for Europe for about twenty-five years. I think it would be fairly easy to do. But keep in mind the large corporations who want to import products into the United States: the meat packing companies, the milling companies, all the people that are bringing in all the wheat, the durum, and other products are very happy to have these devalued currencies because they can get cheaper raw materials from overseas. So they're going to fight to keep currency devaluation out of the WTO. And a lot of farm groups, who of course are the ones being hammered by these imports by Continental and Cargill and others, are the ones fighting to put currency on the agenda. So, at the moment, the big corporations are much more powerful. That's why we have such terrible farm prices. It's not likely we're going to make progress on this currency issue until we see a fundamental shift in the balance of power inside agriculture.
Lenz: What kind of a shift do we need to see?
Ritchie: Well, number one, we need to get market prices up to at least the cost of production. And this requires federal action. I mean, farm prices are made in Washington, and right now they're set far below the cost of production. The second thing is we have to get control over imports. We are a nation that has basically taken the position that we can import our food and our manufactured goods from around the world. And that's what we've gone about doing. That's why a lot of farm organizations were there in Seattle very upset with current U.S. trade policy. Finally, we need to take a hard look at how we are failing to enforce our laws around corporate concentration and monopoly. Farms are facing monopolies in terms of railroads, in terms of elevators, in terms of supply of seed. You name it, pretty much any business a farmer buys from or sells to is part of just a handful of corporations controlling those industries. We've seen some of the effects in terms of farmers losing their independence, becoming contract laborers, moving in the direction of becoming like chicken farmers and others who are under contract-to-labor arrangements. In the founding of the International Trade Organization which became GATT (General Agreement on Trade and Tariffs) which became the WTO, restrictions which were considered anti-competitive were prohibited. There were global anti-trust provisions in that original founding of the organization, which is now the WTO. Over the years, like in the United States where we have begun to ignore our anti-trust laws, those original prohibitions kind of fell by the wayside. But about five years ago a number of the countries involved now in the World Trade Organization began asking for a more global agreement on anti-trusts and monopolies. So I feel like that kind of negotiation will come in the future, and I think we need it. The corporations are global, so just to have a domestic anti-trust policy won't really work. At the same time here in the United States we have laws on the books, the Packers and Stockyards Act, the Wagner Act, and other laws that aren't being enforced. So while I believe we need these at the global traded negotiations, we also need to be enforcing these laws at home.
Lenz: Indeed some say, if monopolies were dealt with domestically, they likely would not be the problem in the world trading arena that some people perceive them to be.
Ritchie: I imagine that's true. Secretary Glickman, in particular, has refused to enforce the Packers and Stockyards Act. And it is his responsibility to enforce these laws. I don't know what would happen if everyone ignored the laws. But in any case if Secretary Glickman would enforce the law, I believe it would go a long way in dealing with some of these issues that face us at the global level.
Lenz: There was a term that came up at the WTO talks at Seattle that I had not heard before It was an insistence by Japan and, I believe the European Union, that in the agricultural portion of those talks, a term should be included referring to agriculture as "multi-functional." What does that mean?
Ritchie: Yes, the other term that is used for multi-functional is "non-trade concerns." Essentially it is the idea that agriculture does a number of things simultaneously. It produces food, it produces goods, it produces fiber, it produces fuel, it produces wildlife and habitat, it produces jobs, it produces clean water, it produces tourism and recreational oppor-tunities. I think this is a concept most farmers are very familiar with. They know they are doing more than producing food. They are producing a whole lot of other benefits for society. The argument is that to treat agriculture the same as manufacturing dish soap or shoes is a big mistake because it has many different functions in society. And you have to recognize those different functions if you're going to have an operating agricultural system.
Lenz: Given what you have just described, how can we possibly hammer out any kind of ag trade agreement that all nations would agree to? Especially when some of the "free traders" out there like Australia, Brazil, like Argentina, make this a very difficult task.
Ritchie: Yes, and I think you're raising a kind of fundamental issue which is a "one size will fit all" policy, which we have at the national level in the United States. They are trying to impose that on a global level in the WTO. To me it is reminiscent of the Soviet Union and the idea that giant, industrial agriculture run from the top with a single policy is the way to run a food and farming system. We know this is a disastrous approach The idea to have one global policy imposed on all the farmers from Kansas to Kazakhstan is from my point of view crazy.
Lenz: Was that message lost in the extensive media coverage of the violent protest in Seattle?
Ritchie: Oh, I think to a certain extent. Often overlooked were very large and very peaceful demonstrations by consumer groups, environmental groups, labor groups, human rights groups. There was a huge presence of many different people not happy with the current policy. But as the press coverage emphasized the photos of police, and tear gas and all that kind of thing, it certainly took away coverage of the issues. But I have to say that it did put the WTO on the radar screen. And even if the messages were not necessarily front and center, letting the people know that the WTO exists and is an important factor in how policy is set is an enormous accomplishment. And second, the fact that the third world countries basically shut down these negotiations because they were being run in such an anti-democratic manner, will probably fundamentally change the process of the negotiations. So that is a very hopeful, very positive outcome for these negotiations. And I think this will make the forming of trade policy more open to hearing from family farmers in the future.
