Tuesday, October 23, 2012

Passionate USA

It has taken a couple of days to really understand the American physic and I think passionate is the best word to describe everything they do.

We have been exposed to such a vast array of speakers, presenters, individuals, and businesses and the one thing they all have in common is 'passion'

Day 1
Hope Pjesky (Eisenhower fellow) our American host for the next few days, she is passionate about farming, government and making sure our brief time Washington is full of activities and excitement. This you have achieved, well done and thank you.

Day 2
Introduction to Australia & New Zealand, Agricultural Delegates to Washington and MLA Regional Manager.

Chris Parker, Minister-Counsellor (Agriculture) attached to the Australian Embassy, was such a breath of fresh air and to hear an Australian talking knowledgeably about the woes of foreign trade with the globes largest economy, is the best introduction on how Washington worked. Born in WA (not far from jemma), relocated to Penola for 5 years (played golf with Doug Bowen)and studied with farmers from Clare, he immediately connected to three scholars.

Chris painted a picture for us of where Australia is positioned in the trade and cross governmental relationships with the USA. Some comments and thoughts from this meeting;
300 staff in the Aus embassy, 150 directly involved in strategic alliance concerns, 3 staff work on agriculture
Agriculture represents 3% of Aust GDP, agriculture is 2% of the US GDP (farm gate prices), BUT USA agriculture lobby group is considered one of the most powerful voices in middle America (6 million farmers with 1 voice), how do we compete?
2015 the Free Trade Alliance with USA will open up US beef markets to Australian beef, ideally suited to grinding cattle which our northern cousins may benefit.
Australian Trade negotiations are focused on arguing against the premise that Aust uses Sanitary & Phyto-sanitary (SPS) regulations to limit trade (Aust/NZ apple ruling classic example), enhancing the ANZUS alliance especially given Aust has allowed US soldiers to be based on our soils, removal of price support on sugar and milk, understanding the US food safety bill (is this a trade barrier??), building support and formulating positions of the Trans Pacific Partnership (TPP) alliance.

The complexity of Chris's job is further blurred by the impact the WTO has on the USA regime and the conversations in play at any given time. The WTO assess any market adjustment tools in three ways, Green, Amber and Red. Green box actions include payments like environmental payments or direct land ownership payments, amber box subsidies are mechanisms like crop insurance (underwritten by the government) that assist famers in difficult seasonal conditions and red box subsidies are direct payments to famers for produce grown.
The WTO consider the US subsidies for milk & sugar to be red box and are challenging the US that the crop insurance schemes are also red box subsidies. This is a contentious issue especially given many US cereal growers have just harvested a severely drought affect crop and yet will have one of their better financial years on record. Is this not protectionism?
The US farmers will fight these views tooth and nail, good luck Chris.

To help the farmers manage these muddy waters, two significants factors exist, the US Farm Bill an the American Farm Bureau Federation.
The US Farm Bill, involves funding from the treasury to the tune of 1 trillion dollars over the next ten years for ag and non ag related programs. An interesting facet of the Farm Bill is that 80% of the program is directly tied to feeding the nation via 'food stamps' and the school nutrition program. Hence the question from an Australian view, "when the sovereign government is actively involved in buying food from the market and supporting farmers with crop protection, how can they say they are not subsidising agriculture?"

The American Farm Bureau is the lobbying vehicle for 6 million famers, 85% of the nations farmers, driven by "grass roots" concerns and a staff of over 300 people focused on influencing the American congress and assembly, no wonder they can preserve such an array of trading conditions.

Fascinating day, full of contradictions and insight, well worth the journey.

Location:Washington DC

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