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Fwd: En;GTW,Down on the Farm:Seven Years of NAFTA,Aug 01

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  • jack brown
    *Details of the NAFTA s transnational-corporate/government repression against the working-class/small businesses of México Canadá & the U.S., examplifying
    Message 1 of 1 , Aug 31, 2001
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      *Details of the NAFTA's transnational-corporate/government repression
      against the working-class/small businesses of M�xico Canad� & the U.S.,
      examplifying the futher decline of the nation-state...previews of what the
      FTAA would intensify throughout the continent. jm

      To: <chiapas-i@...>
      Subject: GTW,Down on the Farm: Seven Years of NAFTA,Aug 01
      Date: Wed, 29 Aug 2001 07:39:22 +0200

      Public Citizen Global Trade Watch
      http://www.citizen.org/pctrade/tradehome.html


      Down on the Farm: NAFTA's Seven-Years War on Farmers and Ranchers in the
      U.S., Canada and Mexico

      Dwindling Incomes for Small Farmers in the U.S., Mexico and Canada, Lost
      Farms and Rural Crisis is NAFTA's Legacy

      June 2001

      TABLE OF CONTENTS

      Executive Summary
      Introduction
      NAFTA Has Coincided with Agricultural Trade Deficits
      Agriculture Prices and Farm Incomes Have Collapsed Since NAFTA
      NAFTA Has Been Used to Justify Shredding Farm Safety Nets
      NAFTA, Free Trade and Deregulation Accelerated Concentration in Agribusiness
      NAFTA Encourages Commodity Dumping
      U.S. Corn Dumping into Mexico Devastates Mexican Farmers and Genetic
      Diversity
      NAFTA Seed Monopolies: Patent Protectionism
      The Record of Food Fights in the NAFTA Era
      The Endless Durum Wheat Fight and the Canadian Wheat Board Battles
      Canadian Softwood Lumber
      Mexican Peppers &Tomatoes
      Sugar from Mexico; U.S. High Fructose Corn Syrup
      NAFTA Promises Failed U.S. Asparagus Growers
      NAFTA Promises Fail to Save Cut Flowers Industry
      U.S. Prohibits the Import of Prince Edward Island Potatoes
      Canada Investigates U.S. Corn Dumping
      Peanuts
      FTAA Would Expand NAFTA's Attack on Farmers
      Conclusions and Recommendations
      Endnotes


      EXECUTIVE SUMMARY

      In the summer of 2001, family farmers and ranchers throughout North America
      are struggling.

      During the 1993 debate over the fate of the North American Free Trade
      Agreement (NAFTA), U.S. farmers and ranchers were promised that NAFTA would
      provide access to new export markets and thus would finally bring a lasting
      solution to farmers' off-and-on struggles for economic success.

      Now, seven years later, the evidence shows farm income has declined,
      consumer prices have risen and some giant agribusinesses have reaped huge
      profits. These outcomes are defining the growing national debates over
      President Bush's proposals to establish Fast Track trade authority and to
      expand NAFTA through the Free Trade Area of the Americas (FTAA).

      This report reveals the basis for farmers' concern about NAFTA and its model
      of export-oriented agriculture. For the past seven years, Midwestern and
      Plains states wheat farmers; ranchers in Montana, Texas and other states;
      vegetable, flower and fruit growers in California; lumber mill owners in
      Louisiana, Arkansas and Washington; vegetable growers in Florida; chicken
      farmers nationwide and others have suffered declining commodity prices and
      farm income while a flood of NAFTA imports outpaced U.S. exports to Canada
      and Mexico.

      Yet it was not farmers in Mexico or Canada who benefitted from U.S. farmers'
      woes. Millions of campesinos throughout Mexico have lost a significant
      source of income and left their small corn farms. Some became farm laborers
      working in squalid conditions for poverty wages on large plantations growing
      produce for export to the U.S. Others moved to Mexico's cities where
      unemployment is high. Canadian grain and dairy farmers also face steeply
      rising debt during the NAFTA era.

      And, consumers from Calgary to Chiapas have failed to see the price cuts for
      food promised during the NAFTA debate. While the prices paid to North
      America's farmers for beef, grains, vegetables and other foods fell to
      record lows, the U.S. Consumer Price Index shows that U.S. consumer food
      prices increased by almost 20% during NAFTA's first seven years This report
      also documents the rise in Mexican staple food prices, such as in tortilla
      prices, even as the price paid to Mexican corn farmers dropped 48%.

      However, NAFTA has brought seven years of good fortune to many of the
      agribusinesses that pressured Washington, Ottawa and Mexico City to
      negotiate and ratify NAFTA's corporate- managed trade terms. Since NAFTA
      stripped away many safeguards for the folks who produce raw agricultural
      products, relative power and leverage has grown for large agribusiness
      conglomerates to exert pressure on both farmers and consumers.

      In Washington D.C., the Bush Administration is pushing forward with an
      ambitious plan to expand the NAFTA model throughout the hemisphere through
      FTAA. President George W. Bush and his principal trade policy advisors have
      stated that they intend to make the debate about NAFTA expansion and Fast
      Track (which they want to rename "Presidential Trade Promotion Authority") a
      referendum on NAFTA.

      Public Citizen agrees that the debate over NAFTA expansion - indeed, the
      national conversation about the premises and direction of U.S. trade
      policy - should be decided on the basis of the real-life results of NAFTA
      and the model on which it is based.

      In this report, we show how independent farmers in the U.S., Mexico and
      Canada have seen agricultural prices plummet, farm incomes collapse and
      critical domestic agriculture safety net programs dismantled. International
      free trade agreements and the domestic policies which furthered
      implementation of the export-oriented model, such as the U.S. "Freedom to
      Farm Act," have proved to benefit only the largest agribusinesses while the
      majority of farmers and consumers have lost.

      Our principle findings are these:

      The U.S. Agricultural Trade Surplus Has Shrunk Under NAFTA
      The U.S. trade surplus in agricultural products, which once was the flagship
      of U.S. exports, has declined significantly since NAFTA went into effect,
      and that trend is most profound with NAFTA partners Canada and Mexico.

      While the U.S. world trade surplus in agricultural products declined
      29.6%during seven years of NAFTA, the U.S. NAFTA trade surplus in
      agricultural products declined 71%. The U.S. agricultural trade surplus with
      Mexico and Canada increased before NAFTA by $203 million (between 1991 and
      1994) but fell by $1.498 billion under NAFTA.

      This declining trade balance is caused because U.S. exports to Canada and
      Mexico have grown modestly, while imports to the United States from those
      countries have grown much faster. In 1989, competitive imports (those that
      replace crops grown in the U.S.) were 38% of U.S. export levels and 71% of
      all U.S. agricultural imports. Based on preliminary 2000 data, competitive
      imports were 60% of U.S. export sales and represented 80% of all U.S.
      agricultural imports.

      Meanwhile, the vaunted promises of new NAFTA export markets for U.S. farm
      products have proven to be as elusive as NAFTA proponents' promises of new
      U.S. manufacturing jobs created by exports to Mexico. Between the 1994-1995
      growing season and the 1999-2000 season:

      U.S. corn export volume fell by 11% and prices fell by 20%.
      the volume of wheat exports declined by 8% and prices dropped 28%.
      the volume of cotton exports fell by 28% and prices plunged 38%.
      during the same period, even though the volume of soybean exports increased
      16%, the total U.S. soybean crop value still declined by 2% because theb
      per-bushel price fell by 15%.

      The most consistent growth market for U.S. farmers has been the domestic
      consumer market. However, NAFTA provided guarantees of market access for
      agriculture products -- even when domestic production meets domestic
      needs -- so that U.S. farmers are now competing for the U.S. domestic market
      against a new flood of NAFTA imports. The result has been declining trade
      balances during the period of NAFTA for an array of commodities.

      Poultry: The poultry industry trade surplus fell 14% between 1995 and 1999.
      Cattle & Beef: The cattle and beef sectors' $21 million surplus in 1995 had
      become a $152 million deficit by 1999.

      Grain and Cereals: The grain and cereals surplus has slid by a third since
      1995. The oilseeds surplus has fallen 17%, and the animal and vegetable oils
      surplus has been cut in half since 1995. Fresh Chilled and Frozen
      Vegetables: The fresh, chilled and frozen vegetables trade deficit grew from
      $438 million in 1995 to a deficit of more
      than $1 billion in 1999.

      Fruit: The U.S. fresh fruit trade deficit grew from $127 million in 1995 to
      $469 million in 1999. The frozen fruit trade sector saw a $9 million surplus
      in 1995 become a $37 million deficit in 1999. The prepared and preserved
      fruit trade deficit grew by more than half, from a deficit of $236 million
      in 1995 to a deficit of $396 million.

      Juice: The $18 million fruit and vegetable juice surplus in 1995 became a
      $48 million deficit in 1999.

      Dairy: The dairy trade deficit nearly doubled from $416 million in 1995 to
      $796 million in 1999. Meanwhile, although the U.S. overall NAFTA
      agricultural balance declined significantly since NAFTA, U.S. agribusinesses
      dumping of corn and other grains put Mexican peasant farmers at a
      devastating disadvantage. In contrast, in Canada, agricultural exports grew
      and the Canadian agriculture trade surplus grew since NAFTA was enacted.
      However, despite the growing agriculture trade surplus, farm incomes in
      Canada have declined and farm debt has risen sharply. The Canadian National
      Farmers Union explains that
      replacing consumption of domestically grown food with imported agricultural
      products has subjected Canadian farmers to the low prices and high
      volatility of export markets, even if the net agricultural trade balance
      remains positive and grows.

      Agriculture Prices and Farm Incomes Have Collapsed Since NAFTA
      At the same time that U.S. agricultural trade surpluses with NAFTA partners
      dwindled to ever smaller surpluses and even deficits for two years, prices
      paid to farmers for agriculture commodities collapsed.

      Growing imports required under NAFTA have resulted in excess supply and
      sharply declining commodity prices. Between 1995 and 2000, the bushel price
      received by U.S. farmers declined 33% for corn, 42% for wheat, 34% for
      soybeans and 42% for rice. According to the U.S. International Trade
      Commission (U.S. ITC), the value of U.S. cereal and grain exports declined
      by 31% between 1995 and 1999 and the share of production going to exports
      fell by 17%. The value of U.S. oilseed exports declined 16% and the share of
      production going to exports fell by 15% between 1995 and 1999. The value of
      exports of U.S. tropical fruit such as pineapples, avocados and mangos fell
      16%, and the share of production going to exports fell 40%. The value of
      citrus exports fell by a third and the share of production going to exports
      declined by 37% between 1995 and 1999. The value of poultry exports has
      declined 13% between 1995 and 1999 and the share of poultry production going
      to exports has fallen by 26%.

      The result of the NAFTA agriculture model has been dwindling farm incomes
      for small farmers in all three countries.

      U.S. Farm Income: In the U.S., 33,000 farms with under $100,000 annual
      income have disappeared during the seven years of NAFTA. This is a rate six
      times steeper than the pre-NAFTA period. In the U.S., farm income is
      projected to decline 9% between 2000 and 2001 -- from $45.4 billion to $41.3
      billion in 2001. This compares to annual farm income of $59 billion before

      NAFTA went into effect in 1993 -- a 43% drop compared to the 2001 farm
      income projected by the Farm and Agriculture Policy Research Institute.

      Mexican Farm Income: NAFTA-required changes have resulted in literally
      millions of Mexican peasant farmers leaving their small farms and their
      livelihoods and being forced to migrate. The land redistribution program
      established in the Mexican Constitution at the time of the Mexican
      Revolution was changed to meet NAFTA's foreign investor protection
      requirements-- meaning that, for the first time in 80, years small farmers
      could lose their land to bad debt. Projections range up to 15 million
      displaced Mexican small farmers because of NAFTA's agriculture provisions.

      At the start of NAFTA, more than one quarter of Mexican workers were
      employed in agricultural production. While overall population growth in
      Mexico over the past decade was 20%, rural population growth is now 6% while
      urban population growth is 44%, showing a trend of displaced farmers
      migrating to Mexico's cities, where unemployment rates are high, or to the
      north.

      Canadian Farm Income: While Canada's NAFTA agricultural exports grew by C$6
      billion between 1993 and 1999, net farm income declined by C$600 million
      over the same period instead of rising by $1.4 billion as Agri-Food Canada
      had predicted. Since NAFTA, the rate of Canadian farm bankruptcies and
      delinquent loans is five times that before NAFTA, even as Canadian
      agricultural exports doubled. Dropping prices meant that in Canada, farmers'
      net incomes declined 19% between 1989 and 1999, although Canadian
      agricultural exports doubled during that period.

      NAFTA Has Been Used to Justify Shredding Farm Safety Nets
      Using NAFTA both as a sales pitch and as the political instrument to force
      policy change, corporate and political elites in Washington, Mexico City and
      Ottawa set about eliminating domestic farm programs aimed at safeguarding
      growers. In the U.S., the same interests helped shape the 1996 Freedom to
      Farm Act, part and parcel of implementing the export-oriented NAFTA
      agriculture model.

      While assorted export subsidies useful to commodity traders remained,
      domestic programs including price supports and commodity loans that had made
      family farming economically viable in the U.S. were cut. These domestic
      programs put protections into place to safeguard family farmers from the
      whims and dictates of the commodities brokers and speculators and to offer
      buffers against wild market fluctuations. When real grain prices fell by as
      much as 20% in 1998 -- after being depressed by half between 1978 and 1997
      -- farmers faced the cruel reality that the twin policies of free trade and
      elimination of domestic farm policies effectively would hand the entire food
      production and distribution sectors over to the agribusinesses who had
      pushed these trade and farm policies.

      Ironically, to counteract the failure of NAFTA and the same farm
      deregulation policies embodied in the Freedom to Farm Act, Congress has had
      to appropriate emergency farm supports -- in massive farm bailout bills
      --every year since the legislation went into effect.

      As well as the undoing of Mexico's land reform policy, the Mexican
      government eliminated floor prices for corn and caps on tortilla prices, and
      government investment in agricultural projects fell by 90% even though 39%
      of Mexico's population lives in rural communities.

      NAFTA's rule empowering investors, guaranteeing grain traders access rights
      and constraining government regulatory action has set up a race to the
      bottom in farm income, wages and sanitary and environmental standards. For
      instance, a quantity of the huge new NAFTA flood of tomatoes and peppers are
      coming from transnational agribusinesses which relocated production to
      Mexico to access $3.60/day rural labor, exploit the use pesticides banned in
      the U.S. and enjoy unlimited duty-free access back into the U.S. consumer
      market. Lax Mexican labor law enforcement also means the Mexican operations
      are not required to invest in worker safety or sanitation. The result is
      that Mexican farm workers are being exposed to toxic pesticides and squalid
      work conditions.

      Meanwhile, the food produced under such conditions runs a
      greater risk of contamination and poses increased risk to consumers. In
      1998, contaminated strawberries were imported from Mexico, causing a massive
      hepatitis outbreak among Michigan school children eating the berries in
      school lunches. In 2001, two people died from salmonella after being
      infected by cantaloupe from Mexico which could have been contaminated
      through unsanitary working conditions such as a lack of bathrooms and hand
      washing facilities on Mexican farms.

      Greater Concentration of Agribusiness in NAFTA Era Many agribusiness
      concerns operating in North America took advantage of the
      new rights of market access for agricultural products and NAFTA's new
      investor protections and began rapid consolidation. Agribusiness
      mega-mergers like the unions of Smithfield Foods and Murphy Family Farms, or
      top poultry producer Tyson Foods with meat packer IBP, have become a feature
      of the NAFTA era.

      Agribusinesses have been able to create new export platforms which play
      farmers from the U.S., Mexico and Canada against one another in a fight for
      survival as prices paid to producers are steadily pushed down. While the
      number of independent farmers dropped between 1993 and 2000, agribusiness
      giants such as ConAgra and Archer Daniels Midland had significant earnings
      gains. From 1993 to 2000, ConAgra's profits grew 189% from $143 million to
      $413 million; and Archer Daniels Midland's profits nearly tripled between
      1993 and 2000 from $110 million to $301 million.(1)

      NAFTA Encourages Transnational Agribusinesses to Dump Low-Priced Farm
      Commodities

      The report describes how U.S. corn dumping into Mexico has devastated
      Mexican farmers and undermined the genetic diversity of Mexico's corn
      breeds. Although NAFTA provided a 15-year phase-in of corn import levels,
      the Mexican government opened the market in two years. Tons of imported corn
      sold below the floor price Mexican farmers had received before NAFTA flooded
      into the market. Between NAFTA's enactment in 1994 and 1998, Mexico's import
      of cheap corn forced millions of Mexican maize farmers and their families
      off the land; some projections run to as many as 15 million people, or about
      one in six Mexicans. While millions of peasant farmers left their farms and
      livelihoods, perversely the price for Mexican consumers of corn tortillas
      increased proving wrong the oft-repeated free trade mantra that greater
      imports and lower commodity prices benefit consumers with price cuts.

      Worse, Mexico's new reliance on imported corn meant that when U.S. corn
      supplies fell in 1996, Mexico faced a corn shortage that contributed to the
      malnourishment of one in five children.

      One More Agribusiness NAFTA Goodie:
      Intellectual property provisions that are patent protectionism and encourage
      biopiracy NAFTA contains a chapter establishing intellectual property rights
      that require the three countries to issue patents guaranteeing 20-year
      monopoly marketing rights on a vast array of items, including seeds and
      plant varieties. It also required Mexico to change its domestic law and
      institute criminal penalties for violating these NAFTA rules. These vast new
      intellectual property rights have established yet another way for U.S. and
      Canadian agribusinesses to benefit from NAFTA: biopiracy. Indigenous
      communities that have been planting and crossbreeding strains of food crops
      for centuries to develop perfectly adapted varieties can be required, under
      NAFTA, to pay an annual license fee to use their own saved seeds if a
      corporate bio-prospector has collected the seeds and patented them. The
      report documents several specific cases that have arisen in recent years.

      The Record of Food Fights Under NAFTA
      A review of the agricultural trade disputes that have occurred during NAFTA
      reveals that many of the commodity constituencies that were supposed to have
      benefitted under NAFTA have, in fact, found their legitimate expectations
      subordinated to NAFTA's unfortunate reality. The study includes a detailed
      review of the U.S.-Canada softwood lumber fights and an array of other cases
      including:

      The Endless Durum Wheat Fight and the Canadian Wheat Board Battles. A series
      of ongoing trade disputes over U.S.-Canada wheat trade have failed to remedy
      the pre-NAFTA or post-NAFTA problems for U.S. wheat farmers.

      Peppers.
      Florida and California bell pepper farmers and New Mexican chile pepper
      farmers also are facing a flood of cheap chile pepper imports from Mexico,
      depressing prices and putting farmers out of business. To date, although the
      U.S. ITC has produced reports on the increasing importation of peppers into
      the U.S., required under NAFTA's implementing legislation, it has not
      recommended any actions to protect beleaguered domestic growers.

      Tomatoes.
      Within the first two years of NAFTA's enactment, two thirds of Florida's
      tomato production was eliminated. Again, the U.S ITC has recommended no
      import surge protection or other safeguards.
      Sugar from Mexico; U.S. High Fructose Corn Syrup. The U.S. and Mexico have
      been locked in a dispute over the amount of sugar the U.S. is required to
      import under NAFTA. The victims of this dispute are sugar beet growers in
      Colorado, Wyoming, Idaho, Michigan, Texas, Minnesota, Montana, Nebraska, New
      Mexico, North Dakota, Ohio, Oregon, California and Washington.

      FTAA Will Expand NAFTA's Attack on Farmers
      Finally, the report reviews data on farmers' prospects under the proposed
      FTAA. According to a comprehensive 1998 analysis of FTAA by the U.S.
      Department of Agriculture, FTAA will have a minimal positive impact on farm
      incomes in the U.S. at best. The report also found that FTAA would increase
      the U.S. agricultural trade deficit with FTAA countries. The USDA estimates
      that FTAA would increase agricultural imports into the U.S. by 3%, but
      increase U.S. agricultural exports by only 1%.

      FTAA would open U.S. markets to South American agricultural export giants
      such as Brazil, Argentina, Chile and Uruguay. However, FTAA would not offer
      significant new export opportunities for U.S. producers. This is because
      many of the FTAA countries already have lower than NAFTA-level agriculture
      tariffs, yet the U.S. has no export markets there because competitive goods
      can be produced more cheaply than in the U.S.

      According to USDA, the U.S. already has an agricultural trade deficit within
      the FTAA region of $2.6 billion in 2000. The USDA found that the FTAA would
      increase the regional U.S. agricultural trade deficit by $250 million -- an
      18% increase. Updated 2000 USDA figures on FTAA show that if the FTAA were
      implemented, the U.S. agricultural trade deficit with the FTAA countries
      would grow by 1% for the first five years, 2% for the next 10 and then keep
      increasing.

      Oddly, both of USDA's comprehensive FTAA analyses are noticeably silent on
      the potentially devastating impact the FTAA could have on fruit and
      vegetable growers, given that Chile is a world-class producer of fruits and
      vegetables that compete directly with produce grown in the U.S. (Only orange
      juice is noted by USDA, which reports that imports of Brazilian orange juice
      would increase steeply, wiping out U.S. production.) An array of U.S.
      commodities would be hurt if FTAA went into effect.

      In 1996, the U.S. had a $1.6 million soy surplus with Argentina, and in 2000
      the U.S. had a $2.8 million soy deficit. In 1996, the U.S. had a $53 million
      soy surplus with Brazil, and in 2000 the U.S. had a $843,000 soy deficit.
      The U.S. has significant beef trade deficits with Argentina, Brazil and
      Uruguay. The U.S. beef deficit with Brazil has grown 1400% since 1991, from
      $6 million to $91 million. Even without special market access privileges for
      Chile, U.S. fresh fruit imports from Chile grew by 42%, to $597 million
      between 1996 and 2000. California's dominant domestic market share of wine
      and table grapes is vulnerable to imports from Chile. The U.S. world grape
      trade deficit has doubled between 1996 and 2000 to $191 million in 2000.
      Over the same period, the value of grape imports from Chile has grown 32%
      since 1996, to $388 million in 2000.

      Conclusions and Recommendations
      Given the NAFTA models' negative track record for farmers and consumers in
      the three NAFTA countries, growing opposition nationwide to the notion of
      expanding NAFTA through the proposed Free Trade Area of the Americas is not
      surprising. The seven-year record of NAFTA on agriculture sets the context
      for the increasingly heated debate about the demand by the Bush
      Administration that Congress delegate away its constitutionally designated
      authority to set U.S. trade policy by granting the Administration multi-year
      Fast Track trade authority.

      The Administration argues that Fast Track is necessary for the U.S. to
      successfully negotiate and approve trade agreements. Yet although hundreds
      of trade pacts were implemented since Fast Track's 1974 inception, Fast
      Track has been used only five times. According to the Office of the United
      States Trade Representative, nearly 300 separate trade agreements were
      negotiated by the Clinton Administration.

      At the last House Agriculture Committee hearing on trade, Commerce Secretary
      Evans could not name a single country that refused to negotiate with the
      U.S. because of the absence of Fast Track. Evans admitted that several
      additional Latin American countries already have approached the U.S. to
      negotiate bilateral FTAs even without Fast Track. Given that these countries
      join a list that includes Singapore, New Zealand and others, the issue seems
      to be a shortage of U.S. negotiators to work with all of the countries
      seeking deals, not a lack of Fast Track keeping away new potential trade
      partners.

      The only way to ensure that U.S. trade policy suits the broad needs of U.S.
      farmers and consumers is for Congress and the public to play a more
      prominent and continual role in the entire policy process -- from setting
      the U.S. agenda to selecting appropriate prospective trade partners with
      whom to negotiating to ensuring the negotiations are obtaining U.S. goals
      and then to guaranteeing that only agreements that meet U.S. goals are
      approved and implemented. This level of involvement and oversight is
      impossible under the Fast Track process. The conclusion also lists the
      principles of a fair agriculture trade policy.

      INTRODUCTION

      In the seven years since the North American Free Trade Agreement (NAFTA)
      went into effect, independent farmers in the U.S., Mexico and Canada all
      have seen agricultural prices plummet, farm incomes collapse and critical
      domestic agriculture safety net programs dismantled. International free
      trade agreements and the domestic policies which implement them, such as the
      U.S. "Freedom to Farm Act" have caused agribusiness giants to gain a
      disproportionate share of power over the entire agricultural sector from
      farm to table. Commodity trading, seed, chemical and processing
      agribusinesses have crossed national borders and are able to keep the prices
      paid to producers low by creating new export platforms which play farmers
      from the U.S., Mexico and Canada against one another in a fight for survival
      as prices paid to producers are steadily pushed down. Meanwhile, even as
      commodity prices have plummeted, consumer costs for food have increased in
      all three NAFTA countries.

      Although the total volume and value of U.S. world
      agricultural trade has increased slightly since NAFTA, the U.S. agricultural
      trade surplus has declined dramatically, particularly with the NAFTA
      partners of Canada and Mexico. U.S. farm income is significantly lower than
      before NAFTA went into effect.

      Free trade in general and NAFTA in particular have been used as a
      justification for eliminating domestic farm programs in all three NAFTA
      countries. The absence of these programs in the face of consolidating
      agribusiness and declining commodity prices has been a substantial
      contributing factor to the demise of family farms in the U.S., Canada nd
      Mexico. Free trade proponents contend that gaining access to export markets
      is the way to stabilize and reinvigorate the economics of farm life,
      perennially difficult given weather and commodity fluctuations. Free trade
      proponents in agribusiness and in the Administration of George W. Bush
      continue to contend that gaining access to export markets is the way to
      stabilize and reinvigorate the economics of farm life, perennially difficult
      given weather and commodity fluctuations. Yet with more farmers and farm
      groups in the U.S. joining consumer, environmental, religious, anti-poverty
      and other groups opposing the NAFTA model, the Bush Administration is well
      aware that its only hope for expanding the NAFTA model is to take the
      decision out of
      the U.S. Congress' hands.

      The U.S. Constitution gives Congress exclusive authority "to regulate
      Commerce with foreign Nations."(2) "Fast Track" is a mechanism established
      in 1974 and used only five times since that delegates away to the Executive
      Branch this congressional authority for setting trade terms as well as other
      normal congressional powers. Fast Track expired in 1994. President Bill
      Clinton's 1997 and 1998 requests to Congress to delegate its trade authority
      through Fast Track were refused by the House of Representatives.

      Especially in the U.S. House of Representatives, which stands for election
      every two years and thus is most accountable to the American voters, a
      growing majority is concerned about, if not opposed to the expansion of the
      NAFTA model. Thus, Fast Track, which effects a significant lessening of
      congressional power and leverage vis a vis the Executive Branch regarding
      trade policy, becomes necessary to push expansion of the failed NAFTA model
      to the entire hemisphere over congressional objections. With this new
      political reality in mind, the Bush Administration, a coalition of the
      largest U.S.-incorporated multinational corporations and the usual
      agribusiness interests have begun pushing for Fast Track again.

      When NAFTA was debated in 1993, the large agribusiness interests succeeded
      in selling their vision of U.S. farmers' problems being solved by greater
      exports and thus in getting traded away many U.S. domestic agriculture
      programs the termination of which implemented their "free market" vision.

      Yet, while imposing free market disciplines on domestic producers, large
      commodity companies and farm insurance operators, such as the American Farm
      Bureau Federation, continue to push for agriculture export subsidies. Now,
      assorted export subsidies remain in U.S. law, but the domestic programs
      including price supports and commodity loans that had made family farming
      economically viable in the U.S., have been cut. It was these domestic
      programs which put protections into place to safeguard family farmers from
      the whims and dictates of the commodities brokers and speculators and to
      offer buffers against wild markets fluctuations.

      Yet, during past trade debates the promise of vast new export markets was
      used to justify removing -- through the so-called Freedom to Farm Act and
      other "market" reforms -- crucial policies aimed at managing the most severe
      risks faced by U.S. family farmers. Promoters of the 1996 Freedom to Farm
      Act argued that strong export growth would replace the need for U.S.
      government price and income supports.(3)

      At the same time, also in the name of implementing NAFTA, Mexican and
      Canadian farmers faced similar market "liberalization" policies which left
      producers throughout North America at the mercy of consolidating commodity
      and other agribusiness giants. When real grain prices fell by as much as 20%
      in 1998 -- after being depressed by half between 1978 and 1997 -- farmers
      faced the cruel reality that the twin policies of free trade and elimination
      of domestic farm policies effectively would hand the entire food production
      and distribution sectors over to the agribusinesses that had so vociferously
      lobbied for these trade policies.(4)

      Independent farmers throughout North America have been cornered by a range
      of vested interests that sought control of all aspects of the food
      industry -- except the work required to actually produce grains, meats,
      fruit, oilseeds, vegetables and timber. The free trade and domestic
      deregulation policies confronted family farmers with pressures unknown since
      the 19th century robber barons of finance, distribution, marketing and
      transportation. Small farms in the U.S. with sales under $100,000 a year
      declined rapidly during NAFTA's first seven years (between 1993 and 2000),
      with nearly 33,000 farms of this size eliminated.(5) Moreover, the decline
      in such small farms after NAFTA was six times steeper than the five-year
      period before NAFTA (between 1989 and 1993).(6)

      Agriculture Commodity Prices Fall, But Food Prices Rise
      Declining prices paid to farmers for agricultural goods have had little
      impact on the cost of food for consumers. Between the 1974-1979 period and
      2000, consumer food prices have risen by 250%, while the prices that farmers
      receive have remained flat or even declined during that period.(7)

      According to U.S. Census Bureau figures, the consumer price index for food
      (real prices for food eaten at home) in the U.S. rose by 19.8% under NAFTA
      (1993 and 2000).(8) A 2000 study of feedlot and retail prices for beef found
      that an East Texas feedlot sold a 1,000 pound choice steer for $620.(9)
      However, by the time the meat was sold in the supermarket, it cost consumers
      the equivalent of $1,697 per steer -- nearly three times the price the
      feedlot received which itself was greater than the price the rancher
      obtained from the feedlot.(10) The story has been the same in Canada and
      Mexico. Between 1994 and 1999, Canadian farmers received less than $C5 a
      bushel for wheat, but the prices for bread from the same bushel rose from
      about $C80 a bushel to $C90 a bushel over the same period.(11)

      Although the flood of imported U.S. corn has cut corn commodity prices by
      nearly half in Mexico, devastating small Mexican farmers, market
      imperfections and cartelization in the retail trade has prevented these
      price slides from being passed on to consumers.(12) Indeed, the prices of
      tortillas have actually risen since NAFTA, despite the corn commodity price
      collapse.(13)

      While the profits of major commodity traders boomed, key farm financial
      stresses also grew under NAFTA. For instance, grain growers in the plains
      states of the U.S. and western Canada were decimated by crashing commodity
      prices. According to data from USDA's Economic Research Service, the
      percentage of farms filing for bankruptcy and of farm loan volume that was
      more than 30 days delinquent was higher on average between 1994 - 2000 than
      between 1989-1993, the five years before NAFTA went into effect.(14) While
      the number of independent farmers dropped between 1993 and 2000,
      agribusiness giants such as ConAgra and Archer Daniels Midland had
      significant earnings gains. ConAgra's profits grew 189% from $143 million in
      1993 to $413 million in 2000, and Archer Daniels Midland's profits nearly
      tripled from $110 million in 1993 to $301 million in 2000.(15) With these
      commodity broker giants operating worldwide, they, not weather or sweat
      equity, were able to determine both supplies and prices of many commodities,
      even as consumers face increased food prices. Meanwhile, while farmers
      received four percent less on average for their crops in 2000 than they did
      in 1990-1992(16), the consumer price index for food (real prices for food
      eaten at home) in the U.S. rose by 19.8% during the NAFTA era (1993 and
      2000).(17)

      Meanwhile, under NAFTA, U.S. fruit and vegetable growers have been swamped
      by produce from Mexican plantations. Some of these large plantations are
      owned and operated by transnational agribusiness concerns which, by
      relocating to Mexico, are able to use pesticides banned in the U.S., exploit
      $3.60-a-day5 Mexican farm labor(18) and avoid U.S. regulations regarding
      safe and sanitary working conditions.(19) Yet while produce exports to the
      U.S. from Mexico soared, Mexican peasant farmers growing food staples were
      being displaced by a surge of imported corn, wheat and rice, and their small
      plots of land have either been abandoned or merged into large plantations to
      grow produce for export.

      The agribusinesses promoting NAFTA and other free trade deals like the World
      Trade Organization (WTO) (and currently Fast Track and the Free Trade Area
      of the Americas (FTAA)) promised that the farmers who had struggled through
      the farm bankruptcies of the Reagan administration could export their way to
      economic prosperity.

      A group of 101 agriculture trade associations formed a coalition called "Ag
      for NAFTA" to pressure Congress to pass NAFTA, contending that farm exports
      would create an additional 50,000 agriculture jobs.(20) Yet, in expectation
      of NAFTA's passage, in 1991 Cargill Corporation invested in a meat packing
      plant in Mexico, gaining access to Mexico's much lower wages.(21) When NAFTA
      passed the House of Representatives, the National Pork Producers Council
      (NPPC) issued a press release touting the trade agreement for hog farmers,
      noting that NAFTA "[w]ill greatly enhance our opportunity to export pork and
      pork products as well as live hogs to Mexico," and predicting that pork
      exports would grow by 400,000 metric tons.(22) Yet pork exports to Mexico
      grew only by 80,000 metric tons between 1993 and 2000, 80% below the NPPC
      predictions.(23) However, the growth in exports to Mexico is dwarfed by the
      rising pork imports from Canada, which grew by 146,000 metric tons between
      over the same period.(24) Indeed, in 2001, a majority of the hog farmers
      whose mandatory fees fund the National Pork Producers Council voted to end
      the mandatory "check off" contributions for the Council, which had led the
      advocacy for pro-agribusiness production and free trade, including NAFTA,
      the WTO and China Permanent Normal Trade Relations.(25)

      In 1993, the California Tomato Board reported that "growers see exports to
      Mexico increasing from 7,000 metric tons this year to 17,000 tons by
      1995."(26)

      Yet, NAFTA's reality was quite contrary to what NAFTA's proponents
      predicted. In a 1995 interview, a Tomato Board representative said, "NAFTA
      hosed us! 1995 exports are down 90 percent from this period last year. We
      did not have problems before NAFTA. NAFTA is not worth writing home
      about."(27) In 1994, the Canadian Ministry of Agriculture and Agri-Food
      Canada predicted that every C$1 billion increase in farm exports, through
      agreements such as NAFTA, would generate an increase of C$235 million in net
      farm income.(28) However, although Canada's NAFTA agricultural exports grew
      by C$6 billion between 1993 and 1999, net farm income declined by C$600
      million over the same period instead of rising by C$1.4 billion as Agri-Food
      Canada predicted.(29)

      Family farmers in the U.S., Mexico and Canada opposed NAFTA because the
      terms of the trade deal were designed to benefit giant agribusiness and not
      independent farmers. In the U.S., the National Farmers Union was concerned
      that NAFTA would undermine sustainable agriculture in all three NAFTA
      countries, dismantle farm supports for small farmers and eliminate the
      import limits necessary to protect family farms.(30) The Institute for
      Agriculture and Trade Policy pointed out that specific provisions in NAFTA
      encouraged concentration in the food processing industry and the expansion
      of factory farms and agribusiness in all three NAFTA countries.(31) In 1993,
      Victor Quintana of the Mexican Peasant Democratic Coalition (Prento
      Democratico Campesino) warned that after ten years of structural adjustment
      policies designed to attract foreign investment and promote export-oriented
      agriculture, Mexican family farmers were poorly positioned to compete with
      foreign producers.(32) Reduced subsidies and investment, he said, already
      had curtailed productivity and collapsed profitability for family farmers in
      Mexican agriculture.(33) He observed that NAFTA only would increase Mexican
      farmer dislocation in favor of multinational agribusiness, increase rural
      poverty and encourage unsustainable farming practices.(34) Even Mexican
      Undersecretary of Agriculture Luis Tellez predicted that NAFTA would push an
      average of one million farmers off their farms each year for ten years.(35)

      The independent farmers who criticized NAFTA underestimated the devastating
      impacts it would have on rural communities in all three countries. Newly
      empowered by the terms of NAFTA and its domestic implementation,
      transnational agribusinesses were positioned to play independent family
      farmers from different countries off of each other. Absent the domestic
      agricultural safety nets, small farms could not survive on the prices being
      paid by agribusinesses, which could game supplies of commodities to keep
      prices low and profits high. Perversely, low-price agricultural imports
      flooding in under this game were putting domestic growers at a disadvantage
      in the U.S., Canada and Mexico.

      Expanding the NAFTA model to the entire western hemisphere through FTAA
      would threaten further small family farmers in the U.S., Mexico and Canada.
      According to the U.S. Department of Agriculture (USDA), the FTAA is also
      expected to dramatically increase Latin American wheat, beef, fruit, flower
      and other agriculture exports to the U.S.(36) Moreover, FTAA is unlikely to
      deliver benefits to U.S. farmers or the agricultural sector in general. In
      January 2001, the U.S. House Agriculture Committee received the final report
      of the Commission on 21st Century Production Agriculture, whose membership
      has a pro-NAFTA tilt and which had at best mixed views on the benefits of
      FTAA for farmers and agriculture. The Commission was established by the
      Freedom to Farm Act to measure the impact of federal farm policies, on
      farmers and the agriculture economy including trade, regulatory and tax
      policies, and report its findings to Congress.(37) The minority view(38) of
      the Commission on 21st Century Production Agriculture report to the U.S.
      President and Congress noted that the benefits from the FTAA are "likely to
      be mixed or inconsequential relative to other issues."(39) USDA's analysis
      of FTAA's implications is yet more negative.(40) Meanwhile, in Latin America
      and the Caribbean, imposition of this model effectively would reverse the
      agrarian land reform of the past decades, delivering family farms into the
      hands of giant agribusinesses, as has occurred in Mexico.

      Despite NAFTA's harsh rural outcomes, U.S. FTAA negotiators are not seeking
      to redress NAFTA's concentration of economic power in the hands of
      agribusinesses; instead they have put existing U.S. anti-dumping provisions
      on the table to be traded away.(41)

      NAFTA Has Coincided with Agricultural Trade Deficits
      The U.S. trade surplus in agricultural products, which was once the flagship
      of U.S. exports; has declined significantly, and U.S. employment in the
      agriculture sector is declining. The NAFTA trend of declining U.S.
      agriculture trade surpluses and declining U.S. farm income parallels the
      outcomes under the WTO's global trade rules. The vaunted promises of new
      NAFTA (and WTO) export markets for U.S. agricultural products have proved to
      be as elusive as NAFTA proponents' promises of new U.S. manufacturing jobs
      created by greater exports to Mexico.

      Under NAFTA, the volume of U.S. agricultural exports to Mexico and to Canada
      did rise, however, the volume of imports from Mexico and Canada grew even
      faster, eroding the U.S. agricultural trade surplus with NAFTA countries.
      Thus, while the U.S. agricultural trade(42) surplus with the NAFTA countries
      increased before NAFTA by $203 million (between 1991 and 1994), it fell by
      $1.498 billion during NAFTA (between 1994 and 2000).(43) The NAFTA
      agricultural product trade surplus has declined more rapidly than the U.S.
      worldwide trade surplus in agricultural products has declined, falling 70.7%
      -- from $1.6 billion in 1993 to $456 million in 2000 (including two years of
      agriculture trade deficits in 1995 and 1999).(44) Meanwhile, farm income is
      declining as U.S. farmers face volatile and declining commodity prices on an
      international market dominated by a handful of huge multinational commodity
      trading corporations that advocated for and now can use NAFTA and WTO's
      rules for the farm sector.(45)

      Over the past two decades, contrary to promises of growing agriculture
      exports from new trade pacts, U.S. crop exports fell from nearly a quarter
      of world agriculture trade (24%) to 18% in 2000.(46) The U.S. world trade
      surplus in agriculture products has declined significantly since NAFTA and
      the WTO went into effect, and that trend is most profound with NAFTA
      partners Canada and Mexico. The U.S. world trade surplus in agricultural
      products declined 29.6% since before NAFTA from $17.9 billion in 1993 to
      $12.6 billion in 2000.(47) The U.S. NAFTA trade surplus in agricultural
      products declined 71% since NAFTA, from $1.56 billion in 1993 to $456
      million in 2000.(48)

      While the promise of new export markets for U.S. agriculture products was
      being held up as a cure-all for farmers as is Fast Track now, the reality is
      that demand arising from export markets has remained fairly flat over the
      past two decades. Export demand has tended to remain steady over time
      because most nations prefer to produce their own foodstuffs and primarily
      import agricultural products to offset unmet food demand due to natural
      disasters or because population growth exceeds agricultural production
      growth.(49)

      Importantly, other countries' food imports are unresponsive even to
      significantly lower prices from foreign producers -- no nation will import
      more of a staple, such as corn or wheat, than it can possibly eat.(50)
      Indeed, the most reliable source of demand for U.S. farmers has remained the
      domestic market, which has shown steadier population and income growth
      sufficient to increase consumption of U.S. agricultural farm goods.(51)
      However, increased agriculture imports into the U.S. under NAFTA and WTO are
      competing for this domestic demand. Meanwhile, grain trading and other
      agribusiness corporations newly empowered by NAFTA and the WTO are more able
      to control import supplies to drive down the price U.S. farmers can demand.

      However, while the growth in imports has lowered commodity prices paid to
      farmers, consumers' food costs have risen. If this trend were not disturbing
      enough for producers and consumers, a recent study shows that USDA routinely
      overestimates future export market opportunities because USDA projections
      are based on faulty models which tend
      to underestimate world food supplies.(52) These projections have a poor
      track record because they are biased toward rising agricultural exports,
      rarely predicting stable or declining exports.(53) According to a recent
      report by C. Philip Bamuel of Iowa State University professor of Economics
      and Agriculture, for example, USDA models consistently project increasing
      U.S. grain exports even though grain exports actually have declined steadily
      from their 1980 peak.(54) Indeed, since 1985, the U.S. share of world
      agriculture trade not only has declined, but also major crop exports from
      the U.S. have decreased.(55)

      An American Corn Growers Association long-term analysis of U.S. agriculture
      trade trends found that the overall agriculture trade balance (U.S. exports
      minus U.S. imports) between 1990 and 1995 averaged $22.8 billion in
      inflation-adjusted dollars, but between 1996 and 2000 the inflation-adjusted
      agriculture trade balance averaged $15.7 billion -- a 31% decline.(56) The
      agriculture trade balance in 2000 fell to $12.6 billion -- 45% lower than
      the early 1990s.(57)

      Between the 1994-1995 growing season and the 1999-2000 season, U.S. corn
      export volume fell by 11% and prices fell by 20%; the volume of wheat
      exports declined by 8% and prices dropped 28%; and the volume of cotton
      exports fell by 28% and prices plunged 38%.(58) During the same period, even
      though the volume of soybean exports increased 16%, the total U.S. soybean
      crop value still declined by 2% because the per-bushel price fell by
      15%.(59)

      On the import side of the trade balance, competitive imports (those that
      replace crops produced in the U.S.) are growing. In 1989, the U.S.
      agriculture trade surplus was $18 billion.(60) That year competitive imports
      were 38% of U.S. export levels and 71% of all U.S. agricultural imports.(61)
      By 2000, the U.S. agricultural trade balance fell to $12.6 billion.(62)
      Based on preliminary 2000 data, competitive imports were 60% of U.S. export
      sales and represented 80% of all U.S. agricultural imports.(63)

      Even the pro-free trade Commission on 20th Century Production Agriculture
      admits that U.S. agricultural exports declined by 15.6% in 2000 from the
      peak in 1996.(64) The minority view of the Commission report noted that
      although agricultural exports increased an average of 2.5% annually since
      1989, imports increased by 10% a year -- four times as fast as exports.(65)
      The dissent identified two fundamental flaws in the majority's analysis.

      First, by focusing on exports, the free trade proponents downplayed the
      competitive imports, which now substitute for 17% of total U.S. farm and
      ranch output.(66) Second, the technique of measuring free trade's impact on
      agriculture on an acre-by-acre basis (i.e. total agricultural exports
      divided by farmland acreage) deceptively suggested that agriculture trade
      benefits came from farmland, downplaying the powerful added value of
      agribusiness processing and merchandising which requires little acreage.

      According to data from the U.S. International Trade Commission (U.S. ITC),
      the total trade balance for many U.S. agricultural goods is worsening,
      especially for hard-hit products like fruits and vegetables.(67) Even for
      some stronger exports such as grain, the balances are declining. Even for
      agriculture products that had trade surpluses in 1995, trade balances now
      are declining, as are many U.S. businesses and livelihoods:

      Cattle & Beef: The cattle and beef sectors' $21 million surplus in 1995 had
      become a $152 million deficit by 1999.(68) Grain and Cereals: The grain and
      cereals surplus has slid by a third since
      1995, the oilseeds surplus has fallen 17%, and the animal and vegetable oils
      surplus has been cut in half since 1995.(69)

      Poultry: The poultry industry trade surplus fell 14% between 1995 and
      1999.(70)

      Fresh Chilled and Frozen Vegetables: The fresh, chilled and frozen
      vegetables trade deficit grew from $438 million in 1995 to a deficit of more
      than $1 billion in 1999.(71)

      Fruit: The U.S. fresh fruit trade deficit grew from $127 million in 1995 to
      $469 million in 1999.(72) The frozen fruit trade sector had a $9 million
      surplus in 1995 but saw a $37 million deficit in 1999.(73) The prepared and
      preserved fruit trade deficit grew by more than half, from a deficit of $236
      million in 1995 to a deficit of $396 million.(74)

      Juice: The $18 million fruit and vegetable juice surplus in 1995 has become
      a $48 million deficit in 1999.(75)

      Dairy: The dairy trade deficit nearly doubled from $416 million in 1995 to
      $796 million in 1999.(76)

      Mexico: At the start of NAFTA, more than 25% of Mexican workers were
      employed in agricultural production.(77) Mexico's farmers were ill-prepared
      to compete with the market power of the huge commodity trading companies
      that sought NAFTA as a means to access Mexico's food production market.
      Grain trading companies dumped tons of grains purchased cheaply -- sometimes
      below production costs -- from U.S. and Canadian farms. Even without
      underpaying U.S. producers, U.S. corn can be produced at 40% of the cost of
      production in Mexico.(78) Mexico's world agricultural trade balance also
      declined since NAFTA, and agriculture declined as a share of the Mexican
      economy. Under the dual regimes of free trade and structural adjustment,
      Mexico's agriculture declined from 10% of the gross domestic product in the
      1980s to 5% in 2000.(79) Despite the fact that 39% of the Mexican population
      lived in small farming communities in 2000,(80) the growth in Mexico's
      agricultural production during the 1990s was lower than the growth levels
      during the 1970s.(81) Such a decline in the agriculture sector in a
      less-industrialized country such as Mexico has broad and severe effects on
      society.

      In Mexico, rural land was transferred to larger farms and the number of
      small farm units declined more dramatically in the 1990s than in previous
      decades.(82)

      The damage to small Mexican farmers has occurred even though the growth of
      total agricultural imports into the U.S. from Mexico is significantly
      outpacing U.S. agricultural exports to Mexico. Yet even the limited U.S.
      export growth to Mexico in certain commodities has damaged Mexico's
      agricultural sector.

      Between 1994 and 1998, Mexico's wheat imports, primarily from the U.S. and
      Canada, grew to 35% of total consumption from 12% in the 1980s.(83) Over the
      same period, Canada's agricultural trade surplus nearly doubled. Indeed, if
      current trends continue, Mexico's agriculture sector is projected to be a
      drag on Mexico's economic output by 2016.(84)Although the U.S. overall NAFTA
      agricultural trade balance declined
      significantly since NAFTA went into effect as a result of vegetables, fruit
      and other labor intensive imports from Mexico, in some particular
      commodities, U.S. agribusinesses' dumping of corn and other grains put
      Mexican peasant farmers at a devastating disadvantage. The Secretary of
      Mexico's Senate Agriculture Commission, Salvador Becerra Rodriguez, speaking
      at the 2000 "Strategies for Change in Mexican Agriculture Seminar," reported
      that NAFTA has been hurting Mexico's agriculture sectors, particularly
      cereals such as corn, oil producing seeds and beef and pork.(85)

      Canada: In contrast, in Canada, agricultural exports grew and the Canadian
      agriculture trade surplus have grown since NAFTA was enacted. However, farm
      incomes in Canada have declined and farm debt has risen sharply. Canada's
      world agriculture trade surplus nearly doubled from C$2.9 billion in 1993 to
      C$5.7 billion in 2000.(86) Canada's NAFTA agriculture trade surplus grew
      even faster. Between 1993 and 1999, Canada's NAFTA agriculture trade surplus
      more than tripled -- from C$1 billion to C$3.2 billion.(87) Canada's
      agriculture surplus with the U.S. more than tripled between 1993 and 1999
      --from C$950 million to C$3.1 billion -- and its agricultural surplus with
      Mexico more than doubled from C$62 million to C$129 million over the same
      period. However, The Canadian National Farmers Union reports that replacing
      consumption of domestically grown food with imported agricultural products
      has subjected Canadian farmers to the low-prices and high volatility of
      export markets, even if the net agricultural trade balance remains positive
      and grows.(88)

      Indeed, under NAFTA, Canada's total net farm income declined
      by 17.6%, from C$3.6 billion in 1993 to C$3.0 billion in 1999.(89) Although
      total Canadian farm debt remained steady between 1991 and 1993 at about
      C$23.4 billion each year, under NAFTA Canadian farm debt increased by 53.0%
      to C$35.8 billion in 1999.(90)

      Agriculture Prices and Farm Incomes Have Collapsed Since NAFTA

      At the same time that U.S. agricultural trade surpluses with NAFTA partners
      dwindled to ever smaller surpluses and even deficits for two of the
      post-NAFTA years, prices paid to farmers for agriculture commodities
      collapsed while some key production costs, such as energy, rose.
      Multinational agribusinesses were positioned uniquely to take advantage of
      trade rules that force countries to accept agricultural imports regardless
      of their domestic supplies. The companies utilized their foreign holdings as
      export platforms to sell imported agricultural goods in the U.S., and by
      thus increasing supply, put negative pressures on U.S. agriculture prices.

      U.S. farm incomes then also declined rapidly. The predictable result has
      been that independent farmers are losing their farms. During NAFTA's first
      seven years, the number of small farms in the U.S. with annual sales under
      $100,000 fell by nearly 33,000, or 1.8%.(91)
      Moreover, the decline in these small farms was six times steeper than the
      five-year period before NAFTA (1989 and 1993).(92) A 1999 Economic Policy
      Institute report found that free trade policies such as NAFTA and the WTO
      led to a decline in the number of independent family farms because these
      agreements put into place national reliance on an export-growth agriculture
      strategy which had farmers competing to cross trade internationally the very
      crops that otherwise would be consumed at home.(93)

      Declining Commodity Prices

      Cereal Grains: Between 1995 and 2000, the bushel price U.S. farmers received
      declined 33% for corn, 42% for wheat, 34% for soybeans and 42% for rice.(94)
      According to U.S. ITC, the value of U.S. cereal and grain exports declined
      by 31% between 1995 and 1999 and the share of production going to exports
      fell by 17%.(95)

      Oilseeds: The value of U.S. oilseed exports declined 16% and the share of
      production going to exports fell by 15% between 1995 and 1999.

      Tropical Fruits: The value of exports of U.S. tropical fruit such as
      pineapples, avocados and mangos fell 16% and the share of production going
      to exports fell 40%.

      Citrus: The value of citrus exports fell by a third and the share of
      production being exports declined by 37% between 1995 and 1999.

      Poultry: The value of poultry exports has declined 13% between 1995 and
      1999, and the share of poultry exports has fallen by 26%.(96)

      The U.S. International Trade Commission (U.S. ITC) reports that awareness of
      the NAFTA model's damage in some sectors, such as vegetables, is better
      known than declines in dairy, poultry and beef. The fresh, chilled and
      frozen vegetables industry has lost 14% of its establishments and 11% of its
      workers between 1995 and 1999 between 1995 and 1999. During the same period,
      the fresh fruit sector lost 8% of its establishments and 4% of its jobs, and
      the dairy sector lost 9% of its establishments and 6% of its jobs, and the
      poultry industry lost 4% of its establishments and 8% of the jobs.(97)

      Moreover, U.S. farm income is significantly below total agriculture income
      before NAFTA went into effect and is projected to decline in the first years
      of the new century. In the U.S., farm income is projected to decline 9%
      between 2000 and 2001 -- from $45.4 billion to $41.3 billion in 2001.(98)
      This compares to annual farm income of $59.0 billion before NAFTA went into
      effect in 1993 -- a 43% drop compared to the projected 2001 farm income by
      the Farm and Agriculture Policy Research Institute (FAPRI).(99) In 1998, the
      latest FAPRI 2001 survey of actual-versus-projected-data, found that U.S.
      net agriculture income stood at $59.1 billion.(100) Over the next decade,
      the USDA has projected that net farm income will fall from $42.3 billion in
      2000 to $40.4 billion in 2010.(101)

      The gross farm income for commodity growers in the U.S. is projected to be
      significantly lower in 2000 than the average gross farm incomes between 1990
      and 1995. Even without factoring in the expanded imports to the U.S. that an
      FTAA would bring according to the USDA, inflation-adjusted gross farm income
      per acre for rice is projected to fall from the 1990-1995 average of $725 to
      $656 in 2000, a 9.5% decline.(102) Over the same periods, gross incomes per
      acre for cotton is projected to fall 23.4%, 16.0% for corn, 15.9% for
      soybeans and 15.7% for wheat.(103)

      According to the FAPRI 2001 survey of representative farms, the next five
      years will be tough financially on most farmers. Contrary to the farm
      economy boom promised at the time of NAFTA and WTO's passage, the study
      found that 76% of farms are projected to have a negative cash flow between
      2000 and 2005 even without added FTAA imports.(104) With the exception of
      cattle and hog farms, the majority of the representative farms are projected
      to be in poor financial condition by 2005, including 86% of feed grain
      farms, 78% of cotton farms, 75% of rice farms, 60% of wheat farms and 54% of
      dairy farms.(105)

      Ironically, the proposed FTAA NAFTA expansion would put the cattle sector in
      a similar position. FTAA nations Brazil, Argentina and
      Uruguay are major low-priced beef exporters. For example, although the
      average price per pound of beef imported into the U.S. was $1.07 in 2000,
      beef from Brazil cost 97c per pound and had declined by 22% since 1993
      compared to the 3.5% decline in average beef import prices.(106)

      Canada: Dropping prices meant that in Canada, farmers' net incomes declined
      19% between 1989 and 1999 although Canadian agricultural exports doubled
      during that period.(107) In 1998, the average profitability of Canadian
      farms, measured by return on equity, was only 0.3%, but the return on equity
      for the cereal companies buying and using Canada's commodities such as
      Kellogg's, Quaker Oats and General Mills was 56%, 156% and 222%
      respectively.(108) Average net farm income in Canada in 1999 was $9,732, or
      about half the average farm incomes in the 1980s, adjusted for
      inflation.(109)

      Meanwhile, although Canadian pork production and exports have risen since
      NAFTA, the producers' price per pound dropped from just
      over C$1.50 in 1993 to C$1.19 in 1998 (about a 20% decline) and the
      concentration of ownership of pork processing plants has resulted in 40%
      wage cuts for workers at the plants.(110)

      Mexico: In Mexico, real inflation adjusted prices paid to farmers for
      agricultural goods declined as the share of imported agriculture grew.
      Between 1993 and 1998, the real price paid to farmers for corn fell by 46%,
      the price of wheat declined by 32%, and the price of beans decreased by
      51%.(111) Crashing commodity prices caused by the flood of imports plus the
      elimination of domestic farm programs though NAFTA and the structural
      adjustment policies of the 1980s have resulted in large increases in Mexican
      rural poverty rates. About 81% of the rural population in Mexico live in
      poverty, a 15% increase since 1984. (Mexico joined the WTO's predecessor,
      the General Agreement on Tariffs and Trade (GATT) in 1986 which required
      significantly deregulation of agriculture policies.) Extreme poverty has
      grown 23% since 1984 to consume 55.3% of Mexico's rural population in 1999.

      The gap between the poor and wealthy has risen in Mexico since NAFTA's
      inception in 1994, but the intensity of the poverty is worse in rural
      Mexico, where more than a quarter of the nation's poor live.(112)

      Yet while the prices that grain trading companies and mills paid to farmers
      in all three NAFTA countries plummeted, the flood of imported agriculture
      goods did not translate into lower consumer prices. Indeed, the U.S.
      consumer price index for food eaten at home rose by nearly 20% between 1993
      and 2000.(113)

      Meanwhile, as family farmers in all three NAFTA countries have been facing
      significant economic hardships since NAFTA and consumers have faced rising
      food prices, profits for many agribusiness and food companies rose sharply
      between 1993 and 2000. Archer Daniels Midland's profits nearly tripled from
      $110 million in 1993 to $301 million in 2000.(114) ConAgra's profits grew
      from $143 million in 1993 to $413 million in 2000.(115) Quaker Oats' profits
      nearly doubled from $182 million in 1993 to $361 million in 2000.(116)
      Kellogg's profits surged nearly nine-fold between 1993 and 2000 -- from $66
      million to $588 million.(117)

      NAFTA Has Been Used to Justify Shredding Farm Safety Nets

      The increasing supplies of imported agricultural products and crashing
      prices paid to farmers have had a particularly severe impact because the
      policy mechanism designed to temper such extreme swings had been eliminated.
      Using NAFTA as a sales pitch and equally as the political instrument to
      force policy change, interests in Washington, Mexico City and Ottawa set
      about to eliminate domestic farm programs aimed at stabilizing the growers
      situation vis a vis market forces. The deregulation theory held that with
      increasing exports, the safeguards that protected independent farmers and
      plentifulness of the food supply were no longer needed.

      To implement that theory, agribusiness interests pushed the approval of
      NAFTA and its implementing legislation, which contained the changes to U.S.
      domestic farm policy required to conform with NAFTA's rules. Meanwhile,
      these interests pursued the same agenda with the Freedom to Farm Act, which
      also phased out U.S. domestic farm policies such as subsidies, price
      supports and loan guarantees. Proponents of the legislation contended it
      would make farming more efficient and responsive to market forces; in
      reality, it essentially handed the production of food to agribusiness, but
      made it extremely difficult for any but large, well-financed agribusinesses
      to survive. Ironically, to counteract the predictable failure of NAFTA and
      the similar farm deregulation policies embodied in the Freedom to Farm Act,
      Congress has had to appropriate emergency farm supports -- in massive farm
      bailout bills -- every year since the legislation went into effect.

      Worse, while these emergency payments were represented as necessary to save
      small, independent farmers, the overwhelming majority of them have gone to
      the biggest farm operators. Despite the new "free market" approach embo<br/><br/>(Message over 64 KB, truncated)
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