As noted in this space many times in the past — and again just last week — foreign trade is a complicated subject.
On one hand, it’s easy to demonize not only our overseas trading partners as job stealers, and condemn American politicians for being complicit in the off-shoring of large segments of manufacturing sectors. Hopefully, the more the topic is discussed, the more the public will begin to understand that the low-skill jobs hat used to provide so-called blue collar workers with employment have been getting phased out everywhere.
It's not a U.S. problem. The loss of manufacturing jobs has affected every developed, Western nation, and to be brutally honest, those jobs are never coming back.
No matter who gets elected to political office, the emergence of automation, robotics and computer-controlled production systems has changed forever the manufacturing landscape. What’s more, the jobs of the future will require mid- and high-level skills, a familiarity with technology and a level of education and training that precludes high school graduates from obtaining gainful employment — no matter what happens in Washington, D.C.
Here’s the other aspect of global trade that the public utterly fails to recognize: Without trade, American agriculture would be devastated.
Have you ever heard a prominent politician ever mention that fact? Did any of the endless rhetoric at both the Republican and Democratic national conventions involve even a few seconds discussing why global trade is essential for our national food security? And by the way, the corollary to that statement is an explanation of the benefits of federal funding devoted to crop science and ag-related research to improve livestock and farm productivity.
A bigger challenge
Despite the public’s aversion, or perhaps indifference, to understand the complexities of trade concerns, there is now an opportunity to place that issue onto the national agenda. President Trump’s proposed federal budget calls for severe cuts to USDA programming, and the impact could affect Americans where it hurts: at the grocery store checkout line.
Here’s how one agricultural trade group positioned their response to the pending budget cuts:
“U.S. Wheat Associates is very disappointed that the Administration’s proposed FY 2018 budget eliminates funding for the USDA’s Foreign Agricultural Service Market Access Program (MAP) and Foreign Market Development (FMD) program and severely cuts funding for food aid programs. These cuts and other proposed cuts to the farm safety net would be devastating to wheat farmers who are already facing severely challenging economic conditions.”
Okay, so far, that’s sounds like the typical self-serving statement every trade group issues when legislation or regulatory changes are poised to create conditions that negatively impact an industry. But let’s not stop there. Here is how the group referenced two other issues that connect more directly with consumer concerns.
First the notion of return on investment. People generally suspect that government spending is wasteful. We collectively throw money at problems of specific economic sectors, but what do taxpayers get back for all that spending?
The U.S. Wheat Associates’ news release noted that a major 2016 study led by Texas A&M University agricultural economists showed that eliminating the two programs mentioned above would trigger annual average losses of $14.7 billion in export value. Obviously, that would hurt almost every farmer in the entire country.
Cut millions from USDA’s budget to kill export promotion programs, and lose multi-billions in economic benefit.
I don’t care what political persuasion anyone embraces, that’s a terrible economic trade-off.
“It is very short-sighted to cut out programs that are vital to the health of the entire U.S. agricultural economy,” Jason Scott, USW chairman and a wheat farmer from Easton, Md. (there are wheat farmers in Maryland?) was quoted in the release. “Farmers, livestock producers, small businesses and the U.S. government have seen an amazing return on the investment in these highly successful programs.”
Now, here’s the challenge. Unless someone is determined to remain willfully ignorant, the ROI argument makes economic sense: Spend millions, get billions back in return.
That’s great for U.S. agriculture and the millions of farmers and ranchers who produce the commodities we export overseas. But what about “ordinary,” middle-class urban residents worrying about paying the bills and concerned that every time they look at their supermarket receipt, they seem to be spending more and more on their groceries?
How does USDA’s investment in such obscure federal initiatives as the Market Access Program and the Foreign Market Development program impact food prices? That is what’s missing from the messaging.
Unfortunately, people just don’t care about programs that support an industry in which they’re not employed. To quote the current meme, “Sad!”
What consumers do care about, however, are their grocery bills. As strong and persuasive as U.S. Wheat Associates and other ag groups’ response to USDA budget cuts might be, unless the bigger picture of how sustaining American agriculture impacts jobs and food prices, the ag industry’s positioning is easy to dismiss.
This is a wonderful opportunity for every farm and commodity organization to connect the dots and engage the public.
Failure to seize the moment would be a disaster far worse than any USDA budget cuts.
Editor’s Note: The opinions in this commentary are those of Dan Murphy, a veteran journalist and commentator.