Maintaining Our Edge in the World Market
American Farm Bureau
President, American Farm Bureau
It was Benjamin Franklin who said that no nation was ever ruined by trade. I would go one step further and say that no nation was ever economically viable without it.
Trade has always been a cornerstone of our country. The U.S. is considered a major epicenter of the global marketplace and, because of this, trade is a big economic driver for our domestic workforce. Farm exports are significant to America’s status as a world trade leader, as well as local jobs, but many opportunities are being left on the table because of a lack of funding for waterways infrastructure upgrades and costly regulations.
Earlier this fall, a group of AFBF board members visited the West Coast and Canada to examine the impact of barriers to agricultural trade. They observed several intertwined issues that affect farmers’ abilities to export their goods to global customers, but most notable was port infrastructure.
Port Investment = Jobs
Sadly, U.S. ports and waterways are decades behind our international competitors due to years of neglect and a lack of funding. Only about half of the Harbor Maintenance Trust Fund, which funds the operation and maintenance of ports, is being allocated toward port infrastructure, and the Water Resources Reform and Development Act (WRRDA), seems to be permanently docked in Congress.
While U.S. ports on average were last updated around the same time the Beatles cut their first album, our international competitors are continually investing in their trading future. The Port of Vancouver, for example, is undergoing a nearly $900 million infrastructure improvement program that will be completed next spring.
While on the West Coast, the AFBF leaders saw how critical the ports are for farm products and local jobs. For example, Washington is the nation’s most trade-dependent state, where trade is responsible for 40 percent of all jobs. Agriculture products are Washington’s third-largest export. In Oregon, one in five jobs depends on trade of farm products, accounting for 10 percent of Oregon’s gross domestic product.
Further, the Port of Oakland supports 73,000 local jobs and 827,000 jobs across the country. Last year, nearly half the value of exports leaving the Oakland port were farm products. East Coast ports, too, are just as critical to farm exports and are in dire need of improvements.
Rails, Regs and Red Tape
There are other issues that affect global exports, such as state efforts to prevent coal transport and export, which could affect rail investment and potentially raise transportation costs to all rail customers, including farmers. Rails play a significant role in trade. For example, 40 percent of all activity around the Seattle port is tied to rail, making its infrastructure maintenance essential.
Another growing challenge for ports, shippers and farmers is the cost of keeping pace with the loading and handling requirements for larger vessels that shippers are using, along with federal regulations for exporters. In other words, a lot of red tape.
The U.S. wine industry is faced with such strict export rules and regulations that it takes a month on average from the time an international order is placed until it leaves the U.S., making us the smallest exporter of wine by percentage in the world.
To maintain our edge in the global market, we need to invest more in our ports and waterways infrastructure, as well as alleviate prohibitive regulations that are forcing farmers to leave opportunities on the table.