World Grain | 26 February 2018
Cargill executive stresses importance of NAFTA, TPP to US agriculture
by Susan Reidy
The world is fed on trade and the United States must secure its place at the table with fair and sound trade policies, most notably NAFTA and the Trans-Pacific Partnership (TPP), said a Cargill executive during the U.S. Department of Agriculture’s 94th Annual Agricultural Outlook Forum.
“Today we have 1 billion people all around the world who rely on trade to feed itself,” said Joe Stone, Cargill corporate vice-president and director on Feb. 22. “The world depends on us for food, and we need to do everything in our power to manage these risks, to ensure the continuation of the progress we’ve established and long enjoyed.”
Part of that is modernizing NAFTA, which could bring the U.S. agriculture industry even more benefits, he said. However, it’s important to maintain what’s made the trade policy work the last 24 years.
NAFTA has created one of the strongest economic zones anywhere in the world, said Stone. Mexico and Canada are consistently two of the top three destinations for U.S. agriculture products, and Mexico is the largest destination for U.S. meat. All of these exports help to support 15 million jobs in the United States, he said.
“But, of course, nothing is perfect, and anything that is 24 years old needs to be assessed through the lens of today’s world,” Stone said. “At Cargill, we’re really optimistic that an updated NAFTA could build on these gains and could make it even better by expanding overall market access for all agricultural goods. We can make it even better by reducing barriers, by harmonizing some of the food safety standards across our borders, simplifying customs procedures and then finally by strengthening some of the dispute resolutions.”
Stone also said he is hopeful the U.S. will join the TPP, a pact now supported by 11 nations that seeks to lower barriers to trade in goods and services among those nations. U.S. President Donald Trump withdrew the United States from the TPP in January 2017.
Many of the TPP nations are on the verge of increasing the amount of protein and diversity in their diets. One analysis showed those 11 countries represent a $62 billion market for U.S. agriculture products, and could add $4.4 billion to U.S. farm income, a 7% increase, Stone said.
“The U.S. has led every step forward in trade liberalization since World War II, we must not cede that leadership role to other countries,” he said. “We also agree that no nation wants to be taken advantage of. We have to have agreements that are fair and we have to have a strong rule-based system that includes critical enforcement tools.
“Let’s rally as an industry around these productive trade agreements for U.S. agriculture, and that will ensure that our country continues to lead with prosperity for generations to come.”
It’s not enough to have trade agreements in place, Stone said, product also has to move efficiently, which is why improvements to the stressed infrastructure system are critical. Inland waterways are struggling, the lock and dam system is aging, seaports aren’t deep enough to handle capesize vessels and railroads are facing capacity constraints while bridges and roads are crumbling, he said.
“These are really bottlenecks to our prosperity,” he said. “What’s the value in producing good products, seeking access for them all around the world, only to have them stopped by infrastructure that can’t carry them forward.”
Cargill has seen firsthand the impact of failing infrastructure at a beef facility in Pennsylvania. Truck traffic had to be routed, at the cost of several hundreds of thousands of dollars, due to new weight limits on a deteriorating bridge near the facility. With no money for repairs, the Department of Transportation implemented extreme weight limits, Stone said.
“Our infrastructure is under very real stress and it requires major investment to keep it strong for tomorrow; we can’t delay, we’ve got to act now,” he said. “The dollars we invest today will pay off 10-fold across the generations.”
Stone also addressed the importance of technology in agriculture, calling farmers the chief technology officers of their operations. He said farmers have the ability to adopt and adapt to the best new ideas from data analytics to block chain.
“These will help farmers optimize their operations, manage price risk and tell the consumer about the food they want to hear more and more about,” Stone said. “We believe in the notion that transparency builds trust. The simple act of sharing information can be completely transformative.”
Cargill has invested in analytics platforms to help dairy farmers run their operations from iPhones. It also helped shrimp farmers reduce feed waste and used facial recognition technology to optimize nutrition, health and performance for individual dairy cows.
Overall, Stone said there’s a lot of work to be done, but agriculture is well equipped to take it on. He said Cargill has become more vocal in the last few years, and is standing up for U.S. agriculture, farmers and ranchers.
“Today my message is basically this: Everyone in this room represents U.S. agriculture in one form or another,” he said. “Let’s continue to work together to nourish the world, stand up for trade, infrastructure and technology. With the participation of all the different organizations in this room, I know we can do it.”