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Texas Agriculture Archive

January 3, 2003

AgLead Class V gets a global view of agriculture

Second of two parts

By Mike Barnett
Editor

The young Texans stare in wonder as they walk down aisle after aisle, building after building, acre after acre of booths promoting meat, fruits and vegetables, specialty foods, beers and wines—you name it someone's trying to sell it—at Salon International de l'Alimentation (SIAL) 2002 in Paris, France. Most every country from every corner of the earth is represented here, trying to bite off a piece of the huge consumer pie known as the European Union.

As the 10 members of AgLead V—Texas Farm Bureau's leadership development program—walk up to the U.S. Meat Export Federation booth, however, they hear a tired repeat of what's been going on for years: U.S. beef—for the most part—is not allowed in the EU and prospects are dim that things will change in the near future.

It's all a part of the trade game, said Monty Brown, an English native who consults with the meat promotion group.

"It's not a hormone issue," the USMEF representative said. "It's not a consumer thing. It's obviously protectionism."

"Most people around the world, if they can do something to disrupt America, they will," Brown continued. "We'll see the same thing happening with poultry next year in Russia. It's not to stop trade, it's to play the game."

Play the game, indeed. The AgLead group found that the Europeans are very good, having scored touchdown after touchdown, year after year, shutting out U.S. beef, continuing to throw roadblocks up to American produced genetically modified grains, and heavily subsidizing European farmers.

Hormones and GMOs

Privately, both French and German farmers said they would welcome hormones and GMOs's into their own herds and crops.

"It's political," German surgarbeet farmer Jan Kirch frankly admits. "The customer says they don't want beef with hormones. They prefer biological. But they go to the supermarket and buy the cheapest. They buy the cheapest because they know it's safe. Government is not giving the consumer the choice."

Kurt Seifarth, an ag attache for the U.S. Embassy in Paris, agrees: "It's almost become a dull argument. It's business practices. It's a global conspiracy in part—anything they can do to impede market entry, they're capable of doing it."

The American position, Seifarth said, is to let the European consumer make the choice. He cited the example of a GMO-labeled cooking oil marketed in the Netherlands, that was priced cheaper than competing oils: "It walked off the shelf."

"Under free and fair trade, our products should be let in," he added. "If there's a market, they will stay. If not, exports will cease. The problem is, the consumer does not have that choice. We've gone to the highest court on the globe. We won, and still, here we are."

But the EU farmers, politicians and bureaucrats will all chant the same mantra in defense of the EU hormone and GMO bans: "We have to hear what the consumer wants."

There is some reason for concern on the consumer part. Americans have fairly high confidence in the safety of their food. The same doesn't hold true for Europeans. They've gone through "mad cow" and dioxin scares and the EU and individual European governments are reacting to consumer opinion.

Labeling

That consumer opinion is driving policy in Brussels, capital of the European Union, that centers on labeling and traceability.

"The ultimate goal is to have all food in the food chain be okay for food and feed," said Almudena Rodriguez, who explained new biotech regulations that were just recently passed and drew fire from the American Farm Bureau Federation and others. "We want all products labeled...both GMO and non-GMO. Basically the proposal is to have a system in operation that proclaims if a product is GMO or GMO-derived, who is selling the product and who is buying the product."

Monty Brown, the USMEF representative, said American producers, like it or not, better get used to the idea of labeling and traceability.

Using France as an example, he said eartags are issued to individual calves two days after the calf is born. The AgLead group met a Charolais breeder in France, Michel Cadeau, who can trace individual animals from the farm to the meat case.

"You're not close to solving traceability in the United States, and that's something you need to solve," Brown said. "If Wal-Mart came in and said they had to have traceability, U.S. producers would do it. Japan, other markets will eventually kick the U.S. out without traceability. It's a big consumer issue. And the politicians use traceability to shut imports down."

Advised a government official with the German Federal Ministry of Consumer Protection, Food and Agriculture in Bonn: "The worst thing you could do is give the impression that you're going to force something on people that they don't want. Label it. Be more open minded. That would help in the political discussion. Politicians want to be reelected and that's what it's all about."

Subsidies

And then there's the subsidy issue. Standard thought in the U.S. is that EU farmers are heavily subsidized.

That's true to some extent, but the AgLead group found European farms to be much smaller than American farms, and that there are more EU farmers than American farmers.

Explaining the sugar subsidy, a refinery official said German sugarbeet farmers work on the basis of yearly contracts that price the sugar higher that the world market will bear.

"Even Australia can produce it cheaper," he said. "In Europe, sugar is the main product. You would kill half the farmers in Germany if you took away the sugarbeet."

Good farmland continues to draw a high demand.

"There is very, very steep competition between farmers," said an official with the German agricultural coop, Warenzentrale Norvenich. "Rent—what farmers are willing to pay for land is getting high, up to 750 Euros per acre. The prices farmers receive is not normal."

French farmers complain that much of the subsidy they do receive goes to pay "social taxes," much like American Social Security.

"Social taxes take up 43 percent of real net income," said Phillippe Dion, vice chairman of the Chamber of Agriculture and chairman of the Normandy Agricultural Trade Union. "Most farmers pay no income taxes. They make less than minimum wage. More prosperous farmers pay varied taxes depending on their income."

Both German and French farmers, however, are worried about the entry of 10 Eastern European countries into the EU. There is already tremendous pressure to reduce farm subsidies on the European continent. They fear subsidies will shrink or stay the same, and will have to be shared with Eastern European farmers.

"The EU will have to subsidize the 10 Eastern European countries," the German ag coop official said. "You look at our farmers. One, two, three. Number three will be gone."

One young Normandy farmer shared those worries. More than 50 percent of the Eastern European farmland is very productive, he said.

"At the same time, the gross national product of these 10 countries is the same as the single GNP of the Netherlands," he added. "Support levels for these farmers are going to be a big problem. And where are they going to go with their commodities?"

To Bill White, an AgLead participant from Friona, the EU subsidy system was somewhat of a puzzle.

"In general, say on a bushel by bushel basis (on wheat), it seems as if we're not that far apart," he says. "Yes, they're subsidized a little bit more, but you're dealing more with a way of life here. We're talking about an industry that's been here for hundreds and hundreds of years. They're very proud of that and they're going to protect it."

McGregor farmer and AgLead participant Kevin Huffman agreed: "It's hard to get a comparison on how much subsidy they receive versus us, though it seems there's more dollars per European farmer issued and per individual acre, as there would be in Texas."

But Huffman, along with many of his fellow AgLead members, confessed an attitude change after this eight-day trip.

"European countries are not going to purchase our products," he said emphatically. "It's pure protectionism and they will be taking care of themselves. They have quotas on milk, they have quotas on sugar beets. They make sure they grow enough for themselves and dump the rest on the world market."

"We would like the European consumer to have a choice," he concluded. "And the consumer is not going to get that choice."

AgLead member Jeff Camp looks over the Swift and Company display at the SIAL Food Show in Paris.

(left to right) AgLead members Mark McCormick of Floydada, Gerard Hajovsky of LaGrange, Kevin Huffman of McGregor and Joe Rohrbach of Hereford learn about German dairy production at the Markus Schmitz farm.