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The new year is going to be an interesting year for U.S. agriculture—maybe even a bit too interesting, an agricultural trade expert said at an issues conference of the 86th annual meeting of the American Farm Bureau Federation.
"This is going to be a very exciting, very challenging and maybe a very difficult year" for agriculture in the trade arena, said James Grueff, who was, until he retired a few days ago, a top official in the international trade policy division of the Foreign Agriculture Service.
Several factors are coming together to make this year so "exciting," Grueff said. One is the recent determination by the World Trade Organization that portions of the U.S. cotton program are not in compliance with the WTO agreement. The United States has appealed that finding, and a final ruling on the appeal is expected by March 3.
Since some of the programs in question—particularly loan deficiency payments and countercyclical payments—are virtually identical to those of other programs crops such as corn, rice and wheat, the possibility exists that a finding against the cotton program could focus attention on other programs.
"The concepts (used in all of the crop programs) are exactly the same," he said.
He added, though, that if the U.S. appeal fails, this doesn't necessarily mean that the programs for other crops are in trouble. Although all of the programs—corn, rice, wheat and so on—use the same formula to determine payments, the WTO would also look at how the programs have affected markets, and while U.S. corn, rice and other program crops command large markets, that "can't be tied to any subsidy," Grueff said.
A finding against the U.S. cotton program, therefore, "doesn't mean (the other crop programs) are in trouble, but it does make for a very interesting situation," he said.
Renewal of debate on trade promotion authority, or TPA, could also affect agriculture, Grueff said. Under TPA, Congress can accept or turn down a trade agreement negotiated by the administration, but it cannot alter the agreement in any way—the proposal passes or fails as negotiated by the administration. The current TPA will expire on July 1 unless renewal is blocked by Congress, and Grueff reminded the audience that TPA was previously approved by the House by just one vote.
While the situation has changed considerably, as both the House and Senate have Republican majorities, farmers should nonetheless expect another heated debate, he said.
