The 2007 Farm Bill Debate: Converging Domestic and International Policy Imperatives May 24, 2005 Hyatt Regency Washington on Capitol Hill Washington, DC

Specialty Crop Federal Policy/ U.S. Farm Policy Presented by Bob Schramm on behalf of Matt McInerney, Senior Vice President,

U.S. Farm Policy – Specialty Crops 50% – Represents 50% of Plant Agriculture

U.S. Farm Policy Comparison of Economic Values Specialty Crops and Program Crops CategorySpecialty Crops Program Crops Farmgate Value$52.3$53.9 Annual Subsidies$0.0$12.4 Farmgate Export Value$16.0$29.5 Value of Imports$26.3$5.2 FTA BenefitsNoYes Source: Economic Research Service and U.S. Foreign Agricultural Service, USDA

Specialty Crop Competitiveness Issues –Labor –Increased Regulations –Homeland Security –Environmental Requirements

Specialty Crop Competitiveness Issues –Poor Export Growth [FTAs] –Invasive Species [Globalization] –$123 billion cost per year (Cornell University) –Congressional Focus on Program Crops –Lack of Research Dollars –Agriculture Plant Health Inspection Service (APHIS)

Specialty Crop Solutions –Enactment of H.R (Specialty Crop Competitiveness Act) –Full Implementation and Funding –Specialty Crop Amendments Act of 2005 –Provide policy/resources to meet specialty crop grower needs –Specialty Crop Title of 2007 Farm Bill

Specialty Crop Solutions Doha Round –Stricter Adherence to Trade Promotion Authority –reduce tariffs to levels that are the same as, or lower than, those in the U.S. –Relief from Foreign Subsidy Impacts in U.S. and Foreign markets –reduce or eliminate subsidies that decrease market opportunities for U.S. exports or unfairly distort agriculture markets to the detriment of the U.S.

To Understand Future Specialty Crop Federal Objectives We Must Know Federal Shortcomings

Uruguay Round & Free Trade Agreements Promises and Effects

Uruguay Round Promises exports are to the income of our farmers “I don’t have to explain to this Committee how important exports are to the income of our farmers and to the U.S. economy as a whole.… We believe these provisions [SPS rules] will discourage countries from using unjustified health-related measures as disguised barriers…” Secretary Mike Espy, U.S. Department of Agriculture

Uruguay Round Promises “..we will be able to… open up the European market tremendously in the areas of specialty crops.” Ambassador Mickey Kantor, U.S. Trade Representative December 10, 1993

Uruguay Round Effects U.S. Trade in Fruits, Vegetables and Nuts YearImportsExportsBalance 1995$4,546,941,000$5,155,383,000$608,442, $5,277,013,000$5,362,865,000$85,852, $6,528,175,000$4,916,736,000($1,611,439,000) 2001$6,850,065,000$5,330,162,000($1,519,903,000) 2003$8,184,958,000$6,048,928,000($2,136,030,000) 2004$9,220,653,000$6,639,319,000($2,581,334,000) Note: Trade data above denotes chapters 7 and 8 of the Harmonized Tariff Schedule. Prepared by Schramm, Williams & Associates, Inc. using data from the U.S. Department of Commerce

Uruguay Round Effects U.S. Trade in Fruits, Vegetables and Nuts (Excluding Almonds) YearImportsExportsBalance 1995$4,546,941,000$5,105,074,000$558,133, $9,220,653,000$5,342,464,000($3,878,189,000) 203% Increase4.4 % Increase Note: Trade data above denotes chapters 7 and 8 of the Harmonized Tariff Schedule. Prepared by Schramm, Williams & Associates, Inc. using data from the U.S. Department of Commerce

FTA Fruit, Vegetable and Nut Trade Statistics Lack of Export Market Opportunities Note: FTA trade data above denotes chapters 7 and 8 of the Harmonized Tariff Schedule. Prepared by Schramm, Williams & Associates, Inc. using data from the U.S. Department of Commerce ImportsExportsBalance $3,051,726$272,715($2,779,011) Ratio of $1 Imports : 9¢ Exports

Conclusion

FY 2007 Convergence of Farm Bill & Doha Round

The 2007 Farm Bill Debate: Converging Domestic and International Policy Imperatives May 24, 2005 Hyatt Regency Washington on Capitol Hill Washington, DC