Comprehensive Analysis of NAFTA's 7-year Record
Documents Bitter Harvest of Broke Farmers
And Higher Consumer Food Prices
Leaders Point to New Report's Findings to Highlight Causes
Of Growing Rural Opposition to Fast Track and Efforts to Expand
by Public Citizen
D.C. - Farm incomes plummeted and bankruptcies escalated in the
U.S., Canada and Mexico - while U.S. food prices increased 20
percent - during the first seven years of the North American Free
Trade Agreement (NAFTA,) according to a new study issued Tuesday
by Public Citizen's Global Trade Watch.
study found that contrary to promises and predictions at the time
of NAFTA's 1993 passage, North America's farmers and consumers
have not benefited from the pact - but many large agribusinesses
have seen record profits during the period.
conservative Democratic Congressman from a farm district in Minnesota
and U.S. farm organization leaders joined Public Citizen today
for the release of the new report: "Down on the Farm: NAFTA's
Seven-Years War on Farmers and Ranchers in the U.S., Canada and
Mexico." The 70-page study is the most comprehensive review
of NAFTA's agricultural outcomes. It comes as President Bush launches
an effort to persuade Congress to provide to him a broad delegation
of Congress' constitutional trade authority through a procedure
called Fast Track. Bush seeks Fast Track authority to expand NAFTA
to an additional 31 nations through a proposed agreement called
the Free Trade Area of the Americas (FTAA). The study provides
a substantive context for the escalating political opposition
to Fast Track and NAFTA expansion in the agricultural sector.
Friday, House Agriculture Committee Chair Larry Combest (R-Texas)
withdrew his co-sponsorship of the GOP's Fast Track bill after
the Bush administration listed as potential trade irritants some
of the U.S. farm bailout payments used to counter falling commodity
prices and the declining U.S. agriculture trade balance.
the past year, we noticed that wheat, soy, beef and other producers
who had been a base of support for trade deals really starting
to complain about how badly things were going since NAFTA,"
said Lori Wallach, director of Public Citizen's Global Trade Watch.
"We understand why farmer are so upset, because nearly every
U.S. commodity has faced a flood of new NAFTA imports swamping
modest export gains, and prices have tanked."
debate over NAFTA, farmers were promised that new export opportunities
to Canada and Mexico would stabilize and reinvigorate the economics
of farm life. The reality has been quite different. Independent
farmers have seen commodity prices plummet and critical domestic
safety nets dismantled in the name of implementing NAFTA and other
export-oriented farm policies. For the past seven years, wheat
farmers in the Midwestern and Plains states; ranchers in Montana,
Texas and other states; flower and fruit growers in California;
lumber mill and timber workers in Louisiana, Arkansas and Washington;
vegetable growers in Florida and California; chicken farmers nationwide;
and others have suffered declining farm income while a flood of
NAFTA imports outpaced U.S. exports to Canada and Mexico.
it was not farmers in Mexico or Canada who benefited from the
woes of U.S. farmers. Up to 15 million campesinos (peasant farmers)
throughout Mexico have lost a significant source of income and
are threatened with losing their small corn farms.
the report's findings:
* During NAFTA, the rate of elimination of small U.S. farms with
sales under $100,000 was six times greater than in the preceding
* U.S. farm income is projected to decline 9 percent between 2000
and 2001 - from $45.4 billion to $41.3 billion - compared to annual
farm income of $59 billion before NAFTA.
* While the U.S. agricultural trade surplus with Canada and Mexico
grew by $203 million between 1991 and 1994, it fell by $1.5 billion
* Instead of reaping special trade advantages with Mexico and
Canada, under seven years of NAFTA, the U.S. agriculture trade
balance with the NAFTA countries declined more rapidly - 71 percent
- than the U.S.-world agriculture trade surplus, which suffered
a 29.6 percent decline.
* Promises of new NAFTA export markets for U.S. farm products
have proved to be as elusive as NAFTA proponents' promises of
new U.S. manufacturing jobs created by exports to Mexico. Between
the 1994-95 growing season and the 1999-2000 season:
U.S. corn export volume fell by 11 percent and prices fell by
the volume of wheat exports declined by 8 percent and prices dropped
the volume of cotton exports fell by 28 percent and prices plunged
during the same period, even though the volume of soybean exports
increased 16 percent, the total U.S. soybean crop value still
declined by 2 percent because the per-bushel price fell by 15
* In Canada, falling commodity prices meant that net farm incomes
declined 19 percent between 1989 and 1999, even though Canadian
farm exports doubled.
* In Mexico, crashing commodity prices caused by a flood of imports
and the elimination of domestic farm programs have resulted in
a massive transfer of land from small farmers to large multinational
* Meanwhile, as farmers and consumers suffered, some giant agribusiness
and food companies made out like bandits, according to the report.
During NAFTA's seven years, Archer Daniels Midland's profits nearly
tripled - from $110 million to $301 million and ConAgra's profits
grew from $143 million to $413 million.
the track record of the NAFTA model for farmers and consumers
in the three NAFTA countries, it is not surprising that farmers
nationwide are increasingly opposed to the notion of expanding
NAFTA through the proposed Free Trade Area of the Americas,"
said Public Citizen President Joan Claybrook. "As bad as
NAFTA's seven years has been in the United States, the results
for poverty-stricken Mexican farmers and consumers is horrific
and puts to rest that myth that these trade deals benefit people
in developing countries."
Citizen is a consumer advocacy group with 150,000 members nationwide.
report can be read on the Web at http://www.TradeWatch.org
more information about Public Citizen, please visit http://www.Citizen.org