Market Access the Bottom Line for Area Farmers

Summary

---

Many Central Illinois farmers may feel a world apart when it comes to trade talks in exotic places like Hong Kong. But Robert Thompson knows farmers have a huge stake in the latest World Trade Organization negotiations.The talks, according to the Gardner Professor of Agriculture Policy at the University of Illinois, boil down to trade access. Thats vital for Illinois farmers who export about two-thirds of the food they produce.Thompson, an agricultural economist, attended the Hong Kong talks in December, where WTO delegates decided to eliminate export subsidies by 2013. The decision means United States food aid officials will have to draft new rules regarding how the nation assists developing and other countries.Delegates, however, tabled action on the market access issue until April. U.S. officials had promised to reduce domestic agricultural payments to farmers if the nation gained increased access to markets now blocked by a myriad of tariffs. WTO delegates will attempt to set specific tariff rates by the end of the year.Thompson remains convinced that trade liberalization is the key to faster economic growth for low-income countries which happen to also represent the highest market growth potential for the United States. But Thompson believes negotiations are focusing far too intensely on increased access to markets with no growth potential, such as Europe, Japan and Russia."It is projected that Europe will have 10 percent fewer people in the middle of this century than it has today. Japans and Russias populations will fall by 21 and 23 percent, respectively, in the same period, said Thompson. "These are the markets of the past, not the markets of the future.Projections for the highest population increases lie in low-income countries. However, Thompson cautioned against equating population with market demand."Only when low-income people gain purchasing power can their needs be translated into effective market demand, he noted.Of 6.3 billion people living today, 1.25 billion live on less than $1 per day. Three-quarters of those people cant afford to consume enough calories per day. Populations often outstrip arable land resources presenting another problem for many low-income countries, Thompson said. Furthermore, low-income countries often cannot sell abroad products for which they have a comparative advantage, such as sugar, rice and cotton because of import tariffs levied by other countries. So international trade, or improved market access, Thompson believes, can be more powerful in terms of economic growth than foreign aid to low-income countries. Seventy percent of the people living on less than $1 per day live in rural areas, and many are farmers. Thats where the trade negotiations hit home. Central Illinois growers enjoy a comparative advantage raising corn, wheat and soybeans. But unless poverty can be reduced through improved market access for low-income countries, those countries remain simply potential U.S. markets, Thompson explained.Corn leftovers prevent cancerA fungus contained in leftovers from the corn to ethanol fuel process may help prevent some cancers. Timothy Leathers, a geneticist at the National Center for Agricultural Utilization Research in Peoria, has found a way to mass produce lycopene, a pigment that makes tomatoes red and prevents certain cancers.Corn fiber left over from the ethanol process proves a perfect source of lycopene because its abundant and costs about 5 cents per pound. The ethanol industry generates 4 million tons of fiber annually. Its sold as livestock feed to avoid disposal fees. Pantagraph Farm Editor Chris Anderson writes about agriculture every Wednesday. Contact her at candersonyayaypantagraph..

CUTLINE:

See the full content of this document

Extract

---

Market Access the Bottom Line for Area Farmers

PUB:...

See the full content of this document

---