As Ag Exports Dominate, America’s Rural Communities Benefit
American agricultural exports have been a reliable bright spot in the U.S. economy, growing much faster over the past decade than manufacturing exports. Even as parts of the economy struggled in the aftermath of the Great Recession, American agriculture continued to thrive. For the U.S. economy as a whole, our agricultural exports support output, employment, income and purchasing power in both the farm and nonfarm sectors. The number of jobs that are supported by agricultural exports has been trending upward since the 1990s. And the United States’ ability to negotiate trade agreements with other large economies — such as South Korea, Peru, Mexico and Canada — has meant greater demand for U.S.-grown goods.
As we begin to look back at the success of U.S. agricultural exports since 2009, here are 10 reasons why U.S. ag trade has remained consistently positive:
1. American farmers are the most productive in the world, exporting nearly one-third of all farm and livestock products
2. The United States is the most food secure nation in the world thanks to the productivity and innovation of U.S. farmers and ranchers
3. Exports support more than 1 million American jobs in farming and ranching, as well as in transportation, processing, packaging and many more areas; roughly 80 percent of these jobs are in non-farm sectors
4. American agriculture has posted a net surplus (exports + imports) since records were established in the 1960s
5. Every $1 of agricultural exports stimulates another $1.27 in business activity; in 2014 when the United States exported a record $150.0 billion of agricultural exports, it produced an additional $190.6 billion in economic activity for a total economic output of $340.6 billion
6. The United States is one of the most open markets in the world, offering relatively-low tariffs for a variety of food and farm goods
7. The quality, affordability, safety and reliability of American agricultural products are well-known throughout the world
8. The USDA and other federal agencies work aggressively around the world to remove unfair barriers to trade, secure the release of U.S. shipments detained at ports and ensure the free-flow of goods per international standards
9. USDA offers credit, marketing assistance and help with connecting U.S. exporters with buyers in foreign nations, removing much of the guesswork from trade
10. Improved trade relations can help improve food security if a trade strategy is part of a larger economic development strategy, as we’ve seen with Peru, South Korea, Japan, Chile, Vietnam and other nations
As Secretary of Agriculture, I have traveled to all 50 states and seen firsthand how our producers keep Americans fed and clothed while contributing to the food security for nations across the globe. Since taking office, the Obama Administration has worked aggressively alongside our nation’s producers to build new markets and opportunities for American-made agricultural products by expanding trade, removing unfair, unscientific barriers and connecting with new customers and markets abroad.
In response, agriculture exports have grown to record high levels. In fact, the past seven years have represented the strongest period in history for American agriculture.
Thanks to USDA’s efforts, international sales of U.S. farm and food products totaled $911.4 billion between Fiscal Years 2009 and 2015. And even though commodity prices have softened over the past 18 months, export volume has remained consistently high, near record levels. The volume and value of agricultural exports support more than 1 million American jobs both on and off the farm each year, a significant part of the estimated 11.5 million jobs supported by exports all across the country. Between 2010 and 2015, median farm household income increased by 47 percent due in part to our farmers’ ability to remain competitive in a global market.
The gains we’ve seen in rural jobs and higher income have enabled more farming families to stay on the farm and have funneled more cash flow into rural economies. According to the Peterson Institute for International Economics, trade liberalization since WWII has led to U.S. incomes that are approximately nine percent higher than they would otherwise have been. That means by today’s standards, our long-term push to expand U.S. trade has added more than $10,000, on average, to every American family’s income, every year. Increased export opportunities abroad have also given way for diversification of products and agricultural practices while sparking new agricultural businesses and operators in rural communities. In fact, Census data indicate that small towns and rural areas grew in 2015 at the fastest pace since 2010.
However, as global populations grow, the United Nations estimates that worldwide demand for food will increase 60 percent by 2050. Some experts estimate it will take as much innovation in agriculture in the next 40 years as in the preceding 10,000 years to meet the growing demand for food. That’s why the Obama Administration launched Feed the Future in 2010, which rethinks how the U.S. can combat hunger and malnutrition, while supporting global agricultural development. Not only is USDA investing in cutting-edge research in an effort to strengthen agricultural production and nutrition, but we are also committed to open data and sharing between nations to ensure that our research and the research of our partners will contribute to efforts to feed the world.
Simply put, the agricultural sector has been a bright spot for the U.S. economy since 2009 while helping to ensure our ambitious goals of ending poverty and hunger are met. In the remaining months of this Administration, USDA will continue to focus on expanding foreign markets to help drive the health and resilience of rural America, and that includes passage of the critical Trans-Pacific Partnership trade deal.
Smart Policies are Growing Opportunities Abroad
Ninety-five percent of the world’s consumers live outside of our borders. That means our trade agreements open a world of opportunities for American businesses. Trade agreements are a driving force behind expanded U.S. exports, enabling U.S. companies to provide more and better paying jobs for Americans.
Since 2009, USDA has entered into free trade agreements with countries like Colombia, Jordan, Oman, Panama, Peru and South Korea, removing numerous restrictions to U.S. trade to help farmers export more to these countries.
Passing Trade Promotion Authority (TPA) in 2015 helped to secure a brighter future for American agriculture with new opportunities for rural businesses. TPA allows the U.S. to be a leader in achieving free trade agreements that have strong labor and environmental provisions that are actually enforceable, while allowing farmers and ranchers to reach millions of new customers and maintaining a level playing field for our workers.
American agricultural businesses thrive when they can operate in a secure business environment. Predictable, transparent and reliable international markets give our producers an even playing field to reach more customers and to compete on price and quality. In October 2015, the United States and 11 other nations concluded negotiations on the historic Trans-Pacific Partnership (TPP) trade agreement. The TPP agreement is a 21st-century, high standards trade agreement that benefits American workers, American businesses and the American economy. This agreement cuts more than 18,000 taxes various countries put on American products and puts in place historic labor and environmental standards to make sure our trading partners play by our rules.
So why do we need the TPP agreement now?
Because by 2030, the Asia-Pacific region will represent 66 percent of the world’s middle class. The TPP agreement balances the diverse marketing needs of American farmers and ranchers with the market access we’ll need to cater to a rapidly growing consumer base in the future. It positions our nation’s farmers and the high-quality products they produce as global leaders and gives them the opportunity to build a loyal customer base in a region where demand is projected to grow substantially.
No one is better positioned to meet that growing demand than the most productive farmers in the world, and with the TPP agreement, we have a strong business plan to get rural-made products into the hands of more consumers.
We know it will work because, despite current taxes and barriers that hold back U.S. products overseas, in 2015 our agricultural exports totaled over $11.2 billion to Japan, $2.4 billion to Vietnam and just under $1 billion to Malaysia. Even with the disadvantage our products face, countries in the TPP purchased 43 percent of all U.S. agricultural exports — that’s $63 billion.
And we’re not alone in thinking so. The American Farm Bureau Federation predicts that ratifying the TPP agreement will boost annual net farm income in the United States by $4.4 billion, compared to not approving the pact, according to their economic analysis. A recent study by the U.S. International Trade Commission showed that with the TPP in place, U.S. beef exports will increase by $876.1 million annually by 2032; U.S. poultry exports by $173.9 million; U.S. fruit, vegetable and nut exports by $574.9 million; and U.S. dairy exports by a whopping $1.845 billion. In the same time period, overall U.S. real income will increase by $57.3 billion. Sixty-six percent of GDP growth from TPP would go to American workers through increased wages and job opportunities.
Every day without a TPP agreement is a day we’re losing market share to our competitors and costing American farmers, ranchers and businesses millions in foreign taxes. The numbers show that delaying implementation of the agreement for even a single year would cost the U.S. economy a permanent loss of $94 billion.
Knocking Down Barriers to Trade
In addition to forging new relationships that open the doors to trade, USDA works on behalf of agricultural exporters to resolve trade issues related to animal and plant health concerns and to ensure that trade decisions are based on sound science. In 2015 alone, USDA resolved more than 150 trade-related issues involving U.S. agricultural exports valued at $2.4 billion.
Since January 2015, USDA has negotiated to eliminate BSE-related restrictions in 15 countries, gaining additional market access for U.S. beef in Colombia, Costa Rica, Egypt, Guatemala, Iraq, Lebanon, Macau, New Zealand, Peru, Philippines, Saint Lucia, Singapore, South Africa, Ukraine and Vietnam. In 2015, the total value of U.S. beef and beef product exports to these countries was in excess of $357 million.
And as producers faced the largest animal disease outbreak in U.S. history, USDA efforts enabled U.S. poultry producers to maintain 74 percent of their previous year’s export value in 2015 despite highly pathogenic avian influenza (HPAI) outbreaks on top of the closure of the Russian market. In the past, such outbreaks were much more harmful to U.S. farmers, but USDA was able to keep trade flowing by quickly putting forward sound science and international guidelines.
In 2015, USDA also expanded market access for U.S. apples in China from just two varieties to all U.S. grown-varieties. The estimated value of this market is $100 million.
And just this year, USDA successfully fought back South Africa’s sanitary barriers to exports of U.S. poultry, pork and beef in January 2016, regaining an export market valued at an estimated $75 million per year. In March of 2016, USDA also secured full market access for U.S. beef products in Peru, a market valued at $25.4 million in 2015, which is a nearly fourfold increase since enactment of the U.S.-Peru Trade Promotion Agreement in 2009.
Opening New Markets for Farmers, Ranchers and Rural Businesses
In the last year, I have had the distinct pleasure of making 2 historic trips to Cuba — the first marked the first official U.S. Department of Agriculture visit to Cuba since 1961. While there, it was clear to me that throughout history, agriculture has served as a bridge to foster cooperation between vastly different nations. Through agricultural trade and collaboration, we not only open opportunities for American entrepreneurs, but also build stronger trust and understanding across borders. Only 90 miles apart, Cuba and the United States are natural trading partners. That is why, after two visits, I continue to call on Congress to lift the U.S. trade embargo and free our producers and businesses to operate on a more level playing field.
USDA trade missions open doors and deliver results for U.S. exporters, giving them the opportunity to forge relationships with potential customers and trading partners, interact with host government officials and gather market knowledge to help them develop strategies to expand sales overseas. Since 2009, USDA has led 246 U.S. agribusinesses and 26 State Departments of Agriculture on agricultural trade missions to Chile, China, Colombia, the Dominican Republic, Georgia, Ghana, Indonesia, India, Iraq, Malaysia, Panama, Peru, the Philippines, Russia, South Africa, Turkey and Vietnam. These businesses reported on-the-spot and short- term follow-up sales of more than $94 million. That’s a number that will continue to grow exponentially over the next several years as a direct result of the partnerships forged and contacts established during these trade missions.
USDA’s Agricultural Marketing Service has successfully implemented equivalency agreements with several other nations that help both farmers and consumers benefit from international organic markets worth more than $35 billion. Through these agreements, U.S. organic farmers and businesses also have streamlined access to organic markets in countries like Canada, the European Union, Switzerland, Japan and South Korea, and U.S. consumers can continue to have confidence in the organic seal.
USDA’s Market Development Programs have also provided funding to help approximately 70 U.S. agricultural producer associations, each representing hundreds or thousands of producers, expand commercial export markets for their goods.
In 2015 alone, USDA’s efforts to highlight U.S. food and agricultural products at 23 domestic and international trade shows generated $421 million in on-site sales and $1.5 billion in projected 12-month sales for nearly 1,000 U.S. companies that exhibited more than 5,000 new products. USDA also opened international market outlets for American farmers and ranchers by successfully negotiating and issuing thousands of export certificates for food products valued at more than $800 million.
Addressing Global Food Security
When this Administration stepped into office in 2009, the world was in the midst of a financial crisis that took millions of people to the brink of poverty. Food prices had hit all-time highs, putting basic food staples like rice and wheat out of reach for many around the world.
In response, in 2009, G8 nations committed to act with the appropriate scale and urgency necessary to achieve sustainable global food security. The next year, President Obama launched the Feed the Future initiative as a whole-government approach to increasing support for agricultural development fighting world hunger. He also pledged then that the United States would invest $3.5 billion for 2010–2012. Since then, the United States has invested over $3.75 billion to address global food security, exceeding the President’s commitment.
Today, about 795 million people are still undernourished globally, but that number has dropped by 167 million in the last decade, due in large part to leadership and coordinated efforts like Feed the Future that are fighting hunger around the world. As a key member of the Feed the Future initiative, USDA recognizes that in many cases, stronger economic viability in developing nations is spurred by accelerating growth in the agriculture sector. Studies have suggested that every 1 percent increase in agricultural income per capita reduces the number of people living in extreme poverty by between 0.6 and 1.8 percent. USDA supports this initiative through in-country capacity building, basic and applied research and support for improved market information, statistics and analysis.
New data demonstrate that, thanks in part to Feed the Future and other collaborative U.S. Government efforts, stunting rates have declined in Ethiopia, Ghana and parts of Kenya by between 9 and 33 percent in recent years, while areas in Uganda have seen a 16 percent drop in poverty in rural areas. In 2014, Feed the Future reached nearly 19 million households via assistance or training and helped nearly 7 million farmers gain access to improved, and/or climate smart tools and technologies like high-yielding seeds, fertilizer application, soil conservation and water management. In addition, Feed the Future trained nearly 1.5 million people in child health and nutrition and reached more than 12 million children with nutrition interventions. In 2014 alone, Feed the Future-supported farmers experienced more than half a billion dollars in new agricultural sales, which directly impacts farmer incomes. These efforts should help ensure that more and more individual smallholder farmers will continue to both contribute to, and benefit from, participation in the global economy.
USDA staff members are strategically placed to monitor agricultural matters globally in 93 offices covering 171 countries and assist in efforts to build local capacity. Our staff and support has helped train small farmers and foreign officials on important issues like plant and animal health systems, risk analysis and avoiding post-harvest loss. We have also completed assessments on climate change and helped nations improve their agricultural productivity.
For example, USDA’s McGovern-Dole International Food for Education and Child Nutrition Program has supported the education, child development and food security of some 40 million of the world’s poorest children in Africa, Asia and Latin America. Projects aim to create long-lasting public-private partnerships with businesses and producers. In 2105 alone, 167 public-private partnerships were formed, many of which are between producer groups who commit to providing food to local schools that supplements food provided by USDA.
USDA’s Food for Progress program also helps developing countries and emerging democracies by helping to modernize and strengthen their agricultural sectors. In 2015, over 174,000 individuals in targeted Feed the Future countries and regions received USDA’s agricultural productivity or food security training.
The Norman E. Borlaug International Agricultural Science and Technology Fellowship Program promotes food security and economic growth by providing training and collaborative research opportunities to fellows from developing and middle-income countries. Over the past seven years, USDA’s Borlaug Fellowship Program provided training and collaborative research opportunities to 700 scientists and policymakers from developing and middle-income countries.
Likewise, the Cochran Fellowship Program provides training opportunities for senior and mid-level specialists and administrators to assist their countries in developing agricultural systems that will enable them to meet the food and fiber needs of their domestic populations. Over the past six years, USDA’s Cochran Fellowship Program trained 16,300 agricultural professionals worldwide in areas related to agricultural trade, agribusiness development, management, policy and marketing.
Driving Innovation through Research and Technologies
Since 2009, USDA has expanded analysis and reporting to increase core data, statistics, and analysis of global agricultural systems. In 2011, USDA expanded our annual Food Security Assessment to include 77 countries. We also completed assessments of agricultural statistics and market information in ten Feed the Future countries and identified key areas where improvement is needed.
But research is not helpful if we keep it to ourselves. In 2013, the United States, along with the United Kingdom, launched the Global Open Data for Agriculture and Nutrition (GODAN) initiative, which seeks to support global efforts to make agricultural and nutritionally relevant data available, accessible and usable for unrestricted use worldwide. Open access to research and open publication of data are vital resources for food security and nutrition, driven by farmers, farmer organizations, researchers and others. The GODAN initiative encourages collaboration and cooperation among existing open data programs to solve long-standing global problems. In 2015, USDA and USAID announced $4 million in support of the GODAN Secretariat, matching a previously announced commitment of $4 million by the Government of the United Kingdom.
Our research to solve food production issues also continues. USDA researchers sequenced the genome of wheat and the wheat stem rust pathogen, which threatens to destroy wheat crops worldwide and distributed new wheat germplasm globally to reduce the risk of unproductive harvests. USDA continues to support efforts to bring stem rust resistant genes into wheat breeding.
We’re also cooperating with over a dozen institutions in the United States and developing countries to provide resource poor farmers with dry bean cultivars with improved productivity and quality. Researchers have identified broad spectrum resistance to rust in large seeded landrace cultivars that originate from Tanzania. These landraces, with confirmed resistance in field trials in Africa and the United States, provide breeders with a valuable source of rust resistance for improving large-seeded African cultivars used by small-holder farmers.