Agriculture Industry Can Be Thankful

For many, November is the month to celebrate those things for which you are most thankful for throughout the past year. Now, farmers have a bit more to be thankful for because President Obama signed three long-awaited free trade agreements (FTA) among the United States and South Korea, Colombia and Panama October 21.

“For America’s farmers, the trade agreements are an opportunity to strengthen U.S. agriculture,” says Tom Vilsack, agriculture secretary. “Farm exports help support more than 1 million American jobs. At this time next year, U.S. agricultural exports will be on track to reach new highs, leading to a trade surplus of more than $42 billion, eight times greater than five years ago.”

When implemented, it is estimated that the South Korea FTA will increase $1.9 billion in U.S. agriculture exports and eliminate two-thirds of its tariffs against U.S. agriculture products; the Colombia FTA will raise $370 million in agriculture exports and eliminate 80 percent of its tariffs; the Panama FTA will raise $46 million in agriculture exports and eliminate 50 percent of it tariffs.

How will these trade agreements specifically benefit crop farmers? An Ohio’s Country Journal article reports the following:

  • Corn: U.S. corn producers gain immediate access to the Colombian market for 2.1 million metric tons of corn at 0 percent duty-free
  • Wheat: Primary market for U.S. wheat in South America
  • Soybeans: Elimination of variable tariffs on soybean imports, which has imposed tariffs as much as 150 percent; Phases out the 24 percent tariff for refined soybean oil throughout the next five years
South Korea
  • Corn: Third main U.S. corn market and a potentially important market for distillers grains; Imports of U.S. corn for feed enter duty-free
  • Soybeans: Soybeans for use in cooking oil and livestock feed enter duty-free; The current tariff on soybeans imported for food uses like tofu and soymilk will be eliminated
  • Corn: Decreases America’s duty charge to level the playing field
  • Soybeans: 0 percent tariff treatment for soybeans, soybean meal and crude soybean oil will be locked immediately upon implementation; The 20 percent tariff on refined soybean oil will be phased out in 15 years

This legislation provides Ohio grain, in turn, Ohio farmers, with significant market export opportunities. Crop farmers will be able to more effectively compete on the international trade market and that is definitely something that we can be thankful for.

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