There has been plenty of effusive promotion about the so-called “benefits” of the Trans-Pacific Partnership (TPP), but in reality the deal is a huge boon to big agribusiness and food companies. Indeed, corporations including ConAgra, Hormel, Kraft-Heinz, Cargill and Tyson Foods stand to benefit the most from the deal—that’s why they’ve been lobbying for it so aggressively. What’s less commonly known is that the TPP will undermine independent farmers and ranchers.
That’s why this week, a coalition of over 160 farm, rural, faith and food groups urged Congress to reject the TPP because the significant risks it poses to American farmers and ranchers outweigh any modest benefits. This is especially true today, when crop and livestock prices are falling and farm incomes are half what they were a few years ago. More TPP imports will only worsen an already precarious economic situation for many farmers.
The significant risks the TPP poses to American farmers and ranchers outweigh any modest benefits.
It is no surprise that the big meatpackers, food processors and global agricultural companies that buy, process, and ship farm products are the ones that will benefit from the TPP. The companies — not farmers — capture any export benefits. These companies can also use the trade deal to offshore their supply chains and ship farm and food products back to the United States, where the imports compete with products from American farmers.
Agribusiness Wins Big Under TPP
The promised export benefits of trade agreements have not always materialized. Since the mid-1990s, the United States has inked free trade deals with 20 countries and each was supposed to have boosted farm exports.
If NAFTA, the WTO, the China trade deal and a fleet of smaller trade pacts had really super-charged farm exports, U.S. corn, soybeans and wheat exports should have risen dramatically. Instead, the combined exports of these crops have remained pretty steady at about 100 million metric tons for the past 35 years.
The TPP export promises may turn out to be mostly hype. Japan will slowly lower its tariffs on beef and pork — but in the deal it kept the right to instantly restore them if imports are hurting Japanese farmers. Canada basically refused to import more dairy products under the TPP. And how much pork can the U.S. expect to ship to Muslim TPP nations like Brunei and Malaysia?
The modest TPP agricultural export gains would primarily benefit agribusiness and food industry processors and shippers, with farmers seeing little if any benefit. Farmers don’t export their crops and livestock; they sell them to meatpackers, grain traders and food processors who in turn are the exporters.
Almost all of the export value goes to the companies, not the farmers — just like in U.S. supermarkets. On average, farmers receive less than 16 cents for every grocery dollar — only earning about 7 cents after covering their expenses.
Ignoring Imports Ignores U.S. Farmers
TPP proponents only talk about increasing farm exports, but they never mention the new influx of agricultural imports. What they don’t want to admit is that these imports will compete directly with U.S. farmers, who will receive less for their crops and livestock.
This is not a theoretical problem. Prior trade deals have brought a flood of imported tomatoes from Mexico, garlic from China and lamb from Australia. Already, we import way more beef from TPP partners than we export to them. In 2015, we had more than a one-billion-pound beef trade deficit with TPP partners. These imports help push down the prices farmers receive for cattle as sides of beef are imported from Australia and Canada and New Zealand.
According to the U.S. Department of Agriculture, agricultural imports are expected to reach a record $119 billion. The TPP would just make these farm and food imports rise faster. That means more dairy powder from New Zealand, more processed fruits and vegetables from Vietnam and Malaysia and more fresh produce from all the TPP partners.
As if that wasn’t reason enough to be wary, many imports come from countries with weaker food safety, environmental and worker protections. We already have had significant problems with imported beef from TPP members Australia and Canada. And with more imports, it is harder for border inspectors to make sure all the imports are safely produced and safe to eat.
Take action to stop the TPP today.
Farmers have heard rosy farm export promises for the past twenty-five years. But the reality is more complex—only a small fraction of the export gains will filter down to them. As this week’s coalition letter concludes, Congress should “stand up for American independent farm and ranch families and reject the TPP.” Take action to stop the TPP today.