Agricultural Trade:

Issues Affecting U.S. Agricultural Policy

CED-79-130: Published: Sep 14, 1979. Publicly Released: Sep 14, 1979.

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An examination of the issues arising from increased U.S. agricultural trade focused on the unexpected effects this trade might have on the well-being of U.S. farmers and on the agricultural structure of the U.S. trading partners. U.S. exports which are sold at a relatively inexpensive price may help subsidize the agricultural systems of some developed countries, but may hinder agricultural development in some developing nations. The United States imports about $14.8 billion in agricultural products yearly. While the food imports offer the domestic consumer a greater seasonal variety at competitive or lower prices, they may threaten the viability of certain U.S. farmers in addition to contributing to income inequities within the exporting countries. U.S. agricultural trade with Mexico provides examples of how some of these issues are manifested. An export plan to develop a large agricultural district in Baja California would give Mexico the capacity to grow produce the year round, and place Mexico in more direct competition with U.S. producers, particularly in California. Mexico's inequitable income distribution is a manifestation of its agricultural development policies. Only 4.5 percent of Mexico's farmers control 35 percent of the irrigated farm land. U.S. agricultural plans are interrelated with a variety of other interests: grain sales have provided income with which the United States has purchased oil; and the fruit and vegetable and grain trade between Mexico and the United States is related to U.S.-Mexican oil negotiations. The development of trading patterns such as these raises a fundamental issue about the course of U.S. agriculture in terms of the domestic farm structure: whether production of various foods should be further concentrated in specific geographical areas, or whether various U.S. regions should develop greater self-sufficiency in a variety of staple crops. This issue is basic to the structure of the rest of the food system, since the location of crop production determines the structure of food marketing. Any change to U.S. agricultural policy should be analyzed carefully to determine its probable domestic and foreign trade impacts.

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