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 MOFGA Position Statement on Free Trade in Agriculture Minimize

This policy was developed by the MOFGA-El Salvador Sistering Committee - a group committed to solidarity between MOFGA in Maine and CCR/CORDES* in El Salvador. At the time that this policy was drafted, farmers in El Salvador and in other Central and South American countries were protesting the Central American Free Trade Agreement (CAFTA) and the Free Trade Area of the Americas (FTAA) agreement. These proposed agreements would extend the principles of the North American Free Trade Agreement (NAFTA) to the countries of Central America, and the countries of South and Central America, respectively.

In our global economy, trade and trade-related policies impact everyone. Currently, the dominant trend in international trade is trade liberalization, also known as "free trade." Ultimately, trade liberalization is a movement toward less government interference in the trade and commerce between countries. But the current process toward liberalization is heavily influenced by both the choices of domestic governments and the decisions of bodies governing world trade - such as the World Trade Organization (WTO).

To date, trade liberalization policies have led to declining farm prices and income for small-scale farmers both in the United States and abroad.

Liberalized trade policies are also linked to increased scale in farm production, increased competition and displacement of small-scale farmers in developing countries. These trends negatively impact sustainable farming practices.

Regulations and standards concerning organic labeling, Genetically Modified Organisms (GMOs) and environmental protection may be overruled by international tribunals created through trade agreements such as CAFTA, the FTAA, bilateral trade and WTO agreements.

MOFGA supports the goal of standing in solidarity with farmers and farm organizations across the United States and around the world in calling for a more democratic process to determine the parameters governing both international trade and the domestic policies that promote international trade in agriculture.

To that end, we support:
  • trade policies that enhance the ability of small-scale and sustainable farmers to make a living wage;
  • diversity in farm production and in local cultures as well as the right and ability of local communities to set standards for the products they produce and consume;
  • socially and economically responsible trade in agriculture, including Fair Trade that ensures farmers living wages for the fruits of their labor;
  • the efforts of the Commission established by the Maine Trade, Jobs and Democracy Act (LD1815) in the last legislative session. This Commission, composed of our legislators and citizens, is examining the impacts of "Free Trade" Agreements to our economy, jobs, and democracy and will specifically examine the impacts to farms in Maine.
Further we:
  • will empower one of our members, if one so chooses, to be an official representative to the newly forming Maine Fair Trade Coalition as an advocate for the interests of small-scale, organic, and sustainable farmers in international trade issues;
  • stand in Solidarity with farmers in El Salvador and in other parts of the developing world to reject the FTAA and CAFTA in their current forms as destructive to the lives and livelihoods of family farmers world-wide;
  • seek to provide education to the public about trade issues and their impact to small-scale farmers world-wide in order to empower thedemocratic process.

*. CCR (Association of Communities for the Development of Chalatenango) is the organizing arm of its parent organization, CRIPTES, and its mission is: "to promote and consolidate the organization, education, and mobilization of rural communities, and to stimulate and strengthen participation of women, men, and youth in community organizing and local government which ultimately contributes to social, political, economic, and cultural transformation." CCR works in partnership with CORDES (Foundation for the Communal Cooperation and Development of El Salvador) whose mission is: "to promote and strengthen sustainable economic development with equity in rural and sub-urban areas which socially, economically, and politically have been neglected."


Why should MOFGA object to CAFTA, the FTAA, NAFTA, and similar international trade agreements?
What happens to small-scale farmers when barriers to international trade are eliminated?

  1. Overall, international trade agreements benefit agribusiness to the detriment of small-scale farmers. According to the National Family Farm Coalition (NFFC): "Current US agriculture policy allows agriculture products to be sold on the international market far below their cost of production which benefits mainly agribusiness corporations and very large farming operations. These policies allow these large players to buy cheap and sell across international borders wherever they can make the most profit, while underselling local farmers both in the U.S. and abroad, and intensifying rates of poverty since family farmers worldwide are unable to compete."
  2. Small-scale farmers in the U.S. do not benefit from gaining access to other countries' markets. Trade agreements are written for business interests, and put the primary focus of discussions on increasing PROFITS for US corporations, and decreasing PRICES for consumers. Agribusinesses can increase profits even while commodity prices decline by dumping cheap products in other countries while continuing to profit from subsidies. This hurts small-scale farmers in other countries, and does not benefit small-scale farmers in the U.S.
  3. Small-scale farmers in the U.S. and around the world are hurt by downward price pressures when transnational agribusiness corporations move products freely across countries' borders. How many times have you heard that local, organic food is "expensive"? Probably many. But are small-scale organic farmers making living wages? No. American consumers and our society are trained by artificially low food prices, set by subsidized agribusiness. According to the NFFC, "more than 40% of net income of agriculture in the U.S. comes from the federal government in the form of direct subsidies, an attempt to make up for low commodity prices." These artificially low prices make it impossible for small-scale American farmers to compete with agribusiness in terms of price - even when food comes long distances from factory farms to supermarkets, with many middlemen taking a cut.

International trade agreements exacerbate this problem worldwide by creating incentives for agribusiness to buy commodities cheaply from farmers in one country and sell them at prices lower than local farmers can afford in another country. U.S. agribusiness can also "dump" cheap products (like soybeans) on other countries. A farmer from Thailand who visited Maine last year asked "How can the U.S. grow soybeans, send them half-way around the world to Thailand, and still sell them in our markets for prices too low for us to compete?"

In Mexico, imports of agricultural products have increased 44% since NAFTA, while food insecurity in the rural sector has increased from 36% in 1992 to 52.4%.

For more general information or analysis of trade agreements and their impact to small-scale farmers, go to "Why We Say No to CAFTA" by the Alliance for Responsible Trade - with agricultural sections written by Dennis Olson of the Institute for Agriculture and Trade Policy.

Specific CAFTA Issues of Concern - from an Institute for Agriculture and Trade Policy Analysis

  1. Protection of Corporate Rights to Enforce Patents of GMO's - CAFTA states that countries participating in CAFTA must adhere to a set of corporate rights to patent genetically modified plants and animals. (Article 15.1.7) This set of corporate rights has allowed such events as Montsanto's prosecution of Percy Schmeiser for having his crop contaminated with GM corn. And, in fact, CAFTA sets out an even more strict set of corporate rights than previous trade agreements, according to the Institute for Agriculture and Trade Policy in Minnesota. In addition, CAFTA requires that countries enforce intellectual property protection whether or not they can afford to do so. (Article 15.11.1)
  2. Policies Protecting Corporations from Disclosing Safety Information - CAFTA protects developers of agricultural chemicals from having to divulge to the public "undisclosed data concerning the safety or efficacy of a product that was previously approved in another territory" when seeking to market a patented product in a new country. (Article 15.10.1b)
  3. Potential Section F Trade Discrimination against NGO's and Fair Trade Organizations - A provision in Chapter 3 of CAFTA states that no country "may allocate any portion of a Tarriff-Rate Quota to producer groups or non-governmental organizations…" According to the Institute for Agriculture and Trade Policy (IATP), this clause forbids governments from giving part of their tariff quotas (as I understand it, these are amounts of a particular commodity that can be traded tariff-free) to traders of commodities such as fair trade coffee. I'm not sure what the real impact of this would be - but the IATP states that it is explicit discrimination against NGO's andFair Trade Organizations.
These points are from Analysis of the Central American Free Trade Agreement (CAFTA) Concerning Agriculture by Steve Suppan of the Institute for Agriculture and Trade Policy.

    

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