Critics say multinational corporations likely winners in Asia trade agreements

The Branstad administration’s plan to increase agricultural and business trade with Asia won’t do much to help Iowa’s independent family farmers and raises environmental questions, the leader of the Iowa Farmers Union said Monday. And an Iowa State University agricultural economist cautioned that while multinational agribusiness corporations, landowners and some farmers would benefit from increased trade, consumers could pay more for Iowa-produced goods at the grocery store.

In a news conference with Iowa statehouse reporters Monday, Lt. Gov. Kim Reynolds said she and Gov. Terry Branstad will lead two trade missions later this year, one to South Korea and China and the other to Japan and Taiwan. Joined by business and agricultural leaders, state officials hope to begin building relationships that will increase Iowa’s current $9 billion in exports by 20 percent worldwide over five years.

Reynolds was joined at the news conference by Ag Secretary Bill Northey and Iowa Department of Economic Development Director Debi Durham. They said Iowa – the nation’s No. 1 producer of hogs, corn and soybeans – is in competition with the European Union and Brazil to meet a new 1.5 billion person demand for agricultural products in Asian countries as their middle classes grow.

Chris Petersen, president of the Iowa Farmers Union, a policy group advocating for agricultural sustainability issues, said the big winners in increased exports are big agribusinesses whose market share are the subject of USDA and Department of Justice antitrust hearings.

“It would help independent farmers a little, but not enough to make a difference,” Petersen said. “It seems to benefit less and less the people in this state, and benefits more and more huge multinational corporations.”

Petersen, a Clear Lake farmer who raises antibody-free Berkshire hogs for niché markets who has converted his row-crop operation to hay, said increasing agricultural exports could accelerate the use of farming practices that aren’t sustainable and contribute to water pollution.

“How long are we going to keep sacrificing independent livestock agriculture, environment and our water quality for exports?” he said. “There’s got to be more a lot more leveling. These practices aren’t sustainable. The only people it seems to be sustainable for is big business, which has always done well – far better than independent family farm agriculture.”

Ag economist Bruce Babcock, who heads Iowa State University’s Center for Agricultural and Rural Development, said expanded production to meet worldwide demand “does have consequences.”

“If China wants to import pork, the U.S. would have to significantly increase production,” Babcock said. “Ninety-nine percent of hogs are raised in confinement operations, and for those people who are against confinements, there is, in fact, a tradeoff. There isn’t a tradeoff for those who don’t care.”

As foreign demand for Iowa products increases, “the U.S. consumer will pay more,” Babcock said. “If we had to eat everything we produce here, we wouldn’t be producing this much. The world gains as a whole from trade, but there are winners and losers. For example, our domestic consumers are worse off with exported products, but better off by the import of fruits and vegetables, wine and cheeses.”

The environment is also a potential loser, Babcock said, because increased exports of feed grain, oil seeds and other worldwide demands pressures Iowa farmers to convert fragile land to row crops.

“It puts pressure on wildlife habitat,” he said. “For example, conservation reserve programs have fewer acres, in part because of robust demand for product overseas, but also because we’re diverting more to ethanol.”

Petersen echoed Babcock’s environmental concerns, noting that Iowa has lost half of its topsoil to industrial farming practices. Land resources are “like a bank, but there’s no savings account, the checking account balance is depleted, and when the money runs out, the soil runs out,” he said. “There’s only so much farmland.”

Petersen said he’s “not anti-export, but we better be sure we are taking care of our national interests, like food security, price of food and availability.”

“Export the extra,” he said. “Let’s not sacrifice consumers’ interests to get more exports. Again, who is this benefiting?”

Reynolds estimated that increasing exports by one-fifth would create about 12,600 jobs as part of a push to get 106,000 jobless Iowans back to work. The Branstad administration has pledged to create 200,000 new jobs in Iowa over the next five years.

The quality of jobs that would be created through increased agricultural exports is a concern to Iowa Citizens for Community Improvement, a grassroots advocacy group that historically fought concentrated animal feeding operations (CAFOs) the group believes concentrate economic control in the hands of absentee investors.

Dave Goodner, a community organizer for CCI, worries that trade agreements could be a repeat of 1995, “when Branstad rolled out the welcome mat for factory farmers with House File 519.”

Branstad championed factory farm legislation in the 1990s as an economic silver bullet as agriculture recovered from the 1980s farm crisis. But critics credit it with decimating the ranks of independent Iowa farmers, whose numbers have shrunk by 90 percent since its passage, and for creating low-paying jobs.

“For every one job the factory farm industry creates, three jobs are lost – in mom-and-pop meat packers, butcher shops and all that local infrastructure,” Goodner said. “Meat packing or working in the hog barns – those are low-wage jobs paying no benefits and carrying high risk for injury. Our office has heard a lot about wage theft in these companies, and not paying workers the meager wages they are promised.”

He said expanding pork exports “might be good for corporate for corporate ag profits, but it would be bad for family farmers, workers and the environment.”

Since 1995, the Iowa Department of Natural Resources has documented more than 700 manure spills in Iowa. The DNR also lists more than 434 waterways as impaired, in large part because of industrial farming practices.

Petersen and Goodner said trade agreements that favor large multinational agribusiness corporations would represent a continued attack on the shrinking middle class.

“Free-trade agreements do not respect worker rights or environmental rights,” said Goodner, noting that the AFL-CIO, the nation’s largest private union, opposes free trade agreements with South Korea, as does CCI.

“It’s a bad deal, and it should not be passed,” Goodner said.

“I guarantee you, there is nothing – absolutely nothing – free in free-trade agreements,” Petersen said. “Somebody pays the price. In fair trade, everybody benefits to a certain degree.”

Petersen said a better plan to restore economic vitality to rural Iowa would be to localize food systems, which in turn benefits Main Street businesses.

“Revenue turns over seven or eight times, you stem the tide of people leaving the state, and we might get some of the kids to stay or come back because they could make a decent living and have good quality of life, whether they’re in agriculture, manufacturing or the local community,” he said.