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Preference of Nonwoven Covers to Grow Across Crop Protection Applications

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Preference of Nonwoven Covers to Grow Across Crop Protection Applications

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Growing instances of adverse weather conditions will positively influence the need for nonwoven crop covers. The jump in the levels of soil and water pollution has resulted in the surging requirement to counter pests and harmful substances across the agricultural sector. Nonwoven fabric crops are extensively used to protect crops, fruits, and vegetables from risky frosts, hailstorms as well as heavy gusts of winds. They also limit the entry of insects into these plant bodies.

Apart from these factors, the crop covers help to reduce the need for chemical treatment for the plants. They offer water and air permeability to the roots of the crops in order to mitigate the instances of maintenance at the upcoming stages of the yield. Furthermore, nonwoven agricultural crop covers render prevention from excess UV rays and facilitate organic farming practices.

As per a recent research report, the global nonwoven crop cover market size could grow at a significant CAGR by 2026.

Customization benefits from rolled crop covers

Industry share of roll nonwoven crop covers will witness considerable expansion due to their increasing preference in comparison to tube and sheet-cut counterparts. The size of the rolls can be customized as per consumer requirements. Furthermore, nonwoven fabrics are over 80% transparent and are uniformly structured, and are found to be better packaged in the form of rolls.

On the other hand, the uses of non-woven crop covers across the crop protection application segment will foster significant gains. This is owing to their robust capabilities in offering better gas exchange and lower suffocation to the roots. The covers are widely used as covering materials in garden farming, greenhouse, and garden beds. This is because the fabric provides an optimal microclimate for plant growth and minimizes the duration of maturing.

The application of nonwoven fabric crop covers in frost protection is likely to reach a prominent growth rate. This can be attributed to their increasing adoption to render safety from frostbites, hailstorms as well as heavy gusts of winds.

Asia Pacific as a leading producer

Asia Pacific is anticipated to see substantial demand for the nonwoven crop cover in the coming years. This can be attributed to the presence of a prominent agricultural sector that has led to the increasing use of the products.

Also, leading manufacturers across some developing countries are working on enhancing their products to offer better productivity and results. Citing an instance, India-based agricultural plastics manufacturer, Ray Colors, made use of Chimassorb, a light stabilizer from BASF to produce PP non-woven fabrics to cover crops, plants, and vegetables.

Manufacturers of nonwoven fabric crop covers are looking forward to new product developments, and capacity expansions to increase their customer reach. These firms are also keen on strategic collaborations like acquisitions and partnerships in order to broaden their product portfolio.

For instance, Berry Global Group, in July 2019, acquired RPC Group Plc (RPC) to provide value-added protective solutions and mark its name as a leading plastic packaging company across the world. First Quality Non Wovens Inc., Mitsui Chemicals, Kimberly Clark Corp., and Akitieselskabet Schouw & Co. Group are few other product manufactures worldwide.

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Challenges to Supply Chain in Grain Markets

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There is a growing concern among grain companies on the storage and transportation of huge harvests of grains. Australia, Canada, Ukraine, Russia, the United States, and Argentina are being very competitive in the grains market right now.

Oversupply tends to tighten the margins which reduce grain prices. It is a challenge for grain companies to cost-effectively store and move grains. You must maximize throughput at grain terminals which helps you to stay competitive in the global market. But there could be regional factors that affect the cost of grain production and logistics.

For instance, grain companies in Western Australia have traditionally suffered higher costs of grain production, as they must rely on imports of farm inputs and machinery. Similarly, companies in South Australia are also grappling with high (and often non-transparent) grain supply chain costs, which has prompted the local government to intervene and investigate. In fact, the Australian Export Grain Innovation Center estimates that supply chain costs make up almost 30% of the cost of grain production, storage, and transportation.

These regional factors are not exclusive to Australia. In Western Canada, for instance, bottlenecks in railway networks often delay grain deliveries by several months, and here too, the government has intervened with policy changes. In Ukraine, grain logistics costs are 40% to 50% higher as compared to other major grain-producing countries. Adding to the woes of grain handling companies are unforeseen events that can further choke the supply chain. For example, extended disputes between train drivers and their employers, disrupting supply chains in many countries.

Grain marketing companies have responded to these challenges by consolidating grain receival sites and trying to push more grain through a limited number of larger terminals. This helps them cut costs as they now must support fewer silos. However, costs saved here have not vanished from the supply chain. The cost pressures have merely shifted upstream as grain producers are now forced to transport stock over longer distances to reach those terminals and/or invest in on-farm storage. In fact, on-farm storage has increased steadily over the last few years in regions such as the USA, Australia, and Canada.

Investments in on-farm storage are enabling producers to hold on to their stocks instead of selling at lower prices in an oversupplied environment, thus shifting cost pressures right back down the supply chain towards the grain marketers. Some grain marketers are trying to break out of this vicious cycle by plowing back some of the money saved from consolidating grain terminals. For instance, GrainCorp started an initiative called “Project Regeneration” where they invested AUD 200mn into the grain supply chain to cut transportation costs for producers in the hopes of securing higher grain prices in the long run.

Steps to mitigate challenging times

In summary, it is evident that grain companies are staring at challenging times ahead, with regional factors outside their control expected to create more pressure in an already tough environment of low grain prices. Grain companies need to be ready to tackle these challenges and remove inefficiencies in their supply chains. However, the first step towards removing inefficiencies is to find potential areas of bottlenecks, and for that, one must have real-time visibility over grain supply chains.

Grain companies need to have software solutions that can record the origin of grains, store information about contracts, and track grain shipments – including quality parameters as the grain moves across the supply chain. Software should enable real-time visibility and help grain companies check the health of their supply chain in real-time, adjust/regrade stock levels as needed, optimize equipment paths within grain terminals, and increase efficiency and throughput.

Eka Software Solutions is a global leader in providing digital commodity management solutions for the agriculture industry, driven by cloud, blockchain, machine learning, and analytics.

To talk to Eka experts please write to info@eka1.com

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USTA APPLAUDED FOR PROTECTING FARMERS FROM FOREIGN IMPORTS

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The Washington, D.C.-based Corn Refiners Association (CRA) supports a plan recently unveiled by federal agencies to address the threat posed by increased foreign imports to American producers of seasonal and perishable fruits and vegetables.

Hearings conducted in August included testimony from more than 60 witnesses led to the drafting of a report by the Office of the U.S. Trade Representative, the Department of Agriculture, and the Department of Commerce. In his statement, CRA President and CEO John Bode addressed current market conditions American farmers are experiencing and applauded efforts in identifying solutions for the food supply chain industry.

“We appreciate the consideration of the Office of the United States Trade Representative, Department of Commerce, and U.S. Department of Agriculture trade leaders in considering the testimony of all witnesses at the recent seasonal produce hearings,” says CRA President and CEO John Bode. “They are to be commended for their commitment to investigate the trade allegations raised by Southeast farmers of seasonal and perishable fruits and vegetables who are experiencing very difficult times.”

“This announcement by United States government agencies outlining rigorous trade compliance and trade enhancing activities are in the best interest of all of American agriculture and American consumers,” he concluded.

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AGRICULTURAL SUBSIDIES: EVERYONE’S DOING IT

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Everybody’s Subsidizing

$700 billion every year – that’s how much governments worldwide provide in some form of subsidy to their agricultural sectors. Researchers behind the OECD’s “Agricultural Policy Monitoring and Evaluation 2020” report found that the 54 countries studied (all OECD and EU countries, plus 12 key emerging economies) provide over $700 billion a year in total support to the agricultural sector. The vast majority of this, $536 billion, is in the form of payments to producers; the rest takes the form of consumer support and enabling services such as infrastructure investment or research and development.

Subsidies are in part, a recognition of the unique challenges that the agriculture sector faces – and the important role it plays in our society by ensuring food security. Farming is highly weather dependent and extremely vulnerable to uncontrollable events such as natural disaster. Agriculture also requires significant investment from producers in expensive equipment, inputs and labor before any profit can be made, and faces an obvious time delay between shifts in demand and supply.

700 billion

However, agricultural subsidies can also have trade-distorting effects. For this reason, they are the basis of many international disputes. In the recently negotiated U.S.-Mexico-Canada Agreement agricultural subsidies played a key role: Canadian dairy subsidies were perhaps the biggest agriculture-related sticking point for the U.S., and Mexican tomato subsidies continue to cause tensions. Across the globe Brazil, Australia and Guatemala have disputed India’s subsidies to its sugar industry.

The complaint from least developed countries is that global subsidies disproportionately disadvantage their small producers, whose own governments cannot provide the same support, leaving them unable to compete with the heavily-subsidized farms of richer countries. Communities say that foreign products, such as European milk, are flooding their markets, crippling local herders and farmers and leaving consumers vulnerable to price changes.

The United States has borne the brunt of criticism for its agricultural subsidies. American farmers receive billions in support. However, when measured as a percentage of total farm revenues, South Korea, Japan, China, Indonesia and the EU all provide producer support above the global average of 12 percent, whereas the United States, along with Russia, Canada, and Mexico have historically been at or below this average.

China more than

Who Subsidizes the Most?

The tables below show the largest subsidizers ordered by total spending, and by percentage of gross farm revenues, according to the data collected by the OECD. Smaller countries like Norway, Iceland and Switzerland top the tables when it comes to support as a percentage of gross farm revenue at 57.6 percent, 54.6 percent and 47.4 percent respectively. The United States does not even make the top 10 on this measure, with total producer support calculated at 12.08 percent.

In terms of total spend, China, the EU, and United States comprise the top three. However, China spends almost four times as much as the United States, and more than the next three biggest spenders – the EU, United States and Japan – combined.

ag subsidies tables

Exactly how and to whom subsidies are dispensed differs widely by country, as do the goals of agricultural subsidy programs. Here we look at a few of the biggest subsidizers: China, the United States, Japan, and the EU, as well as the case of New Zealand, a nation with virtually none.

The United States

Throughout most of its early history, the United States did not subsidize agriculture. A nation largely founded by farmers and land workers held agriculture in high esteem, but was determined that no other group should be taxed to fund another. However, the Great Depression of the early 1900s and the presidencies of Hoover and Roosevelt reversed this. Hoover established the Federal Farm Board which fixed market prices for certain produce, inducing excess production of the supported items. Roosevelt supported the Agricultural Adjustment Act (AAA), which paid farmers not to produce in order to reduce agricultural surpluses.

In 2019, OECD data show that the United States provided agricultural support of over $48 billion, however, close to half of this was in the form of support to consumers through nutrition assistance programs. Federal support to agriculture has shifted and changed with various administrations, with the five-year Farm Bill being the primary legislative vehicle used to implement changes to the “farm safety net“, including government subsidies.

Under the rules of the WTO the United States, along with other developed countries, agreed to set limits on spending. The U.S. limit is $19.1 billion on certain types of “market distorting“ support. However, the latest data shows that direct support to farmers in 2019 was the highest it has been in 14 years, at around $22 billion, leading to questions about whether the United States exceeded its annual limit on “amber box” spending.

This spike is largely attributed to recent ad-hoc compensation to farmers, unrelated to the Farm Bill and initiated by the Trump administration, to compensate farmers for unforeseen losses. To make up for lower prices and lost sales caused by the U.S.-China trade war, the U.S. government committed billions in dollars to farmers in 2018 and 2019 through the Market Facilitation Program. When COVID-19 hit, and the administration implemented another program – the Coronavirus Food Assistance Program – to help farmers stay afloat despite disrupted supply chains. All in all, government payments to farmers are projected to reach as high as $37.2 billion in 2020.

China 4x more

China

China began subsidizing agriculture in earnest relatively recently but has quickly become the world’s biggest subsidizer by dollar amount. Formerly the nation’s primary source of employment, the Chinese government for years taxed agriculture to support urban populations. In 2004, China first implemented subsidies to protect rural workers from foreign competition. Although it has now evolved into a manufacturing economy, roughly half the labor force is still employed in agriculture, with lower living standards than their urban counterparts. The Chinese government subsidizes rural farmers to prevent political instability, while bolstering the production of particular crops to reduce reliance on foreign produce, such as U.S. soybeans.

China’s agricultural subsidies have ruffled the feathers of other world powers, particularly the United States, which won a WTO case against the country’s unfair wheat and rice subsidies. The U.S. Trade Representative complained that Chinese subsidies undercut U.S. producers exporting their produce to China’s vast market. The WTO panel investigating the issue found that in 2012, 2013, 2014 and 2015, “China provided domestic support… in the form of market price support to producers of wheat, Indica rice and Japonica rice in excess of its commitment level of “nil””. Disagreements over subsidies remain a sticking point in the U.S.-China trade war.

China may be beginning to scale back its subsidies. After two decades of steady growth, the OECD data show that China’s share of gross farm receipts going to support producers has started to decline in the last two years. Given its astronomical spending it will take a long time for China’s spending to approach anything on par with the European Union, let alone the United States.

line charts on China spend

Japan

Japan’s agricultural subsidies as a share of gross farm revenues are two times above the OECD average, at 41.3 percent, remaining high despite over a decade of cutting back. About 80 percent of the support is in the form of market price support, artificially keeping prices at a certain level, which is achieved mainly by border controls for rice, milk and pork.

In their discussion paper for the International Food Policy Research Institute, Yoshihisa Godo and Daisuke Takahashi outline Japan’s unique subsidy landscape. Most Japanese farmers farm as a secondary business and have another stable source of income, yet they receive the same benefits as full-time farmers, without feeling the same need to innovate and compete. The political pressure these small plot farmers yield gives them much sway over farmland use regulations and other policies that benefit them, such as income compensation programs.

These issues result in inefficiency and a lack of productivity, helping to explain why Japan is the only country with a declining food self-sufficiency rate, entrenching established interests and driving away young potential farmers.

This puts Japan’s heavy agricultural protection in a category of its own. Whereas the action of heavy-subsidizers like Europe and the United States increase their agricultural output – in Japan it has decreased. This may help to explain why Japan is becoming more willing to reduce tariffs on agricultural goods, pledging to cut back such tariffs on pork and beef in their recent free trade agreements with the EU, United States and UK.

The European Union

Since 2010, government support to agriculture in the EU has been stable at around 19 percent. The EU’s Common Agricultural Policy (CAP) is an extensive EU-wide policy and their largest budget item, accounting for around 40 percent of the annual budget. It aims to support farmers, improve productivity, and safeguard the livelihoods of European farmers, while improving sustainability and protecting rural land. The EU’s outline of the CAP explains that farming requires special protections given its distinctness from other productive activities, such as its reliance on the weather and time delays. The CAP provides three forms of protection: income support through direct payments to farmers; market measures to combat price or demand drops; and rural development.

The centrally organized system however lends itself to opacity and corruption in the distribution of these subsidies in some member states where populist governments are able to capture the benefits and use them to reward friends and punish enemies. The burdensome administration process and system that doles out cash based on the amount of land-owned is also proving to be a roadblock for young farmers who access their land through non-conventional contracts or seek to start small – meaning they miss out on subsidies that are propping up their larger competitors.

Subsidies are also forming a key part of the UK-EU Brexit negotiations. UK farmers will lose out on billions of dollars of EU agricultural subsidies when the country breaks with the bloc, which will be a huge challenge for the government and the country’s farmers who will see a phasing out of subsidies they rely on to keep their farms afloat. But it will also provide an opportunity for them to take a new approach that rewards farmers who incorporate good environmental practices.

India and What’s Hidden in the Data

India is notably absent from these tables given that they are the world’s largest producer of milk, pulses and spices and second largest producer of rice, wheat and fruit among many others. They are undeniably an agricultural super power, so is it that they don’t subsidize? No, they definitely do, but the answer is a bit more complicated.

Indian farmers are aided by direct payments and large subsidies for inputs, such as irrigation water, power and fertilizers. Producers in India receive support corresponding to about 7.8 percent of gross farm receipts, as well as market price support of 2 percent. If we only take into account the positive support, India is subsidizing agriculture by over $11 billion. However, this is offset in the OECD data by what they term India’s negative market price support, which reflects the amount that domestic producers are implicitly taxed due to a series of complex domestic regulations and trade policy that more than offsets any gains they receive from subsidies to the tune of $77 billion, a -14.8 percent hit in terms of farm receipts.

Generally, developed countries such as OECD member countries have very low values for this negative market price support category, sometimes even zero. But other countries with restrictive domestic and trade policy – such as Argentina and Vietnam, which have negative support values of $11.4 and $5.2 billion respectively – hurt their producers in this way.

A World Without Subsidies? Just Look to New Zealand

Not all wealthy, agriculture driven countries rely on subsidies, however. Australia and New Zealand’s agricultural supports are just 1.85 and 0.7 percent of their gross farm revenues respectively. New Zealand in particular is a fascinating case. Its low agricultural support may be surprising given New Zealand is five times more dependent on farming than the United States.

In 1984 New Zealand’s government ended all farm subsidies, which at the time represented around 30 percent of the value of farm production. Despite fear and protests at the time, around twenty years after the action just one percent of farms had gone out of business and the value of farm output increased by 40 percent. By reacting to competitive pressure and consumer demand, cutting costs, and innovating, New Zealand farmers were able to rebuke the argument that agriculture needed government support to survive.

Effects of the “New Subsidizers”

Certain types of agricultural subsidies have trade-distorting effects, but their historical use among the biggest and wealthiest agricultural exporting countries provoked a “they’re doing it, so we should too” response. The biggest growth in subsidy use over the last decade has been among the fast-growing emerging economies such as China, India, and Turkey, clearly seen in the data from the OECD.

Given differing WTO rules on agricultural subsidies for developed versus developing countries, and the significant amount of spending particularly by China, this shift is important to recognize to both break old perceptions of who subsidizes and to ensure that new baselines are used to negotiate future rules on agricultural subsidies.

__________________________________________________________

Alice Calder

Alice Calder received her MA in Applied Economics at GMU. Originally from the UK, where she received her BA in Philosophy and Political Economy from the University of Exeter, living and working internationally sparked her interest in trade issues as well as the intersection of economics and culture.

This article originally appeared on TradeVistas.org. Republished with permission.

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The Importance of the Dairy Industry in 2020 With Leading Experts in the Era of COVID-19

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Tell our readers about the reach of the dairy industry, what they might not be aware of in terms of populations served and livelihoods supported?

Donald Moore (Executive Director of the Global Dairy Platform, which works to promote the nutrient richness of dairy products, bring balance and research to the role of milk fat in the diet and provide clarity on how dairy is managing its relationship with the environment):

In 2015, Global Dairy Platform (GDP) worked with the Food and Agriculture Organization (FAO) of the United Nations to determine just how far the dairy sector reaches, the people’s lives we impact. We all knew it was a big industry, but we didn’t know just how big.

They [the FAO] determined that there were 133 million dairy farms in the world. That’s a big number and it also conveys a lot in terms of the families that rely on the industry and the importance behind the nutrition dairy provides.

However, beyond the numbers, let’s talk scale – Based here in the U.S., we tend to think of dairy farms as reasonably large-scale, but in reality, the average dairy farm around the world hosts about three cows. Dairy farms are located in virtually every country in the world, including some small island nations and countries in the Middle East where you would assume the conditions weren’t viable for dairy, yet there they are.

There are some 600 million people living on those dairy farms around the world and if you take into account people who work upstream and downstream from the dairy farm, there’s another 400 million people whose livelihoods depend upon dairy.

We often talk about dairy as being a ‘billion-person community’, so suffice it to say, we support the livelihoods of one billion people, plus.

There are some 240 million full time jobs created by the dairy sector; of those jobs, approximately 80 million are held by women, so it’s a sector that actually has quite a large gender population balance. Of the 133 million dairy farms, 37 million are led by women. One of the things that we like to talk about is the role that dairy can play in bringing gender equality to the global agriculture and livestock sectors.

Jay Waldvogel (Senior Vice President, Strategy- Dairy Farmers of America): Around the world, annually, there are some six billion people who consume dairy. Now obviously, some consume more than others, but six billion people from a consumer perspective are aware of, are touched by, or have some relationship with dairy when it comes to their nutritional intake.

Donald Moore: Roughly ten percent of the world’s protein comes from the dairy sector. In many parts of the world, people lack protein in their diets. One of the things about the dairy sector that I admire is that it provides high-quality protein as well as many other micronutrients that are essential for healthy growth.

Margaret Munene (Co-founder of Palmhouse Dairies and a founding trustee of the Palmhouse Foundation): The Global Dairy Platform ultimately brings the global dairy sector together on a pre-competitive basis, to build evidence on dairy’s impact in a sustainable food system and significant role in the future of food. GDP membership includes more than 95 leading corporations, companies, associations, scientific bodies and other partners. GDP’s members have operations in more than 150 countries around the world and it’s important to note also, that GDP members collectively produce a third of all the world’s milk.

In times of crisis, such as this ongoing COVID-19 pandemic, we often talk about maintaining security by maintaining supply. Tell me about the security of supply pertaining to the dairy industry and its commitment to sustainable food systems…

Donald Moore: Sustainable food systems is a term very much de rigueur at the moment. We’ve been promoting the idea that you need to think about a food system in its totality. Some people started maybe six, seven years ago talking about sustainable diets. Yet diet is just one piece of the food system puzzle.

If you think about agricultural land around the world,  approximately 70 percent of agricultural land is regarded as marginal land. In other words, it’s not land where you can plough and plant beans, corn, wheat, or anything else. It’s land that only becomes part of a productive food system when it’s grazed. So, the way we make that a useful contributor to the food system is by grazing it, either with dairy cows or buffalo, goat, sheep, a herd of some form. Those animals then turn that land into nutritious food that humans can consume.

In many parts of the developing world, livestock ownership can be the difference between dietary security / nutritional security and nutritional insecurity. We as a sector remain concerned about some of the discussions that go on at the moment about plants versus animals. We need to leverage all the tools that are available to secure nutrition for future generations. That includes making sure that all of this marginal land is being used as optimally as possible. Food security requires both plants AND animals.

That doesn’t mean that we as a dairy sector have not got our challenges. We recognize our sustainability challenges and have done a lot of work to improve the sustainability performance and the sustainability credentials of the dairy sector.

What is the Global Daily Platform’s approach then to this commitment to sustainability?

Jay Waldvogel: Let’s start at the very beginning when the Global Dairy Platform was created nearly 15 years ago. At that point in time, we were, fairly, being criticized for our environmental footprint. There wasn’t a lot of attention globally on it and it wasn’t that dairy farming necessarily was consciously bad, we just weren’t being as consciously good as we could have been.

Donald Moore: Since GDP’s inception, we’ve been doing a lot of work on how we improve dairy’s sustainability performance.

Together with the global dairy sector, we developed the Dairy Sustainability Framework (DSF) to track 11 strategic criteria to report on the progress dairy is making in areas such as greenhouse gas emissions, animal care, water quality, soil nutrients, among others.

The really good news is that we are seeing continuous improvement in dairy’s sustainability performance. For instance, analysis conducted by FAO found dairy’s emission intensity, or the volume of greenhouse gas emitted per kilogram of product, declined 11% from 2005-2015.

GDP has also been tackling how best we can help the developing world improve similar to, or perhaps even more so than the so-called developed world. If you think about greenhouse gasses, from here in the U.S. or in Europe, we produce roughly 1.2 to 1.4 kilograms of greenhouse gas per kilogram of dairy product produced. In parts of Africa, that’s somewhere between 12 to 18 kilograms of greenhouse gas per kilogram of product produced. So we recognize the opportunity for us to enhance the practices in the developing world and in doing so, reduce the environmental impacts of the dairy sector as a whole while improving farmer livelihoods and farm outcomes.

Margaret Munene: The dairy industry is also truly committed to taking the United Nations Sustainable Development Goals (SDGs) from theory to reality.

Clearly, when farmers have cows, they have milk, which is nutritious and provides them with Vitamin A and protein, among other impactful nutrients. From the milk those farmers sell, they now have the capital to purchase other foods. A cow also, importantly, produces manure which farmers use to fertilize their land, to produce other crops.

So, dairy farmers are often not hungry farmers. I have seen it with the many farmers I work with; they have money in their pockets. They can do many, many things, and actually have better livelihoods. Because they have money, they can take their children to school. Then they have bank accounts and from them, can acquire micro-credit loans. They can improve their herds and therefore, their lives cyclically actually become much better.

I see dairy as a very important sector, driving sustainable development in the developing world and also in the developed world.

Jay Waldvogel: We have an incredible commitment to improving collectively as an industry across numerous metrics. I think if you were to talk to the people at the UN and other agencies about how dairy is pursuing this versus other sectors, you’ll find we’re quite ahead of the curve.

It doesn’t mean we’re perfect at it. It doesn’t mean we’ve got it all solved, but we know our challenges, we know what we need to do, and we’re really actively engaged in measuring and understanding how we can get better.

How has the COVID-19 (coronavirus) pandemic impacted the operations of the global dairy sector?

Donald Moore: In some of the more developed countries, there have been challenges to our value chain because of the amount of dairy product that was previously going into food service; in restaurants, hotels, schools, etc. So, in that channel, the impact has been significant.

On the other side of the coin, however, consumer buying at a retail level had increased quite markedly. It hasn’t made up for losses in the food service area, mind you.

It is difficult for the sector to transition quickly from making 25-kilogram boxes of shredded cheese intended for the foodservice channel, for example, to putting that cheese into consumer-friendly sized packages for retail shelves.

The developing world didn’t really feel the challenge in the same way that those in the more developed world markets did. In the developing world, their challenges were probably more around transporting milk to processing facilities and so on.

Jay Waldvogel: While we had this rather painful moment immediately after COVID-19 broke out here in the U.S., today, we’re actually seeing a forward trajectory that is in fact quite positive, as people are reintroduced to dairy, reintroduced to its flexibility and nutrition and are reintroduced to the fact that there’s an awful lot of dairy products that actually taste quite good!

Margaret Munene: I think for me, COVID-19 has shown us how fragile supply chains can be within the global food system. It has spotlighted that disruption in one link can hurt many other links of the supply chain. And this is not just relegated to the dairy industry. This is, I think, applicable to all sectors for food and nutrition, including meat, fruits, and vegetables.

We run a dairy processing company in rural Kenya, for example. There, we partner with 500 small-scale farmers. Notably, 85% of those farmers are women. We collect milk, process it to make yogurt, and send that yogurt to the very high-end markets of Nairobi. However, at the moment, Nairobi’s five-star hotels and major restaurants have almost come to a standstill. And therefore there has been market disruption throughout, especially for processing companies.

But all is not lost, because we remain adaptive and very innovative. The dairy sector is well-positioned for the future because we are dealing with a product with a high nutritional value and now, more than ever, we need nutritional products like milk to boost our immune systems.

Milk is safe, it is nutritious, it is affordable, and therefore, looking into the future and past COVID-19, though there has been a disruption today, tomorrow still looks bright for the dairy industry.

Where do you envision the global dairy sector in the future?

Donald Moore: I see the dairy sector becoming more effective, more efficient.

From an industry perspective, we really see a bright future for the role that dairy plays. Milk consumption around the world continues to grow at just under two percent per annum. When you consider the size of the dairy sector, two percent is enormous growth in terms of volume.

We’re also actively involved in an initiative we call, “Dairy Nourishes Africa (‘DNA’)”. The idea behind this initiative is to use the dairy sector in such a way that we can tackle the issues of childhood malnutrition.

About 30% of children under the age of five in certain African countries suffer from malnutrition and particularly stunting and wasting. Wasting you can recover from, with appropriate intervention, but stunting is something that has very long-term effects.

Making sure that a child under the age of five has adequate nutrition and high-quality protein in their diet is extremely important to alleviate stunting. We’re looking at how we can use the dairy sector to help tackle those kinds of issues of malnutrition.

We have a series of pilots, which we’ve just literally in the last few weeks signed off on, which will happen in Tanzania and those pilots are intended to enhance the productivity of the sector, make milk more available locally, and for it to then be directed into school nutrition programs.

[To Margaret’s previous point], we are focused on the United Nations Sustainable Development Goals (SDGs) and how the dairy sector can help to address those key challenges. With regard to our ongoing collaboration with FAO, we [GDP] developed a research paper in conjunction with them 18 months ago about the impact that the dairy sector has on reducing poverty, which is SDG-1. Earlier this year, GDP again collaborated with FAO to publish a paper on SDG-2, emphasizing dairy’s role in ending hunger.  And we’re in the process at the moment of preparing a paper on the impact that dairy has on disadvantaged groups; in particular, women and youth, and the role that dairy can [and already] plays in reducing inequalities.

So, there’s quite an active role that we think the dairy sector can take in helping to deliver on some of the key issues that are affecting society at large.

Jay Waldvogel: Dairy will play a lead role going forward. The question is, how big a role?

If dairy continues to improve on its environmental footprint, and I believe it will, if we can help explain to people the holistic impact dairy provides, this food system approach where you take into account, not just the impact you have environmentally, not just the nutritional benefits you bring, but those greater, critical societal issues, those economic issues, then dairy has an opportunity to remain a vital part of society going forward.

Margaret Munene: When you consider all that dairy provides, the nutrition and its health benefits, serving as a driving force for social and economic development in the process and taking into account further the progress that the sector is making in terms of reducing its impact on the planet; for me, I see the future of dairy looking extremely positive.

Dairy is a critically important sector in many ways; I really can’t imagine a future without dairy.

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“BUY LOCAL” WOULD EVEN SPOIL FARMERS MARKETS

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The Locavore’s Dilemma

I live in Madison, Wisconsin, home of the exceedingly vibrant and sort-of-famous Dane County Farmers’ Market. Every Wednesday and Saturday, thousands of people—myself included—descend on downtown Madison to peruse and purchase fresh fruits and vegetables, baked goods, meats, cheeses, canned jams and pickles, arts and crafts, and even artisanal soaps. The city prides itself on its loyalty to local farmers and merchants.

Yet what at first blush seems a quintessential expedition of “buy local” greatness isn’t actually local at all. The Dane County Farmers’ Market belies its titular jurisdictional limits. Purveyors arrive in the wee hours of the morning from all corners of the state. Take, for instance, the Door County Fruit Markets company, which sells apricots, raspberries, strawberries, and blackberries. They hail from Door County, a three-hour drive across the state from Dane County. There’s also Canopy Gardens, producers of four varieties of salsa, whose home base is in the north central part of the state, separated from Madison by no fewer than six county lines. These are but two of many examples. Indeed, only a modest percentage of the venders come from within Dane County.

And then there are the buyers. Young people, old people, families, and businesses drive from all over Wisconsin to pick out the perfect tomato or to sample some of Stella’s famous cheese bread. Neighbors from Minnesota, Iowa, and Illinois likewise frequent the market. (Don’t forget, either, about the innumerable inputs that go into the farming process — tractors, irrigation systems, gasoline, the farmer’s morning coffee, and so on — that originate beyond the county boundary.)

 

The market’s popularity, variety, energy owe themselves to trade and to quality—not to locality.

 

If the Dane County Farmers’ Market were truly limited to local, its vivacity would be severely diminished. Plump, juicy cherries from three-hour-away Door County? Forget it. Salsa from Canopy Gardens? Sorry, they’re not “local.” Thankfully, we all recognize this as absurd. And we all recognize that drawing the line at the county is arbitrary. The market’s popularity, variety, energy owe themselves to trade and to quality—not to locality.

Foodstuffs—and in particular, produce—present fertile ground for undue emphasis on “buy local.” Often, the farmers relatively close to us will be able to provide higher quality produce, simply because of the short transportation time between harvest and market. Of course, soil and climate also influence quality, and nearby corn might be better than corn from a half a world away. Then again, though, you don’t hear anyone in Wisconsin championing local bananas.

Buy Best

The farmers’ market anecdote illustrates the crucial distinction between “buy local” and “buy best.” At first glance, the distinction appears merely semantic. Buying local because local is the best makes complete sense economically and socially. But buying local for the sake of buying local presents a philosophy steeped in isolation that falls dangerously close to tribalism. It advocates the contraction of trade and flies in the face of two centuries of liberalization and globalization of the economy.

 

Like the county line, the national boundary is completely arbitrary from an economic perspective.

 

Liberal, global trade has led to the vastest prosperity the world has ever seen. Adam Smith once wrote, “In every country it always is and must be the interest of the great body of the people to buy whatever they want of those who sell it cheapest.” The less trade is restricted between individuals and across borders, the more “the body of people” can “buy whatever they want” the “cheapest.” In the 240 years since, increased trade and globalization has corresponded with a never-before-seen rise in prosperity. As society becomes more integrated, its members can leverage the division of labor, leading to lower prices, better goods and services, and a higher standard of living for everyone. It’s true that free trade and globalization make the rich richer. But they also make the poor richer. Trade provides cell phones to people in developing countries. It increases wages. It fosters international peace. As I have written before here and here, trade has made our modern lives what they are.

So it is one thing to personally live according the “buy local” rhetoric, boxing yourself in with higher prices and lower quality. But is quite another thing when the “buy local” rhetoric becomes enacted in law. The obvious harms that would befall a county-only farmers’ market are the same exact harms that policies of protectionism inflict upon nations and their residents. Like the county line, the national boundary is completely arbitrary from an economic perspective. National protectionism is simply “buy local” on a larger scale.

The original article can be accessed at FEE.org.

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Joseph S. Diedrich is a student at the University of Wisconsin.

This article originally appeared on TradeVistas.org. Republished with permission.

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Archives, Global Trade Daily, International Trade

NEBRASKANS SUPPORT TRADE BUT TRUST IN MEDIA AND WASHINGTON IS LOW

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A new survey of Nebraskans finds that citizens appreciate trade’s benefits, especially for farmers and ranchers, but want more reliable information about trade policy.

Anxious but confident: the more international trade the better

Nebraskans surveyed are anxious about the economy but confident with respect to the importance of trade to their state’s agricultural production complex.

Released last month by the Carnegie Endowment for International Peace and the University of Nebraska-Lincoln (UNL), the new report, “U.S. Foreign Policy for the Middle Class: Perspectives from Nebraska,” assesses state views about how U.S. foreign policy interacts with the economic wellbeing of the middle class in the nation’s heartland. The research team interviewed over 130 Nebraskans in six communities across the state in the summer of 2019 (before the economy was further affected by the coronavirus pandemic) to gauge their perceptions.

Whether respondents hailed from urban Omaha or rural Scottsbluff, and whether they worked directly in agriculture or in health care, local government or education, those interviewed were remarkably consistent and clear on the subject of trade policy and the state’s agriculture sector: the more international trade, the better.

Focus Group Cities

The big picture is not the only picture in the Nebraska economy

Macro-level statistics obscure the importance of Nebraska’s agriculture sector. The Bureau of Labor Statistics reports that manufacturing contributes more than twice as much as agriculture to Nebraska’s GDP (10.9 percent versus 4.9 percent, respectively). But within manufacturing, “food and kindred products” is the top category. The broader agricultural production complex includes processing but also transportation, warehousing, agriculture-related research, and other professional services such as IT, legal, insurance, and financial.

Thus, while Nebraska has a diversified economy and workforce, one in four jobs is directly or indirectly tied to the state’s agricultural production complex, according to UNL researchers. Some interviewees pointed to main street businesses like car dealerships as a barometer for agriculture, saying that farmers are more likely to purchase new cars or trucks when they have profitable years.

As the report notes, “Even if they do not hold one of those ag-related jobs, most Nebraskans likely benefit in some way from the revenues the sector generates. That may explain why so many of those interviewed, whether directly involved with agriculture or not, said they supported any trade policies that worked best for farmers, ranchers, and others associated with the agricultural production complex.”

Trade a most important foreign policy

Exports dominate the discourse on trade

The Nebraskans interviewed spoke about trade almost exclusively in terms of exports, perhaps not surprising for a state that consistently ranks highly in the production and export of many agricultural products from soybeans and corn to beef and beef products. Nebraska’s most important export markets are Canada and Mexico, U.S. free trade agreement partners.

The majority of those interviewed saw U.S. trade agreements as benefiting Nebraskan agriculture, in particular the U.S.-Mexico-Canada Agreement (USMCA) and the U.S. trade deal with Japan (as a second best alternative to the Transpacific Partnership, from which the U.S. withdrew in 2017). While many supported the President’s tough stance against China, they also worried about the potential for future lost market share due to shifting supply chains brought on by the trade war. In the voice of one interviewee, over the long run, the United States needs to “focus [more] on developing markets…and less…on picking a fight with China.”

The seeming invisibility of imports

Imports were rarely mentioned by those interviewed, whether from a consumer or supply chain perspective. Aside from one manufacturer who said that increased steel tariffs had put cost pressure on his inputs, most discussion of tariffs revolved instead around retaliation on U.S. agriculture exports, not the impact of U.S. tariffs on imports. This is not surprising: exports are celebrated in news releases and headlines. Import data is portrayed in the negative light of trade imbalances. Imports of intermediate goods make up 60 percent of global trade by some estimates, but in the form of parts and components for the production of final goods, they lack visibility.

U.S. import tariffs have likely affected consumer prices to some degree. In research prepared for the Yeutter Institute by Edward Balistreri of Iowa State University, tariffs imposed in 2018 and 2019 as part of the U.S.-China trade war may have cost Nebraska’s households as much as $600 per year through a combination of lost export opportunities, increased productions costs, and increased consumer prices. A potential doubling of tariff costs on imported items theoretically risked households near the lower bounds of the middle-income range falling out of the middle-income bracket while those tariffs were in place. Despite being a pocketbook issue, the cost of imports was notably absent as a topic of discussion across interviews.

View on China engagement

There is more than one “heartland”

The Carnegie Endowment conducted similar interviews and focus groups in Ohio in 2018 and Colorado in 2019. There are important nuances among and within these three states. On trade policy, Nebraskans were far more aligned in their views than Ohioans.

Nebraskans tend to view agriculture as the backbone of the state’s economy, leading to more consistent opinions on the beneficial role of trade. Ohio has a much larger manufacturing workforce that has experienced heavy losses in recent years, with trade policy and globalization often taking the blame. This perception has led to deep divisions over trade policy among those interviewed in Ohio.

In comparing the three states, the report notes that such “place-based economic considerations appeared to drive attitudes on the intersection of U.S. foreign policy with the perceived economic interests of America’s middle class.”

“I don’t trust Washington”

Unfortunately, where participants in all three states did seem to agree was in their mistrust of institutions and their sources of information regarding foreign policy.

Project participants consistently said they did not trust the news media or official Washington to provide unbiased information about trade and foreign policy. As a result, many said they do not always feel they have enough knowledge to develop well-informed opinions. They also do not believe that decisions about foreign policy are made with middle America’s economic interests in mind.

One Nebraska participant illustrated a common sentiment in expressing, “I don’t think anybody knows what the truth is and I don’t …trust Washington to tell me what the truth is.” If participants wanted to learn more about trade and foreign policy, they often said they did not know where to find trustworthy sources of information.

Quote about trust

How to amplify middle-class voices?

At a time of intense debate over what the aims of U.S. trade policy should be, such depth of perspective from Americans across the country is important. Do we need new structures to gather it?

The Office of the U.S. Trade Representative formally seeks public comment as part of its process to determine negotiating priorities and statutorily maintains 26 advisory committees to make sure U.S. negotiating objectives “reflect U.S. public and private sector interests.” The advisory system includes a committee designed for input from state and local level leaders. Yet these structures are neither visible nor accessible to most Americans.

Elected officials may of course offer input outside of these constructs. Nebraska Governor Pete Ricketts gave an example on an episode of the Yeutter Institute’s Trade Matters podcast:

“When there was a rumor that the United States was going to pull out of the South Korean Trade Agreement, I picked up the phone on a Friday afternoon to call our U.S. Trade Representative, Ambassador Lighthizer, to tell him how bad that would be for Nebraska,” Governor Ricketts said.

“He called me back on Sunday afternoon, so very responsive…he doesn’t always tell you what you want to hear, but certainly wanted to listen as I was talking about why South Korea was such an important trading partner.”

Place-based trade policies?

Governor Ricketts’ comments and the report findings reinforce a central conundrum of trade policy: it has disparate impacts on the economies of different U.S. states.

In their pursuit of the national interest, foreign policy professionals, including trade negotiators, understandably do not want to pick winners and losers or wade into domestic politics. But integrating more information about the economic experience of middle-class Americans into the trade policymaking process can help inform policy options that anticipate the losses — and local opportunities — from trade policy.

Meanwhile, what about those who said they wanted to learn more about trade and foreign policy, but did not know where to find information they could trust? They also reported that locally trusted leaders can play a key role in how people think about policies. Perhaps such leaders are a starting point for deeper conversations about trade.

Related in the series by The Carnegie Endowment on U.S. Foreign Policy for the Middle Class:

-Perspectives from Colorado

-Perspectives from Ohio

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Jill O'Donnell

Jill O’Donnell is a professor of practice and the director of the Clayton Yeutter Institute of International Trade and Finance at the University of Nebraska-Lincoln. She is the host of the institute’s Trade Matters podcast. She served on the research team for the report discussed in this article, along with colleagues from the University of Nebraska-Lincoln’s Bureau of Business Research and the University of Nebraska Public Policy Center, in partnership with the Carnegie Endowment for International Peace.

This article originally appeared on TradeVistas.org. Republished with permission.
Argentina
Archives, Foreign Trade Zones, Global Trade Daily, International Trade

ARGENTINA APPLIES OVER 500 EXPORT DUTIES – HOW’S THAT WORKING OUT?

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Argentina is no stranger to economic crisis. Nearly 600 different export taxes aren’t helping.

Argentina is no stranger to economic crisis. Before the spread of the COVID-19 pandemic, Argentina was experiencing more than 50 percent annual inflation, among the highest in the world. The IMF recorded a 2.5 percent drop in Argentina’s GDP in 2018, which shrank another 2.2 percent in 2019, throwing some 40 percent of the population into poverty. With a debt-to-GDP ratio of almost 90 percent and facing economic contraction of as much as 5.7 percent this year, Argentina’s government stands at the brink of its ninth default on international loans.

How could it get worse?

Trade restrictions can reinforce poor economic outcomes. As reported to the OECD, Argentina introduced, increased or expanded 585 different export taxes between 2000 and 2012. Hitting its farmers hard, Argentina’s new government recently increased export taxes on agricultural commodities. Export taxes on soybeans, soy oil and soy meal increased from 25 to 33 percent, while the taxes on exporting corn and wheat were raised to 12 percent from around 7 percent.

Export taxes distort decisions about what and how much to produce, affecting the cost to produce and the price of the export. Whether the measure significantly affects the world supply and price of that commodity depends on the global market power of the exporting country. For example, Argentina is the world’s third largest supplier of corn and soybeans. To the extent that Argentina’s exports are deterred by the tax, supply in the domestic market could increase, driving prices for the commodity producer down but also creating an input subsidy for domestic producers that use that commodity. As a result of the distortive effect of export taxes on the price of traded goods, it is unsurprising that trade as a percentage of Argentina’s GDP is significantly lower than countries in its peer group of middle income countries.

Argentina 585 export taxes

So why have them?

It is more common for governments to restrict imports to try to protect domestic producers of goods that compete with imports. For example, restricting imports of bread might favor local bakers who could then sell their products at higher prices without fear of competition from foreign producers. Yet we know the cost of suppressing competition means consumers (companies and individuals) will pay higher prices.

In contrast, export duties are less common than import restrictions and have a different justification. Smaller, resource-limited countries sometimes apply export restrictions to a small number of products to ensure adequate domestic supplies or to lower domestic prices. As a major world exporter of agricultural products, Argentina’s export taxes are a way for the government to raise revenue and address its fiscal gap.

How’s it working?

Argentina requires export registrations and permits, while fully banning the export of certain commodities including scrap iron, steel, copper and aluminum. Export taxes vary but Decree 37/2019 issued in December 2019 sets a general rate at 12 percent, with exceptions. The incoming government has already adjusted the rates, increasing soybeans and soy products to 33 percent while reducing others such as rice from 12 to six percent, dry beans from nine to five percent. Others remained the same. Wheat, corn, sorghum, wine, fruits and vegetables are taxed at 12 percent, while beef and chicken at nine percent.

Heavy trade taxation has distorted and decreased the productivity of Argentina’s economy. Moreover, the duties create incentives for rent-seeking as businesses seek special exemptions or reductions in taxes. Special exemptions prop up businesses that may have otherwise failed, preventing workers and resources from moving to their highest-valued uses in the economy. Such outcomes follow the tenets of Adam Smith’s basic economic treatise, The Wealth of Nations: the result of price and trade intervention “can only be to force the trade of a country into a channel much less advantageous than that in which it would naturally run of its own accord.”

Argentina counter to WTO norms on export taxes

Argentina isn’t exempt from economic laws

Trade, Adam Smith went on to observe, is driven by “a propensity in human nature … to truck, barter, and exchange one thing for another.” Certainly, in Argentina this propensity is curtailed today by these restrictions that make it almost impossible for people to exchange goods and services abroad.

Economic laws are universal. Individuals in Argentina have the same creativity and entrepreneurial capacity as do people in other countries. An important way of helping to unleash that capacity would be for Argentina to remove all export and import duties without pitting sectors against one another.

In Argentina, policymakers believe that they can manage the economy better than the forces of market competition. But Argentina has spent more than a third of the last 70 years in recession. Global trade rules explicitly prohibit quantitative restrictions but permit export taxes under limited circumstances. Instead, Argentina uses them liberally and broadly. Eliminating them would enable free trade to spur economic growth.

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Agustin Forzani

Agustin Forzani is an MA student in the George Mason University economics department and MA fellow with GMU’s Mercatus Center. He received a BA in economics from the National University of Rosario in Argentina and a BA in Agribusiness from the National Technological University in Argentina.

This article originally appeared on TradeVistas.org. Republished with permission.

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Archives, Global Trade Daily, Imports/Exports

A SHORTAGE OF FARM GUEST WORKERS COULD THREATEN AMERICA’S HARVEST

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Harvest season is here

Right now, acres and acres of lettuce sit ready to be picked in California’s Salinas Valley – an area known as the Salad Bowl of the World. But who will harvest it?

The Golden State is an agricultural powerhouse, producing more than 400 commodities, including one-third of all U.S.-grown vegetables and two-thirds of our fruits and nuts. In 2019, California’s agriculture exports totaled $21.02 billion, ranking first among all states in the value of farm exports for the last twenty years. California’s almonds are a favorite of the European Union, its dairy products ship to Mexico, California pistachios travel to China, and the state’s high-quality rice is increasingly popular in Japan.

Spring means harvest season is here – or will be soon – for many crops in California and around the country, from asparagus to cucumbers to tomatoes and more. Thousands of workers are needed to pick these crops. And over the years, those workers have become harder and harder to find – a challenge that is being exacerbated by the COVID-19 pandemic.

Labor shortages cause farm losses

The American Farm Bureau Federation says that U.S. agriculture needs 1.5 to 2 million hired workers. These challenging, often seasonal, positions are essential to food production – but few U.S. citizens are willing to fill them. A California Farm Bureau Federation survey found that 56 percent of California farmers have been unable to find all the workers they need during the last five years.

While some farmers are shifting to labor-saving technologies, others can’t afford the expense of mechanization. And many of the high-value fruits and vegetables that California is known for must be harvested by hand to ensure their quality.

Given this chronic labor shortage, immigrants – most from Mexico – play an increasingly crucial role in our food system. Foreign-born workers can legally come to the United States to perform short-term farm labor under the H-2A Temporary Agricultural Worker Program, often referred to as the H-2A visa program.

56 percent cant find workers needed

Temporary labor through H-2A program

The Immigration Reform and Control Act of 1986 established the agriculture-focused H-2A program and a separate H-2B program for skilled workers in industries like healthcare and tech. The H-2A program is the primary way that U.S. farmers can legally hire immigrant labor from countries deemed eligible by the Department of Homeland Security (DHS). The process requires several steps and fees.

To participate, farmers must first receive a temporary labor certification for H-2A workers from the Department of Labor (DOL). This should be submitted 60 to 75 days before workers are needed. Then, farmers must file a petition to the DHS U.S. Citizen and Immigration Services (USCIS). After USCIS approves the petition, prospective H-2A workers outside the U.S. apply for a visa through the U.S. Department of State at a U.S. Embassy or Consulate and seek admission to the U.S. with the U.S. Customs and Border Protection (CBP) at a U.S. Port of Entry.

Open positions unable to fill

Rules are in place so that the H-2A program does not take jobs from domestic workers or lower the average wage. Before hiring H-2A workers, farm employers must demonstrate to the DOL that they are unable to recruit U.S. citizens for their open positions. They are also required to pay a state-specific minimum wage that may not be lower than the average wage for crop and livestock workers in their region during the prior year, known as the Adverse Effect Wage Rate.

Once approved, H-2A visa holders are allowed to work in the U.S. temporarily. The visa can be re-approved annually for up to three years. A worker loses their H-2A status if they leave their job. After a worker has three years of H-2A status, they are required to leave the United States for at least three months before applying to receive a H-2A visa again. The H-2A visa does not apply to a worker’s family members and does not give workers a way to gain permanent legal status. Unlike the H-2B program, there is no cap set on the total number of H-2A visas that can be granted each year.

number farmer workers exceeds visas

Greater need than visas

In 2019, nearly 258,000 immigrant workers were granted H-2A visas, with most working in Florida, Georgia, Washington, California, and North Carolina. Participation has jumped from 48,000 positions certified in 2005. However, the number of farm workers that are needed each year far surpasses the number of H-2A visas that are granted. Data from the U.S. Department of Agriculture (USDA) shows that the percentage of farm workers who are not legally authorized to work in the United States grew from 14 percent in 1989 to more than 50 percent in recent years.

While the H-2A program has grown in size, both farmers and farm worker advocates are critical of it. Farmers say it is a complicated, expensive process to navigate. Furthermore, year-round agriculture sectors like dairy farming, pork production or even mushroom farming can’t use the program since it is only available to seasonal industries. Labor groups argue H-2A needs reform to provide more protections to workers.

Agriculture’s workforce challenges recently received some attention on Capitol Hill. In December 2019, the full House of Representatives passed the bipartisan Farm Workforce Modernization Act (H.R. 5038). Among its many changes, the bill would make H-2A more flexible for employers and establish a new, capped program for year-round workers. It would also provide a pathway to permanent resident status for farm workers and include new enforcement measures. While the House’s passage of H.R. 5038 marks the first time that body has approved immigration legislation since 1986, the bill has not received a vote in the Senate.

The Trump Administration has also shown interest in updating the H-2A program, streamlining the application process on the USDA website. DOL issued a proposed rule in September 2019 that would update how the Adverse Effect Wage Rate is calculated, among other provisions. That rule has not yet been finalized. Additionally, in October 2019 the DOL issued a final rule to modernize the market labor test by allowing farmers to advertise jobs on a central online registry rather than a local print newspaper.

critical industry

COVID exacerbating labor shortage

Travel restrictions and government closures due to COVID-19 are adding to the concerns about America’s shortage of farm workers. The U.S. stopped processing non-emergency visas like H-2A in Mexico on March 18, 2020 out of health concern for U.S. Embassy employees. This immediately led to calls of alarm from agriculture stakeholders who are looking ahead to a busy spring and summer season.

The State Department later said it would continue processing H-2A applications and granted new flexibility so both new or returning workers would not be required to go to a U.S. consulate for an interview according to social distancing protocol. The DOL announced additional, temporary H-2A flexibilities in April 2020 to help prevent a labor shortage. However, governments around the globe continue to enforce travel restrictions to limit the spread of the coronavirus, potentially keeping workers from the harvest.

Some farmers are reporting that they are unable to get workers on time. In Canada, foreign workers have been delayed by border restrictions and canceled flights. Once they arrive, the Canadian government requires workers to be quarantined for 14 days (with pay) before they can begin work. The United States does not have a similar quarantine requirement but American farmers are concerned that fruit and vegetable harvests will still be impacted. Workers who have arrived are in the fields for longer hours due to the labor shortfall. Abad Hernandez Cruz, a Mexican farm worker in Georgia, told Reuters why he is working 12+ hours a day: “if the farm doesn’t produce, the city doesn’t eat.”

Agriculture is a critical industry

Agriculture has been deemed a critical industry during the pandemic. Americans are seeing firsthand the strengths and vulnerabilities of our complex food supply chain. One paradox is that farmers across the country have been forced to dump millions of gallons of milk and destroy millions of pounds of fresh food while some grocery store shelves go bare. The widespread closure of restaurants, hotels and schools has left farmers with no market for half of their crops due largely to the differences in Americans’ eating habits while quarantined at home.

So far, a lack of labor has not been a major force behind this food dumping. However, the situation could change if the pandemic persists longer into the harvest season or if farm workers begin testing positive for COVID-19. Farmers are also concerned that fewer workers will apply for H-2A visas over fears of catching the virus. Without enough workers, leafy greens, berries, and cucumbers would likely be the first crops to be left fallow, followed by peaches, plums, nectarines, and citrus.

The important role that guest workers play in ensuring America’s food supply during the pandemic underscores the interconnected nature of global agriculture trade. In reality, without H-2A and other immigrant labor, that romaine lettuce in Salinas would never make it to your salad bowl, or to other dinner tables around the world.

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Sarah Hubbart provides communications strategy, content creation, and social media management for TradeVistas. A native of rural Northern California, Sarah has melded communications and policy throughout her career in Washington, D.C., serving in government affairs, issues management, and coalition building roles in the agricultural sector. She is an alum of California State University, Chico and George Washington University.

This article originally appeared on TradeVistas.org. Republished with permission.

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Archives, Global Trade Daily, News

Growers Edge & CropX Partnership Addresses Farming Challenges

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Savings for water, fertilizer, energy, and labor costs are just some of the many added benefits farmers can anticipate following the announcement of an agriculture-focused partnership between Growers Edge Financial, Inc. and CropX. The strategic partnership addresses farming challenges head-on and solves complex issues through advanced technology solutions, including soil-sensing technology designed to eliminate crop-input costs through accurate, reliable data.

“The financial instruments available today do not meet the needs of farmers who want to embrace new ways to improve the profitability and sustainability of their operations,” said Joe Young, president and chief operating officer, Growers Edge. “Working with strategic partners like CropX, we are providing the incentive a farmer needs to confidently adopt new technologies that can drive their long-term sustainability and business success despite rising environmental and business challenges.”

Through a careful process utilizing CropX cloud-based technology and integrated in-field sensors, soil data and management is optimized and implemented based on analyzed data determining the precise amount of water specific to plant needs, ultimately boosting crop yields while maximizing opportunities in cost-savings and waste reduction.

“Giving farmers direct access to all of the intelligence below the ground empowers them to sustainably cultivate more profitable and productive farms by accurately predicting and managing crop needs. However, many farmers are hesitant to invest in soil sensing technologies after being burned by complex, expensive – and often even ineffective – technologies in the past,” said John Vikupitz, president, CropX. “Our partnership with Growers Edge will help farms of all sizes and budgets confidently embrace in-soil data technologies to modernize farm management.”

Beginning in 2020, the two companies will host a pilot program in which farmers can participate in that includes a Growers Edge money-back guarantee and irrigation practice prescription.