Korean FTA & Agriculture

The American Farm Bureau Federation (AFBF) estimates when the Korean-U.S. Free Trade Agreement (FTA) is implemented, it will result in an increase in U.S. agricultural trade of $1.8 billion annually. Some the benefits for U.S. agriculture according to the U.S. Trade Representative are:

• Nearly two-thirds of current U.S. farm exports to Korea will become duty-free immediately, including wheat, feed-grade corn, soybeans for crushing, hides and skins, cotton, plus a broad range of high value agricultural products, such as almonds, pistachios, bourbon whiskey, wine, raisins, grape juice, orange juice, fresh cherries, frozen French fries, frozen orange juice concentrate and pet food.

• U.S. farm products with two-year tariff phase-outs include avocados, lemons, dried prunes and sunflower seeds.

• U.S. farm products with five-year tariff phase-outs include food preparations, chocolate and chocolate confectionary, sweet corn, sauces and preparations, other fodder and forage (alfalfa), breads and pastry, grapefruit and dried mushrooms.

• U.S farm products that will benefit from expanded market access opportunities through tariff rate quotas include skim and whole milk powder, whey for food use, cheese, dextrins and modified starches, barley, popcorn and soybeans for food use.

• Market access was expanded for beef and pork products, pears, apple, grapes and oranges.

Food Safety Bill Concerns Filed — A number of agricultural organizations have written the House of Representatives leadership to state their strong concerns with the Tester/Hagan provision in the Senate-passed Food & Drug Administration (FDA) food safety bill. This provision exempts facilities and farms with less than $500,000 in sales and delivery to destinations of 275 miles or less. The groups said, “By exempting processors and producers based solely on size, location and proximity to markets, these provisions create an arbitrary standard for food safety that actually weakens our ability to safeguard the nation’s food supply. Consumers should be able to rely on a federal food safety framework that sets appropriate standards for all products in the marketplace, no matter the size of the producing entity.” Those signing the letter included the American Farm Bureau Federation, American Meat Institute, National Cattlemen’s Beef Association, National Chicken Council, National Council of Farmer Cooperatives, National Meat Association, National Milk Producers Federation, National Pork Producers Council and the Produce Marketing Association.

Final Competition Workshop Staged — The last Department of Justice (DOJ)-USDA competition workshop was held in Washington, DC with the focus on margins at various levels of the agricultural supply chain. There were four panels composed of producers, academics and other industry representatives. The panels focused on supply chain issues that impact producers, processors, retailers and consumers; dairy supply chain; retailing sector trends and incentive relating to supply arrangements, product replacement and consumer choice; and trends in the beef, pork and poultry industries regarding retail dollar, possible explanations for changes and the margins in which the market participants operate. A great deal of discussion centered on consumer demand and its influence in the marketplace.

P. Scott Shearer
Vice President
Bockorny Group
Washington, D.C.