Ag Policy Blog

It may not be a consensus on the importance of the Trans Pacific Partnership to agriculture but it's the next best thing.

A group of 225 food and agriculture companies and associations said in a letter to congressional leaders Monday that swift passage of the TPP is critical to the industry.

The list includes a who's who of national agricultural groups as well as state-level groups, representing nearly all sectors of the agriculture economy, from the National Cattlemen's beef Association, to the American Farm Bureau Federation, to Hormel Foods, to the Texas Cattle Feeders Association, and nearly everyone in between.

The letter was sent to House Speaker Paul Ryan, House Minority Leader Nancy Pelosi, Senate Majority Leader Mitch McConnell and Senate Minority Leader Harry Reid.

"The TPP is critical to the livelihood of the U.S. food and agriculture sector because it will create conditions that encourage economic growth and increased employment in rural areas and throughout the supply chain," the letter said.

"Exports are fundamental to the success of the agricultural industry because 95% of the world's consumers live outside of the United States and 20% of U.S. farm income is from exports."

According to the American Farm Bureau Federation, TPP will boost annual net farm income in the United States by $4.4 billion. USDA estimates that every $1 billion of U.S. agricultural exports in 2014 provided about 7,550 American jobs throughout the economy.

According to USDA, U.S. food and agricultural exports reached a record $150 billion in 2014, supporting 1.1 million full-time civilian jobs, including 808,000 jobs in the non-farm sector. The agricultural export surplus helped to offset some of the non-agricultural trade deficit.

"While some tariffs remain, the overall TPP agreement successfully tears down many tariff and non-tariff trade barriers that currently hinder U.S. competitiveness, and prevent us from meeting consumer demand for high-quality U.S. food and agricultural products throughout the Asia-Pacific region," the letter said.

The group said the TPP would remove trade barriers with Asia–Pacific countries and allow better access to U.S. agricultural products.

"If we do not lead, we will simply fall behind as our competitors aggressively work to establish alternative trade agreements that place their agricultural interests at an advantage," the groups said in the letter.

The groups said that with net farm income at its lowest level since 2002, the costs of "inaction are too high" to ignore.

"The TPP presents a valuable opportunity for U.S. agriculture; one that we cannot afford to miss. TPP is important for the future of rural America, and we urge passage of TPP during this session of Congress," the groups said.

National Cattlemen's Beef Association President Tracy Brunner said in a news release cattle producers could not wait any longer to "level the playing field."

"Japan is our largest export market and our Japanese customers demand high quality U.S. beef," Brunner said. "However, due to the Australia-Japan Economic Partnership Agreement, U.S. beef faces a tariff that is 11% higher than Australian beef -- our leading competitor.

"That tax alone makes our beef less competitive and gives Australia's beef producers a significant advantage that has allowed them to capture over $100 million in additional beef sales at the expense of U.S. producers."

With the implementation of the Australia-Japan Economic Partnership Agreement in early 2015, according to a NCBA news release, the tariff rate on Australian beef exports to Japan immediately dropped from 38.5% to 28.5%.

"On April 1, 2016, that tariff again dropped to 27.5% and will continue to decrease every April until the tariff rate hits 19% in 2031," NCBA said.

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