Washington Insider -- Tuesday

Food Industry Hurricane Damage in Puerto Rico

Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.

Some Ag and Food Policy Issues On NAFTA 2.0 Agenda in Ottawa

North American Free Trade Agreement (NAFTA) negotiators discussed food safety and animal and plant health issues on Saturday and Sunday as the third round of talks continue in Ottawa. "We're having some constructive discussions," Canadian chief NAFTA negotiator Steve Verheul said. "We're looking at 28 different negotiating groups at the moment."

Officials from Canada, Mexico and the U.S. will discuss agricultural market access issues Tuesday and Wednesday, but Verheul said he did not expect the U.S. to offer a proposal during this round for increased access to Canada's dairy market. Nor did Verheul think the U.S. would table proposals on auto rules of origin, investor-state dispute settlement and Chapter 19.

Trump Team Says March 21 Is Date It Can Sign Renegotiated NAFTA

The Trump administration said that was the date set after it officially notified Congress on Friday evening of expected changes to the trade remedy law as a result of the negotiation.

The notification is required under the Trade Promotion Authority (fast-track) law, which requires the U.S. Trade Representative (USTR) to notify key congressional committees of any potential changes to U.S. trade remedy law at least 180 days before a trade pact is signed.

The law also requires the administration to give Congress another notification 90 days before signing the agreement and to publish the text of the pact 60 days before signing. To have the deal ready to sign on March 22, USTR would also have to reach a deal in December and publish the text in January.

Washington Insider: Food Industry Hurricane Damage in Puerto Rico

Big storms nearly always damage ag systems if they come at a season when crops are still exposed in fields. In tropical or subtropical systems, like the one in Puerto Rico, crops are vulnerable for long growing seasons and the New York Times is reporting that Hurricane Maria that made landfall here as a Category 4 storm “stripped every tree of not just the leaves, but also the bark, leaving a rich agricultural region looking like the result of a post-apocalyptic drought. Rows and rows of fields were denuded. Plants simply blew away,” the Times says.

Now, local farmers are attempting to assess the damage — and to think about the future. The article cites Jose A. Rivera, a farmer on the southeast coast of Puerto Rico, who stood in the middle of his flattened plantain farm on Sunday and tried to tally how much Hurricane Maria had cost him.

The Times interviewed several farmers, who often repeated, “How do you calculate everything?” One said that “as far as he could see, every one of his 14,000 trees was down, and the yam and sweet pepper crops also were damaged. A neighbor, figures he is out about $300,000 worth of crops.”

In addition, the Times said, “there is no local food, nor any agriculture in Puerto Rico. And there won’t be any for a year or longer.”

“In a matter of hours, Hurricane Maria wiped out about 80% of the crop value in Puerto Rico — making it one of the costliest storms to hit the island’s agriculture industry in history” according to Carlos Flores Ortega, Puerto Rico’s secretary of the Department of Agriculture.

Across the island, Maria’s prolonged barrage took out entire plantations and destroyed dairy barns and industrial chicken coops. Plantain, banana and coffee crops were the hardest hit, Flores said. Landslides in the mountainous interior of the island took out many roads, a major part of the agriculture infrastructure there.

The island suffered a loss of perhaps $780 million in agriculture yields, according to the department’s preliminary figures. Hurricane Georges in 1998 wiped out about 65% of crops and Hurricane Irma, which only grazed the island, took out about $45 million in agriculture production.

For centuries, Puerto Rico’s economy had been based on agriculture, mainly sugar cane, tobacco and citrus. The economy had industrialized rapidly after World War II, sharply reducing agriculture production. However, recently, in part because of the current economic recession, investment has returned to agriculture and the industry grew three to five percent every year over the past six years, Flores said. A growing farm-to-table movement has generated optimism in recent years about an agricultural rebirth.

Still, Puerto Rico normally imports about 85% of its food, and now must buy much more overseas as local products like coffee and plantains are added to the list of Maria’s staggering losses. “Local staples that stocked supermarkets, school lunchrooms and even Walmart are gone,” Flores said.

Since other islands that export food to Puerto Rico, such as the Dominican Republic, Dominica and St. Martin, were also hit, the food supply could be even more precarious if the island’s other suppliers were also affected.

The hurricane’s impacts are extremely widespread, the Times says. Efrain M. Robles Menendez, a dairy farmer, said cattle ranchers had been hit hard, because not only was there major damage to the infrastructure needed to maintain the business, but the supply chain was also cut off. With stores closed and the power out, the dairy trucks have not come. “Since Wednesday, I have thrown out 4,000 liters of milk a day,” he said. “Come back later, and watch me pour it all down the drain.”

Some see the potential for something positive to come out of a disaster. Agricultural officials are hoping this will be the island’s chance to modernize its outmoded agriculture industry.

“Agriculture is the most vulnerable sector to natural disasters,” Flores said. “But it’s also the one that can have the speediest recovery, and it’ll be the great surprise in the Puerto Rican economy, because we’re going to come back stronger.

We had an antiquated agricultural infrastructure that maybe now is the opportunity to make it more efficient,” he said. “Now is the moment because we’re starting from zero. Maybe it hadn’t been done before because there was no way of financing it. We’re going to rebuild better this time.”

So, we will see. The losses across the Caribbean have been enormous and will take some time to recover—and likely will take considerable help from the United States in that effort. These efforts likely will compete with others across the region and across parts of the U.S. and may well be controversial. They should be watched closely by producers as they emerge, Washington Insider believes.

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