AFBF releases report citing $5.3 billion in TPP benefits to American agricultureWritten by Saige Albert
On Feb. 23, the American Farm Bureau Federation (AFBF) joined Agriculture Secretary Tom Vilsack to announce the release of a new report quantifying the benefits of the Trans-Pacific Partnership (TPP).
“Over the course of the past few months, we have studied TPP, and we are encouraged by our findings,” said AFBF President Zippy Duvall. “We know it is important to our ag communities and to farmers and ranchers to open markets and have access to markets.”
AFBF’s research concluded that TPP will result in a $5.2 billion increase in ag exports annually for an increased $4.4 billion in the pockets of farmers and ranchers across the U.S.
“We think TPP will be positive for all commodities across the board,” Duvall commented.
Vilsack added that for every $1 billion increase supports 6,500 jobs, and the predicted $4.4 billion in increased incomes means support for an additional 30,000 good quality, high-paying jobs in the U.S.
Role of exports
“To put a fine point on the important role of exports in American agriculture, 30 percent of sales and 20 percent of farm income are directly related to exports,” Vilsack said during a media conference call. “It is important that we realize additional opportunities to expand the reach, quality, quantity, safety and affordability of ag products.”
Vilsack referenced a report by the Peterson Institute which showed that, by 2039, Americans would see an additional $357 billion in exports, a portion of which would be directed to agriculture.
“This would raise income for Americans by $131 billion,” Vilsack added. “The bulk of this would go to high-wage workers and farmers. Export-related jobs are indeed higher paying jobs.”
Further, the Peterson Institute Report noted that delayed implementation could cost the American economy $94 billion in lost opportunity.
“It is important to emphasize the passage of TPP and allow it to be implemented,” Vilsack said. “No country will receive more benefit than the U.S.”
“Until today, we didn’t have a documented review or study, but thanks to AFBF, we are prepared to share information about the importance of opening markets for ag products,” he added.
TPP will reduce 18,000 tariffs and taxes on goods and services provided by American companies, including farms and ranchers.
“We see benefits in TPP to livestock and dairy across the board,” Vilsack said. “We see the impact and effects on grain and feed, and fruits and vegetables have benefited from expanded trade and access.”
TPP breaks new ground in the realm of trade agreements by including provisions for sanitary and phytosanitary (SPS) rules, as well as biotechnology.
“This is the first trade agreement that addresses the importance of making sure that SPS rules are based on science and documented information,” Vilsack explained. “This is also an agreement that, for the first time, makes reference to biotechnology and the importance of having a uniform approach to biotechnology.”
The added language will be helpful in Asian markets, he noted, adding that a standardized regulatory process that doesn’t unfairly create barriers will be particularly essential in China.
Vilsack further said that access to biotechnology is important to provide for the growing world population.
“We are challenged in agriculture in the U.S. to continue to lead the world in innovation and continue to lead the effort to increase productivity in fields, on farms, on the range and in pastures to meet growing food demands,” he commented. “America must have the ability to get innovations to the market after appropriate study and review without unnecessary and unreasonable barriers as a result of politics.”
Science-based decisions will be essential to fair trade around the world, he noted.
Expanded world markets
TPP has the potential to harness growing world markets, said Vilsack.
“The Asian market is a growing market,” Vilsack mentioned. “It is home to 535 million middle-class consumers, and in 15 years, we expect that number to grow by 2.7 billion – 10 times the population of the U.S.”
Expanded market access means diversity of markets for U.S. agriculture, and Vilsack noted that diversity reduces the chance of overreliance on any one market.
He continued, “Ninety-five percent of trade activity in terms of growth and development occurs outside the U.S. It is essential for us to be engaged in active trade discussions and to play a part in this expanded trade.”
Action from Congress
While TPP is ready to be signed, the U.S. is awaiting action from Congress on the deal, which is costly to the American economy.
“We know that if we delay implementation by a single year, we look at a $94 billion hit, which will impact agriculture but also the other sectors,” Vilsack explained. “There will be continued requests to Congress to get this done. Any delay is costly.”