|News Report from Global
Comprehensive Analysis of NAFTA’s
7-year Record Documents Bitter Harvest of Broke Farmers and Higher
Consumer Food Prices
Farm Leaders Point to New Report’s Findings to Highlight Causes of
Growing Rural Opposition to Fast Track and Efforts to Expand NAFTA
WASHINGTON, D.C. — Farm incomes plummeted and bankruptcies escalated
in the U.S., Canada and Mexico—while U.S. food prices increased 20
percent—during the first seven years of the North American Free Trade
Agreement (NAFTA) according to a new study issued Tuesday by Public
Citizen’s Global Trade Watch.
The study found that contrary to promises and predictions at the time
of NAFTA’s 1993 passage, North America’s farmers and consumers have not
benefited from the pact—but many large agribusinesses have seen record
profits during the period.
A conservative Democratic Congressman from a farm district in
Minnesota and U.S. farm organization leaders joined Public Citizen today
for the release of the new report: "Down on the Farm: NAFTA’s
Seven-Year War on Farmers and Ranchers in the U.S., Canada and Mexico."
The 70-page study is the most comprehensive review of NAFTA’s
agricultural outcomes. It comes as President Bush launches an effort to
persuade Congress to provide to him a broad delegation of Congress’
constitutional trade authority through a procedure called Fast Track.
Bush seeks Fast Track authority to expand NAFTA to an additional 31
nations through a proposed agreement called the Free Trade Area of the
Americas (FTAA.) The study provides a substantive context for the
escalating political opposition to Fast Track and NAFTA expansion in the
On Friday, House Agriculture Committee Chair Larry Combest (R-Texas
withdrew his co-sponsorship of the GOP’s Fast Track bill after the Bush
administration listed as potential trade irritants some of the U.S. farm
bailout payments used to counter falling commodities and the declining
U.S. agriculture trade balance.
"In the past year, we noticed that wheat, soy, beef and other
producers who had been a base of support for trade deals really starting
to complain about how badly things were going since NAFTA," said Lori
Wallach, director of Public Citizen’s Global Trade Watch. "We understand
why farmers are so upset, because nearly every U.S. commodity has faced
a flood of new NAFTA imports swamping modest export gains, and prices
During debate over NAFTA, farmers were promised that new export
opportunities to Canada and Mexico would stabilize and reinvigorate the
economics of farm life. The reality has been quite different.
Independent farmers have seen commodity prices plummet and critical
domestic safety nets dismantled in the name of implementing NAFTA and
other export–oriented farm policies. For the past seven years, wheat
farmers in the Midwestern and Plains states; ranchers in Montana, Texas
and other states; flower and fruit growers in California; lumber mill
and timber workers in Louisiana, Arkansas and Washington; vegetable
growers in Florida and California, chicken farmers nationwide; and
others have suffered declining farm income while a flood of NAFTA
imports outpaced U.S. exports to Canada and Mexico.
Yet it was not farmers in Mexico or Canada who benefited from the
woes of U.S. farmers. Up to 15 million campesinos (peasant
farmers) throughout Mexico have lost a significant source of income and
are threatened with losing their small corn farms.
Among the report’s findings:
- During NAFTA, the rate of elimination of small U.S. farms with
sales under $100,000 was six times greater than in the preceding
- U.S. farm income is projected to decline 9 percent between 2000
and 2001—from $45.4 billion to $41.3 billion—compared to annual farm
income of $50 billion before NAFTA.
- While the U.S. agricultural trade surplus with Canada and Mexico
grew by $203 million between 1991 and 1994, it fell by $1.5 billion
- Instead of reaping special trade advantages with Mexico and
Canada, under seven years of NAFTA, the U.S. agriculture trade balance
with the NAFTA countries declined more rapidly—71 percent— than the
U.S.-world agriculture trade surplus, which suffered a 29.6 percent
Promises of new NAFTA export markets for U.S. farm products have
proved to be as elusive as NAFTA proponents’ promises of new U.S.
manufacturing jobs created by exports to Mexico. Between the 1994-95
growing season and the 1999-2000 season:
- U.S. corn export volume fell by 11 percent and prices fell
by 20 percent.
- The volume of wheat exports declined by 8 percent and
prices dropped 28 percent.
- The volume of cotton exports fell by 28 percent and prices
plunged 38 percent
- During the same period, even though the volume of soybean
exports increased 16 percent, total U.S. soybean crop value still
declined by 2 percent because the per-bushel price percent.
- In Canada, falling commodity prices meant that net farm incomes
declined 10 percent between 1989 and 1999, even though Canadian farm
- In Mexico, crashing commodity prices caused by a flood of imports
and the elimination of domestic farm programs have resulted in a
massive transfer of land from small farmers to large multinational
- Meanwhile, as farmers and consumers suffered, some giant
agribusiness and food companies made out like bandits, according to
the report. During NAFTA’s seven years, Archer Daniels Midland’s
profits nearly tripled—from $110 million to $301 million and ConAgra’s
profits grew from $143 million to $413 million.
"Given the track record of the NAFTA model for farmers and consumers
in the three NAFTA countries, it is not surprising that farmers
nationwide are increasingly opposed to the notion of expanding NAFTA
through the proposed Free Trade Area of the Americas," Said Public
Citizen President Joan Claybrook. "As bad as NAFTA’s seven years has
been in the United States, the results for poverty-stricken Mexican
farmers and consumers is horrific and puts to rest that myth that these
trade deals benefit people in developing countries."