Trade Sanctions Best for Farming and Ranching Families

Mar 19, 1999

COMBEST CALLS LIFTING TRADE SANCTIONS BEST FOR FARMING AND RANCHING FAMILIES

U.S. House Committee on Agriculture Chairman Larry Combest (R-TX) declared that U.S. foreign policy should not use food as a weapon that backfires on the American farmer and rancher.  There are four countries where the president has administrative authority to modify sanctions affecting agricultural goods.  Combest on Friday called on the Clinton Administration to modify agricultural sanctions placed on Iran, Libya, North Korea and Sudan.  USDA estimates that U.S. trade sanctions on these countries reduced U.S. agricultural exports by at least $500 million in 1996.

Combest called for American interests to come first in foreign policy.

"Not only do embargoes and sanctions destroy the United States' reputation as a reliable supplier, but the dictators and generals still squeeze all the food they want out of their starving populations," said Combest.  "About a third of U.S. farming and ranching incomes is earned by selling overseas, and nearly 40 percent of what they produce feeds the needs of people in those countries.  For American farmers and ranchers, trade is an essential part of our nation's livelihood.  After producing first for America's needs, the balance of the harvest is sold and exported as a positive cash flow in the U.S. balance of trade," said Combest.

Currently, exports account for 30% of U.S. farm cash receipts, while nearly 40% of all agricultural production is exported. This year, USDA estimates that agricultural exports will be less than $50 billion — an amount that is $10 billion less that the value of our agricultural exports in 1996.  The U.S. agricultural trade balance for 1999 is estimated to be $12 billion, the lowest since 1987.

Chairman Combest noted several reasons for U.S. trade losses: low commodity prices around the world, reduced volume of exports (poultry, fruits and vegetables) and the Asian financial crisis.  Particularly, Combest pointed to previous embargoes and sanctions that continue to have an impact on American trade.

"U.S. agriculture remembers the 1980 Soviet grain embargo when our wheat farmers not only lost sales, but markets that they never fully recovered.  France, Canada, Australia, and Argentina stepped in and sold wheat to the former Soviet Union.  The only people hurt by those sanctions were U.S. wheat farmers.  In the arsenal of diplomatic solutions, cutting off your nose to spite your face is not a smart option."

###