Trade will be the catalyst to revive or maintain rural economies across the nation, including farm communities, said Louisiana Commissioner of Agriculture Mike Strain in an address at the Louisiana Technology and Management Conference, Feb. 14 in Marksville, La.
The annual conference is sponsored by the Louisiana Agricultural Consultants Association.
Strain said trade is where agriculture profits reside. In Louisiana, exports account for $8.3 billion, Strain said. “That’s one of every three acres.”
He said the impact of U.S. agricultural trade with just three countries, China, Canada and Mexico, is significant. “Exports to China account for $22 billion,” he said. “It’s $21.2 billion with Canada and $18.6 billion with Mexico.
“Most of Louisiana’s rice exports go to Mexico. And Louisiana cotton goes to Mexico and comes back to the U.S. Since NAFTA was signed, we have seen a significant increase in trade with Canada and Mexico.”
The tri-lateral trade agreement, makes a difference, he said, but admitted that negotiations “are complex. I’ve been to NAFTA negotiations and every point is a battle.
Strain said open markets are essential for American agriculture and for the U.S. economy. “Agriculture accounts for 9.3 percent of all U.S. jobs,” he said. “That’s 17.3 million full- or part-time jobs.”
He said U.S. exports currently stands at $133 billion of agricultural products. Ag imports are $113.5 billion. “Ag has a net ag trade surplus of $19.5 billion.”
He said Louisiana’s ag production has a substantial impact on the state’s economy. Forestry is a $3.6 billion industry, covering 14 million acres. The poultry industry tops $1 billion with 400 farms. Sugarcane comes in at $841 million, 1.2 million acres and 2,400 farms.
Soybean production accounts for $557 million, 216, 000 acres and 2,600 farms. Louisiana cotton is a $153 million enterprise, covering 140,000 acres with 284 farms.
“Cotton depends a lot on what happens in China,” Strain said. He noted that China is making changes, not only to its crop mix but also to industry, moving from a heavy reliance on coal to more natural gas.
“That increased use of natural gas takes away some fertilizer options for crop production,” he said. And that could mean importing more food.
Strain said aquaculture, cattle and feed grains also play important roles in Louisiana agriculture.
He said the Trans Pacific Partnership (TPP) would be a positive result for U.S. agriculture and noted that he is pleased that President Trump has indicated he may be willing to take another look at it. “TPP represents a large percentage of global GDP,” he said. He added that a TPP agreement would bring a substantial advantage to Louisiana.
He said trade, expanding markets for U.S. farm products, is the only way to push up commodity prices. He added that the recently passed tax law will stimulate domestic consumer spending. “With more money to spend, consumers will buy more food and clothing,” he said. “That will move the wheel of economy.”
He also expects infrastructure expenditures to help rural America. Priorities, he said, include expanding broadband internet into rural areas. Rural upgrades of waterways, highways and bridges should be included in infrastructure enhancement budgets.
“We have to fix infrastructure in rural areas,” he said.
Strain said a decline in rural economies has resulted in an exodus of young people. He said reasons for the departure of rural youth include lack of internet services (which also limits business activity), lack of job opportunities and training, and high student debt. Many move from rural areas to find employment that pays enough to repay those high student loans, he said.
He said the farm bill will not cover all issues critical to rural America, but he does hope for a new farm program that continues to address the needs of farmers and ranchers. “The most challenging aspect is the budget,” he said.
He said a continued commitment to conservation should be a focus of the farm bill. “Our natural resources are the foundation of the U.S. economy,” Strain said. “We need to embrace conservation. We need to fully embrace science and technology.”
Dr. Bill Richardson, vice president and dean, LSU AgCenter and College of Agriculture, echoed Strain’s concerns with farm bill budgets. He said the AgCenter budget has been cut by $30 million in the last few years.
“We can’t continue to do all that we have been doing,” he said. “We are reorganizing crop care so that a specialist covers several Parishes.”