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State ag secretary says WTO approach might not be good for South Dakota
SIOUX FALLS, S.D. (AP)--A framework set by the World Trade Organization to agree to reduce farm subsidies in rich nations and tariffs in poor nations might not be good news for South Dakota, according to Larry Gabriel, state agriculture secretary.
"Typically, what most of these agreements have done is benefited other countries and not our producers," said Gabriel, who added that he was not familiar with the details of the framework.
Farmers do better in open markets, Mike Held of the South Dakota Farm Bureau said as he applauded the agreement struck last weekend in Switzerland.
But Dennis Weise, president of the South Dakota Farmers Union, said open markets benefit large commodity exporters more than farmers. "Multinationals get the benefit of increased trade. We get the negative of it."
The gloomy predictions apply only if South Dakota fails to promote itself, Gabriel said. "I've always felt that if we're content to compete at the raw commodity level, then trade agreements like the WTO agreement will always be adverse to us."
Innovative marketing can reverse that, he said.
If the United States wants more access to foreign markets, broader innovation is needed in the long term, according to Thomas Dobbs, an economist at South Dakota State University.
"In my view, this is an unsustainable policy," he said. "You cannot continue to give major kinds of income and price supports without some kind of supply controls."
Dobbs said if there are no limits on supply, farm payments will create surpluses and undercut prices in poor countries.
Perhaps programs limiting the supply, such as set-asides, could be resurrected, he said. Also, shifting government payments into environmental programs that take sensitive land out of production could help, Dobbs said.
In a release, Sen. Tom Daschle, D-SD, said he has asked President Bush to order the U.S. trade representative to rescind an offer to cut subsidies and safety net programs for corn, soybeans, Wheat and other crops.
Date: 8/26/04
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