Farmers for Free Trade (FFT) which claims to be supported by thousands of farmers and agricultural businesses and leading representative groups like the American Farm Bureau says more than 20 per cent of US farm income comes from agricultural exports.
FFT launched a new campaign with targeted television advertising last week urging President Trump to protect free trade policies that support and benefit American farmers.
FFT is also launching a ‘Voice of the Farmer’ campaign that will allow US farmers to record a similar type of video clip expressing support for trade and to call on their lawmakers to work with President Trump to maintain and expand export opportunities for American agriculture.
“Farmers are increasingly worried about what they are seeing from Washington DC on trade,” said FFT co-chairman and former Montana senator Max Baucus.
“When the US engages in a tit-for-tat fight with our trading partners, farmers pay the price.
“While we need tough trade enforcement, we need to be smart about avoiding global trade fights that hurt American agriculture.”
FFT said President Trump’s most recent trade move – to impose a 25pc tax on imported steel and 10pc on imported aluminium – would “cause retaliation that will come out of the pockets of American farmers”.
“History shows that these types of tariff fights escalate with our trading partners and result in farmers paying the price in the form of higher tariffs on the products we export,” it said.
“We’ll also see the price of ag equipment and inputs increase.
“In the weeks and months ahead, FFT will be leading the fight to show the harmful impacts of these tariffs for our farmers and rural communities.”
Other groups expressed concerns about the impact of the steel and aluminium tariffs on critical export markets like China which have already signalled a retaliatory move on soybean imports and impacts on the North American Free Trade Agreement (NAFTA).
The US Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) said they were “extremely disappointed” in the decision to impose the tariffs.
In a statement, the two national farmer representative bodies said they had repeatedly warned that the risks of retaliation and the precedent set by such a policy have serious potential consequences for agriculture.
“It is dismaying that the voices of farmers and many other industries were ignored in favour of an industry that is already among the most protected in the country,” a statement said.
Washington Grain Commission chairman, wheat farmer and USW director Gary Baily said if the US stayed outside of the TPP, the impact on trade with the Japan market would see a phased in US$65 per tonne tariff reduction for participating countries, US market share for wheat would fall from 50pc to about 23pc, and a reduction of baseline futures prices of US$0.50 at a time when prices are already depressed.
“I have been raising wheat in Eastern Washington for almost 30 years and have seen wheat fall victim to political whims several times,” Mr Baily said.
“Looking back, however, I have not been as anxious about the future of our industry since the financial crisis of the 1980s.
“The divisive nature of the NAFTA negotiations and the conclusion of the above mentioned TPP trade treaty without the US cause concern about the long-term health of our profession.
“This is especially true for young farmers who may not have the equity or financial backing to weather these storms.
“Adding to the current trade environment is President Trump’s announcement that tariffs on steel and aluminium imports are being considered.
“The effects of those tariffs have yet to be quantified – and if enacted, agriculture exports will likely be targeted for retaliation.
“It is time for the President to consider the ramifications of his proposed tariffs and acknowledge the positive contributions that our industry has for trade, and re-engage in TPP.”
USW and NAWG have also written to the Trump administration highlighting that re-joining the TPP would help save the valuable Japanese market for US wheat farmers.
“Once TPP is ratified, US wheat exports to Japan will be at serious risk,” the letter says.
“TPP will reduce the effective tariffs that Japanese flour millers pay for imported Australian and Canadian wheat over nine years from about US$150 to about US$85 per tonne.
“Effective tariffs on imported US wheat would remain at about US$150 per tonne.
“Loss in market share and its negative effect on farmgate prices are likely to come much sooner, as Japanese millers reformulate their product mix to avoid the need to purchase artificially expensive US wheat.
“Lost market share is incredibly difficult to regain.”