Abundant Land Called US Advantage in Global Trade
Mar. 26, 1991
WASHINGTON (AP) _ Plenty of fertile land gives U.S. farmers the edge in selling grain and certain other commodities on the world market, an advantage that Agriculture Department analysts say could grow further under liberalized global trade policies.
Economists call it ''comparative advantage'' and refer to products that are made from a nation's abundance instead of those produced from scarce resources.
So, with plenty of land, the United States has been able to have a comparative advantage in some agricultural exports.
''Crops with high land-to-output requirements such as wheat, corn and soybeans figure prominently in the nation's agricultural exports but not in its imports,'' said a report by the department's Economic Research Service.
The report in the April issue of Agricultural Outlook magazine said that in 1987, the most recent year studied, each $1 million of agricultural exports used about 3,500 acres of harvested crops.
Agricultural imports, on the other hand, used less than 800 acres for each $1 million worth of product such as meat, sugar, spices, wool, fruits and vegetables - high-value items that require less land.
Put another way, U.S. agricultural exports used about 118 harvested acres per worker, compared with 26 acres per worker for the imports.
''Because low-income nations, as well as the U.S.S.R., tend to import land- intensive products, efforts that address developing nations' debt burdens and other economic problems are likely to lead these nations to increase their imports of land-intensive goods,'' the report said.
''If these markets grow, U.S. producers probably would supply a large share of those purchases,'' it added.
The land intensity of U.S. agricultural exports also underscores attempts to negotiate liberalized trade under the Uruguay Round of the General Agreement on Tariffs and Trade.
That is because exports provide an outlet for the productive capacity for the nation's farmland - the basis for the comparative advantage in grain and other important commodities.
''In the long run, freer agricultural trade would allow U.S. farmers to benefit more fully from this advantage, bolstering land values and farm income,'' the report said.
Some of the study's findings:
- U.S. agricultural exports totaled $29 billion in calendar 1987. An estimated 107 million harvested acres were used to produce these exports, equal to more than one-third of the total harvested acreage that year.
- Farm exports to Japan alone used nearly 19 million acres, and shipments to Western Europe required about 20 million. Sales to the Soviet Union and Mexico used 6.8 million and 4.4 million acres, respectively.
- Raw farm products accounted for the bulk of the harvested acreage used for exports, with food grains, feed grains and oil crops using more than three-fourths of the total.
However, U.S. exports of processed items used significant amounts of land. For example, manufactured feed and flour products accounted for more than 4 million acres, and vegetable fats and oils nearly 5 million.
- About 884,000 U.S. workers were used to produce U.S. agricultural exports in 1987. About 40 percent were farm workers, and 7 percent were in agricultural services. Those in food processing industries represented another 6 percent of the total.
Much of the supporting labor demand, however, occurred outside agriculturally related industries. About 19 percent, for example, worked in the transportation and trade industries. Another 28 percent were in other industries throughout the economy, such as petroleum refining and container manufacturing.
WASHINGTON (AP) - A recent refusal by Japan to allow a display of American- grown rice at a trade show has drawn a snarl from Agriculture Secretary Edward Madigan.
The Senate Agriculture Committee during his nomination hearing earlier this month got a promise from Madigan to ''fight like a junkyard dog'' for farmers in international trade.
Japanese officials forced the U.S. Rice Council to withdraw its display of American rice at an international food exhibition. Authorities said the exhibit violated Japanese food control law, which bans most commercial imports of rice.
Madigan, in a March 21 letter released Monday, told Japan's minister of agriculture, forestry and fisheries, Motoji Kondo, that American rice farmers were ''dealt a serious affront'' by the government's action.
''Many of them drive pickup trucks made by Isuzu and Toyota which were shipped from Japan,'' Madigan said. ''Now they believe that you refuse to accept their rice in payment for your trucks.''
Madigan said two of his daughters drive Japanese cars and that ''all of our homes have Japanese-made televisions, cameras, radio and even telephones.''
''This week my wife purchased a Panasonic vacuum cleaner at the same time that our products were being barred from an educational display in your country,'' he said.
Madigan, a former Republican congressman from Illinois, said he has received ''countless letters from American farmers and businessmen'' over the last several years asking why the United States continues to have open markets for Japanese cars, trucks and electronics when Japan's market remains so restricted for U.S. farm products.
Madigan said there are more than 2 million farmers in the United States and asked, ''Should they band together against buying Japanese products? Or, are we united in our goal of accomplishing liberal trade?''
WASHINGTON (AP) - Turkey production is still increasing, but only at about half the rate reported by the Agriculture Department a year ago.
Production in March is expected to increase about 5 percent from a year ago, and output for the first quarter may average 4 percent to 5 percent above the year-earlier mark, according to the department's Economic Research Service.
Turkey output a year ago jumped nearly 9 percent from the first quarter of 1989. Economists said growers ''appear more cautious'' since market prices dropped sharply late last year.