AFF Sentinel Vol.3, #1Internal Politics as Baffling as International Politics With the long-awaited opening of the Japanese market, we bring to a close a tumultuous and eye- opening two-and-a-half year chapter for the U.S. beef industry. Despite the rapid expansion of world commerce, American cattlemen discovered international trade is affected as much by politicians and activists as it is by world consumer demand. Let's look at where we've been and what we've learned since the discovery of BSE North America in May 2003.
The nature of the BSE issue changed from a threat to a presence. Suddenly front and center in the news, threats to American consumers and to animal health and trade became real issues -- not potential problems. Most shocking was the willingness of activists within the industry to join radical activists outside the industry to make the issue a political football, with potentially devastating commercial consequences. Attacks on consumer confidence in beef by factions within the industry, led by R-CALF, OCM, WORC and others, have left scars that won't soon be forgotten. - The need developed for safe and realistic trading rules between countries with low incidence of BSE, as more of the world's major beef-producing countries were affected. As a world leader, the USDA took the lead in establishing such rules. R- CALF and its allies portrayed this updating of standards as "weakening" standards.
- Activist groups in countries around the world further challenged the "rights" of governments to regulate and conduct trade, as well as the rights of corporations to conduct business.
- Courts intruded on world trade in a way highly visible to the average feeder and rancher, as well as consumers. Luckily for cattlemen, consumers were satisfied by scientific evidence and their confidence in the USDA, and largely ignored the "threat." Organic beef producers and radical activists were disappointed
- Sadly, government authorities and politicians were unable to quickly deal with activists -- armed with lawyers -- and their unspoken agendas, selfish motivations and ancillary causes. The USDA handled the food safety crisis adroitly and effectively. However, it was helpless to ward off structural and monetary damage to the industry.
- We saw the effect of trade disruption on industry structure, including markets, packing plants and jobs. The results are permanent: a self- sufficient Canadian packing industry, lost American packing plants and their decreased demand for cattle.
- New political and activist alliances emerged that stretched the imaginations of many cattlemen. Long-time anti-beef activist groups, allied with trade unions and radical cattlemen's groups, were a phenomenon mainstream cattlemen found shocking and counterintuitive. The spectacle of a cattlemen's group defying established and proven science, embracing speculative and unreplicated experimentation and extrapolation, and serving as a credibility prop for avowed enemies of the beef industry, was unimaginable to mainstream cattlemen. Whether the radical cattlemen are serving as allies, credibility props or just mouthpieces, the effect to the public is to question the foundations of mainstream agriculture. These groups oppose trade among nations. They prefer the interaction as direct foreign aid in dollars to developing nations, not foodstuffs.
- The close vote on CAFTA served as a spur to both free traders and protectionists. Both were served notice that free trade -- once a slam dunk obvious avenue to increasing revenue through new markets -- was not so obvious to some. Opposition to trade and to an increasingly ordered but freer trade system through the World Trade Organization drew the attention of people beyond the rioting disrupters and their hired guns.
- New philosophical alliances between free trade and free market believers across national lines emerged. Free traders in Canada and the U.S., as well as Japan and the U.S., found they had more in common with each other than with their own countrymen. Such alliances became necessary in order to improve trade flows, while meeting increasingly strict requirements for animal health, food safety and consumer quality. Without those alliances, the economy would have reverted to isolationism (which cheats consumers and producers) and protectionism (which artificially raises costs and prices, cheating consumers again and shrinking markets for producers). Protectionism favors certain relatively small groups at the expense of the rest of the economy. Far from an improvement, such a stifled economy would be reminiscent of the late 19th and early 20th centuries, reviving economic, political and social struggles we thought were settled decades ago.
- The nature of the BSE issue changed from a threat to a presence. Suddenly front and center in the news, threats to American consumers and to animal health and trade became real issues -- not potential problems. Most shocking was the willingness of activists within the industry to join radical activists outside the industry to make the issue a political football, with potentially devastating commercial consequences. Attacks on consumer confidence in beef by factions within the industry, led by R-CALF, OCM, WORC and others, have left scars that won't soon be forgotten.
- The need developed for safe and realistic trading rules between countries with low incidence of BSE, as more of the world's major beef-producing countries were affected. As a world leader, the USDA took the lead in establishing such rules. R- CALF and its allies portrayed this updating of standards as "weakening" standards.
- Activist groups in countries around the world further challenged the "rights" of governments to regulate and conduct trade, as well as the rights of corporations to conduct business.
- Courts intruded on world trade in a way highly visible to the average feeder and rancher, as well as consumers. Luckily for cattlemen, consumers were satisfied by scientific evidence and their confidence in the USDA, and largely ignored the "threat." Organic beef producers and radical activists were disappointed
- Sadly, government authorities and politicians were unable to quickly deal with activists -- armed with lawyers -- and their unspoken agendas, selfish motivations and ancillary causes. The USDA handled the food safety crisis adroitly and effectively. However, it was helpless to ward off structural and monetary damage to the industry.
- We saw the effect of trade disruption on industry structure, including markets, packing plants and jobs. The results are permanent: a self- sufficient Canadian packing industry, lost American packing plants and their decreased demand for cattle.
- New political and activist alliances emerged that stretched the imaginations of many cattlemen. Long-time anti-beef activist groups, allied with trade unions and radical cattlemen's groups, were a phenomenon mainstream cattlemen found shocking and counterintuitive. The spectacle of a cattlemen's group defying established and proven science, embracing speculative and unreplicated experimentation and extrapolation, and serving as a credibility prop for avowed enemies of the beef industry, was unimaginable to mainstream cattlemen. Whether the radical cattlemen are serving as allies, credibility props or just mouthpieces, the effect to the public is to question the foundations of mainstream agriculture. These groups oppose trade among nations. They prefer the interaction as direct foreign aid in dollars to developing nations, not foodstuffs.
- The close vote on CAFTA served as a spur to both free traders and protectionists. Both were served notice that free trade -- once a slam dunk obvious avenue to increasing revenue through new markets -- was not so obvious to some. Opposition to trade and to an increasingly ordered but freer trade system through the World Trade Organization drew the attention of people beyond the rioting disrupters and their hired guns.
- New philosophical alliances between free trade and free market believers across national lines emerged. Free traders in Canada and the U.S., as well as Japan and the U.S., found they had more in common with each other than with their own countrymen. Such alliances became necessary in order to improve trade flows, while meeting increasingly strict requirements for animal health, food safety and consumer quality. Without those alliances, the economy would have reverted to isolationism (which cheats consumers and producers) and protectionism (which artificially raises costs and prices, cheating consumers again and shrinking markets for producers). Protectionism favors certain relatively small groups at the expense of the rest of the economy. Far from an improvement, such a stifled economy would be reminiscent of the late 19th and early 20th centuries, reviving economic, political and social struggles we thought were settled decades ago.
There is perhaps no greater example of the cost of isolationism and protectionism than China. With all its tremendous assets of natural resources, population and knowledge, China has been struggling for over 100 years to catch up with the rest of the world. There are those who constantly work counter to demands of the consumer marketplace. Their message is always, "Slow down, go back, don't change what we know." This attitude is directly opposite to today's worldwide mantra of, "We want what we want. We want more, better, faster, cheaper -- or we will go elsewhere." The message is that producers can make things more difficult, slower and more expensive if they wish, but consumers will either force an industry to adapt or flank the industry and choose other options. Changes in the marketplace can be expected to continually force new requirements on everyone. BSE has forced new age and source verification requirements on beef for Japan. In turn, domestic consumers may eventually want the same info for themselves. For our own needs, improving our product, age and source verification is a must. So what are the bottom line conclusions we can draw from two and a half years of trade and political turmoil? Existing trade and foreign markets must be continually safeguarded from external health and safety issues. We also must defend them from internal opposition. Political, legal and communication battles will be necessary. The price of inaction can be great -- in foregone dollars as well as industry structure. Fights for new foreign markets will become more difficult and more important. The potential is great. So also is opposition and funding from traditional activists and unions, and from radical allies within agriculture who oppose trade. Understanding underlying motivations and agendas will continue to be crucial. The AFF will do its best to keep you informed. |
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