FARMERS ENCOURAGE MOVING FORWARD ON COLOMBIAN TRADE AGREEMENT

May 05, 2011  |  Today's News

Ratifying the U.S.-Colombia Trade Promotion Agreement will significantly improve market access for U.S. farmers in Colombia, the third-largest economy in the region. The Colombia TPA eliminates tariffs and other barriers on most agricultural products, increasing export opportunities for a range of Illinois’ agricultural products, including corn, soybeans, beef, and pork.

Illinois’ agricultural exports to all countries, estimated at $5.5 billion in 2009, supported about 46,200 jobs, on and off the farm. These export sales make an important contribution to the Illinois farm economy, which had total cash receipts of $14.5 billion in 2009.

U.S. agriculture exports to Colombia have fallen 50 percent since 2008 due in part to a disadvantage in the marketplace. Finalizing the free trade agreement will level the playing field immediately for many ag products, including feed grains like corn, but also provide increased opportunities for other valuable ag products like beef, pork and poultry.

Colombia is a regionally strategic market with exceptional growth potential for grains and other ag products like beef and pork. Its economy is projected to grow 4 percent annually over the next three years, and per capita income has grown steadily over the last decade. This has helped grow the country’s middle class and its buying power for pork, poultry and other higher value products.

This is leading to increased demand for feed grains to support the domestic livestock industry, yet the United States has been left behind as Colombia completed trade agreements with other global suppliers.

Sales of all U.S. agriculture goods to Colombia were $1.7 billion in 2008 but fell to $832 million in 2010. The U.S. Grains Council estimates, however, that Colombia could be a $1 billion market for the U.S. feed grains industry alone should U.S. grains have access to level playing field provided by the free trade agreement.

U.S. corn, for example, currently faces a system of variable levies that result in tariffs as high as 194 percent on some corn products. After the trade agreement is ratified, the variable system is eliminated and up to 82.7 million bushels of yellow corn can enter duty-free, and that figure increases 5 percent each year. Duties on U.S. corn exports over that amount are eliminated over a 12-years period.