# CAFTA??



## djleye (Nov 14, 2002)

I know that I am looking at this from a very egocentric viewpoint as my father-in-law is a beet farmer, BUT, I am very concerned about CAFTA and the fact that George W. has said that CAFTA will pass if he is re-elected. I feel that this would be catastrophic for our region as a whole. There are untold billions at stake here and if the beet farmers aren't spending money there are many industries that would fail and it could have a serious dominoe effect for the Red River Valley.
I really do want to rehash everyones political views on everything else, I would like to get some views on CAFTA and does anyone know what the democratic view of it is, has Kerry made a stand one way or another. Please try and keep this thread to only CAFTA and not other platforms of the rep. and demos. (Please Bob)!! :wink:


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## gandergrinder (Mar 10, 2002)

I will walk across the hall and talk to the trade people that work on this exact issue some time this week and get the full scoop on the effects this will have on ND.


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## Ron Gilmore (Jan 7, 2003)

Dan for the most part what I have read and seen concerning this issue it amounts to about one days consumption of sugar in the US. It is opening other Ag related markets for wheat,cattle hogs and poultry grown or processed in the US for export.

The fear seems to be in that this will allow other trade agreements to be patterned off of this. I see this more as a political issue than one that will have any real impact on the market. Currently sugar has one of the highest subsidized commodity rates of all cash crops. My question has been at what level of profit do we hold one farm crop and depress another?

The other issue to consider is will in the long run be beneficial for the US and the populace or do we take the protectionist route and hurt other facets of the economy.

NAFTA is a prime example of overall national benefits, some industries and commodities have suffered while others flourished. Outscoring of jobs has been offset with in sourcing of better paying jobs that are generating more taxable revenue then what has been lost.

One needs to remember that the overall good of the nation is the job of our officials not just what is in our back yard.


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## djleye (Nov 14, 2002)

Ron, I am not so sure that removing sugar subsidies is the ticket Think how much money this region will lose. Add to that the amount of beet land that will be planted into wheat and beans and then those markets will be flooded even more. I am, as I said, getting a lot of my information from a beet farmer but he is a very reliable source. I also think that we SHOULD worry about things in our own backyard first. The sugar industry is fabulous for this region. I can't remember the exact numbers but it is unreal how much money is pumped into our region and the amount of people that re employed by the industry.


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## deacon (Sep 12, 2003)

Wouldn't it be interested to see how the economy of the US would change if there were not Government subsidies?

I know everything would cost the consumer a lot less!!

Pick any industry, take out the government subsidy and what do you have a less costly product for me and you.

Eliminate them all! No subsidies!

Look at it this way, why do we all buy products for the lowest price, in most casees? Too keep the money in our own pocket and spend how we see best fit.

The same amount of money would still be spent in the US economy it would be just that you and I as consumers would be spending more and the government less.

Oh Oh, here comes the government to get me.


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## Field Hunter (Mar 4, 2002)

Just out of couriosity. First you say "I know everything would cost the consumer a lot less". then you say, "you and I would be spending more and the government less". I don't have the facts on this and never was good at economics but it seems there's a little contradiction n your statements.

I'd have to say it would cost our region a lot more in terms of jobs and goods and services than anyone could imagine. Is the cost of cheap foreign sugar worth what we would pay in the long run?


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## deacon (Sep 12, 2003)

Consumers would be spending more because the government would need a lot less of our money!

Everything would cost less, therefore with us spending more we would buy more junk (decoys, fishing rods, golf clubs, boats, etc..).


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## Field Hunter (Mar 4, 2002)

Sorry. I just can't see you logic.......anyway back to the CAFTA thread. I'd still be interested if anyone else had a handle on this and where is Kerry's position on this?


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## djleye (Nov 14, 2002)

But then we have to decide if we want to be dependent on foreign production of these commodities. Do we think that South America is a stable enough place that there would be a never ending supply of sugar to the US. What if some dictator comes into power into whatever nation we start importing sugar from. Will we end up having to do something about it to keep the supply coming. Do we trust other nations to be our food supply. How easy would it be to taint our food supply from somewhere else. I don't know the answers but I do know that I am not for getting rid of commodity price supports. All that would be left is large scale corporate farms and the end of hunting would be on the horizon following the death of small American farmers!! It sounds good in theory but I am not quite sure you have thought through all the ramifications of no price supports. We would have Sams club and Walmart farms everywhere. uke:


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## gandergrinder (Mar 10, 2002)

Deacon,
I do agree that the money will go back into the economy. In my opinion, of course I'm not a big fan of govt allocation of money, its simply best to let the markets work. However, being dependent on crops from overseas makes me a little nervous. Thankfully there are people much smarter than me that figure these things out.


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## deacon (Sep 12, 2003)

I am just tired for government wasting your and my money, I do understand the importance of subsidies, especially in the Red River Valley and all of ND. Without it my life may not be as good.

However, I see on a regular bases all the money the government spends at ND military bases (rebuilding housing that if it were you or me, the current housing is fine), it is great for my employer but is it really in the best interest of tax payers as a whole, NO WAY!


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## djleye (Nov 14, 2002)

So Jed, Do you suggest we just go with the cheapest grain at whatever standard we set? I would think that there is still going to be some high priced commodities out there because we are not the only ones that subsidze our farmers. European grain is price supported and we would end up having to use some of the larger subsidized markets because there wouldn't be enough in the cheaper markets that pay people little or nothing to work the fields. If we are going to end up buying a price supported commodity anyway why not be from our own farmers where we can have the highest quality assurances??


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## Bert (Sep 11, 2003)

Government subsidies are a necessary evil. It is very simplistic to say that if the Government cut off the cash flow, that they would tax you and I less. In a vacuum, that might be the case but there is pressure where we live.
Foreign commodities aside, much of what keeps people on the farm in the US these days has to do with the use of tax dollars. Sad, but whatcha gonna do? Without them, Cargill and the other big conglomorates would have more power than they already do and then simply set their own prices. You wont have to worry about spending your money on shells and decoys...or taxes, it will all go to buying bread and milk.
Besides that, doing anything to upset the fragile situation that many farmers face these days is counter productive to that which you rely so heavily on those people for besides food...ACCESSABLE LAND.
You take the family farmer out of the picture and it becomes strictly business. You know, income like GO"S and leassers provide.
Providing incentives for set aside programs like CRP and wetland restoration along with subsidies that keep farmers on the farm is money well spent if you ask me.


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## Field Hunter (Mar 4, 2002)

I guess you never know when to expect the unexpected....couldn't agree with you more, Bert. When the big guys control all the land, they'll either post everything as NO HUNTING or they'll put the hunting up for bid to the highest bidder.


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## Whelen35 (Mar 9, 2004)

According to the ND ag stats that are put out every year, ND farmers went from an average of 5% return on investment (land, equipment) to 2.7% for 2003 sats the 5% is from 4 years ago. I think all people living in more rural states should be very scared of no farm safty net. Just think what properity taxes would be if a large portion of privet farm land went into state hands. It would no longer be part of the tax base for the state or for local schools. Take oil as an example. We have oil here, but we don't pump it because OPEC sets the price, and when the threat of them loosing oil sales, they lower the price just a bit to make it where we don't pump our oil. Now with several countrys haveing the policy of taking care of domestic needs first, and then selling surplus on the world market, what do you think would happen if we as a country got ourselfs into the position where there were so few farmers making a go at it that we could not meet domestik demand. Do you think they are just going to give us a deal because we are so well liked in the world? I farm, I know what I need to make things cash flow in my situation. I also know that not too many people would be willing to put their money at risk for a 2.7% return on investment. If you look at how we as american spend our money, soon China well be purchasing good from the mext third world nation. If we continue to purchase goods with price only in mind, they will have all of ours, and we will be working for them in exchange for food is some people with no forsight have their way. Sorry for the long rant, but people who speak about the farm economy and don't have the real facts bother me.


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## Ron Gilmore (Jan 7, 2003)

Whelen part of the drop on investment is a direct increase for land that has been linked back to the proliferation of non Ag purchases be it investment or recreation use.

Dan my point about taking care of our back yard is that we do need to look at it, but those making and working on these agreements cannot.

Case in point is the cattle producer wants new markets for his herd, so does the poultry farmer. So if we freeze the sugar imports and hinder the cattle and poultry are we helping anyone?

ND and MN and MT and other sugar beet region are not going away if CAFTA is adopted. However the net profit for some in these regions may go down but net profit for others would go up. I look at these things from a overall view. The biggest thing to remember is that they are all assuming worse case scenario and the fact remains that seldom do the worst case ever occur.


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## Perry Thorvig (Mar 6, 2002)

Bert,

Great to hear from you again. Good post. I like your common sense.


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## Whelen35 (Mar 9, 2004)

Ron I agree with you that some of the reduction of return on investment is due to land prices going for a higher price. But rember that we are speaking of people who are farming. Someone who purchases land for recreation is paying taxes, raising my taxes due to the increase in average land price (increasing my expences), and not someone who is reliant on support prices to make a liveing. As far a suger goes, we need it in the area or our local market will be very badly hurt. You must also take into consideration that when you talk of the funding for the farm program this includes the school lunch programs, aid to single mothers, and several other social programs that have little if anything to do with farming. There was more money handed out without as much a wimper to aid the victoms of 9-11 than was ear marked for farm payments. I am not saying that this money was not well spent, but when you hear the controversy with funding the farm program, it is not the farmers that are getting more, it is mostly social programs that are tacked onto the farm program. When compairing aid to 3000+ people who were directly effected by 9-11 and the millons who are effected by our food production, it makes you think. Again, this is just an example to make people think and put the costs of ag support into perspective.


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## gandergrinder (Mar 10, 2002)

Whelen,
We need to overhaul the way the price supports work. I hear from many farmers that it is better to have the crop fail than it is to have it be successful. Something is wrong in this situation. I also hear from alot of guys that they have to plow up wetlands and low lying areas because they need those acres to get the crop insurance payments, knowing full well that they will get little or no yield from these acres. That doesn't make sense to me either.

The US easily has the power to do to grain markets what OPEC does to oil prices but we refuse to starve people. Many countries are upset with the US because we flood the market with grain lowering prices to the point below their production costs.


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## Whelen35 (Mar 9, 2004)

Insurance payments are a very short lived thing. Your insurance values are directly related to what your proven yeild is. When you have a year of no production, it will very much affect how you insurance base would pay out. It is not a practice that would keep in business very long. I wish we had the power to set the price of our farm good in relation to the world market, but we have a cheap food policy here in the USA.


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## NDHONKER (Aug 6, 2004)

THIS IS THE SHORT VERSION OF HOW THE US SUGAR PROGRAM IS SUPPOSED TO WORK. EACH YEAR A SET AMOUNT OF SUGAR IS ALLOWED TO COME INTO THE US TARIFF FREE AND THAT AMOUNT COMBINED WITH WHAT WE PRODUCE HERE IS SUPPOSED TO KEEP SUPPLIES AT A LEVEL THAT KEEPS PRICES PROFITABLE. SOME YEARS TO MUCH SUGAR IS LET IN TARIFF FREE AND PRICES COLLAPSE AND SUGAR COMPANIES FORFIT SUGAR TO THE GOVERNMENT BECAUSE IT IT BELOW LOAN RATE. THE SUGAR PROGRAM OPERATES AS A NO COST PROGARM IF THE RIGHT AMOUNT OF SUGAR IS LET IN AND PRICES HOLD STEADY. CAFTA ITSELF WOULD NOT DEVISTATE THE INDUSTRY BUT IT WOULD SET THE BAR FOR ABOUT A DOZEN OR MORE COUNTRIES WAITING IN LINE TO GET A SHOT AT THE US MARKET. US GROWERS DO NOT RECEIVE PAYMENT FROM THE GOVERNMENT, (UNLESS TO MUCH SUGAR IS LET IN AND PRICES FALL), AND IT IS A GOOD PROGRAM IF IT IS RUN RIGHT. OF COURSE THESE OTHER COUNTRIES WANT ACCESS TO OUR MARKET THE WORLD PRICE I BELIEVE IS AROUND 5 OR 6c AND OUR PRICE IS AROUND 22. BUT WHAT THEY HAVE GOING IS THEY RECEIVE DIRECT PAYMENTS FROM THEIR GOVERNMENT SO WHEN THEY TAKE THEIR GOVERNMENT PAYMENT AND EVEN IF THEY GOT 15c FOR THEIR SUGAR IN THE US THEY WOULD BE TOTALY BLOWING US AWAY. IF ANY SUGAR REFORM IS TO BE DONE IT NEEDS TO BE DONE IN THE WTO AGREMENTS AND EVERY COUNTRY NEEDS TO BE ON A LEVEL PLAYING FEILD. IF WE ARE GOING TO CUT OUT SUGAR PROGRAMS THESE OTHER COUNTRIES NEED TO CUT OUT THEIRS AS WELL OR IT WILL NOT BE FAIR TO ALL SIDES. REMEMBER WE CONSUME 100% OF ALL SUGAR PRODUCED IN THE US, WE ARE NOT FLOODING THEIR MARKETS.
AS YOU CAN TELL I AM A BEET GROWER AND I FEEL PRETTY STRONLY THAT WE NEED TO DEFEAT CAFTA. SUGAR SHOULD HAVE BEEN LEFT OUT OF THESE TRADE NEGOTIATIONS AND BE DELT WITH ON THE WORLD LEVEL IN THE WTO. I GUESS THAT WAS NOT TO SHORT AFTER ALL.


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## Ron Gilmore (Jan 7, 2003)

ND thank you for underscoring the fallacy of protectionism. It boils down to the ideas like I said before of gloom and doom. Protect this industry put the others out there instead. Like I said before the sugar portion is 1% of total production. American cattle growers are looking at new markets when the Mad Cow embargo from Canada is lifted. They are currently receiving above average prices but do not have a Government program in place that protects them when the price of beef drops. Nor do the hog farmers. Yet a industry that does have protection is not supporting other Ag products.

I first and foremost do not want the sugar industry hurt nor jobs lost in the Valley. I also want cattlemen and other Ag producers to be able to stay on the land for social and economic and environmental reasons. Smaller operations do tend to be more environmentally friendly than larger operations. They also tend to help both local and regional economics because of the buying and spending habits. So in the overall picture the current proposal will not hurt the sugar in dusty but can and will help other Ag based producers with new markets since many of them do not have the safety net on price for their products that sugar and corn and grain growers do.


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