Economy DA (ADI)

8/14/2019 Economy DA (ADI)

1/20

Arizona Debate Institute 2008 FellowsEcon DA /

Economy Disad Index

ECONOMY DISAD INDEX................................................................................................................................................................1HINGSTMAN 4..............................................................................................................................................................................11NC ECONOMY DISAD..............................................................................................................................................................2

1NC ECONOMY DISAD..............................................................................................................................................................31NC ECONOMY DISAD..............................................................................................................................................................4FOOD PRICES LINK.......................................................................................................................................................................5AGRICULTURE INDUSTRY LINK........................................................................................................................................................6AGRICULTURE INDUSTRY LINK........................................................................................................................................................7AGRICULTURE INDUSTRY LINK........................................................................................................................................................8FARMERCONFIDENCE LINK............................................................................................................................................................9AT: SUBSIDIES LOWERFOOD PRICES............................................................................................................................................10AT: SUBSIDIES BAD FORFARMERS...............................................................................................................................................11AT: SUBSIDIES LEAD TO OVERPRODUCTION...................................................................................................................................12AGRICULTURE KEY TO THE ECONOMY..........................................................................................................................................13AGRICULTURE KEY TO THE ECONOMY..........................................................................................................................................14

AGRICULTURE KEY TO FOOD SECURITY........................................................................................................................................15BIOFUELS KEY TO THE ECONOMY................................................................................................................................................16BIOFUELS KEY TO THE ECONOMY................................................................................................................................................17SUBSIDIES BAD TRADE.............................................................................................................................................................18SUBSIDIES BAD DEVELOPING ECONOMIES...................................................................................................................................19SUBSIDIES BAD ENVIRONMENT..................................................................................................................................................20

HINGSTMAN 4

1


2/20


1NC Economy Disad

A.) UNIQUENESS

Key indicators prove economy strong now- jobs and GDP overwhelm any negative trendsNOVAK, National Review staff writer, 7/17/2008[Michael, "Our 'Horrible' Economy," online]

Everyone says that our economy is horrible. Gas for our cars is headed toward $5 a gallon. The stockmarket has turned seriously downward. Unemployment is edging upward (although the unemploymentrate is still holding about even).Yet two basic points make it difficult for this amateur to see just why our current economy is sohorrible. For me, the most important issue in any economy of any democratic republic is job growth.In 1976, I wrote speeches for Senator Henry M. Scoop Jackson (D., Wash.), in which the three mainpriorities of his campaign were identified, in this order, as Jobs, jobs, job

The second-most-important thing for a democratic society, to my mind, is that there be consistenteconomic growth. The reason is that the most destructive of all human social passions is envy. If there isno growth, the only way people have to vaunt themselves is to tear others down. (In nearly all staticsocieties, envy sparks immense social frictions.) In a growing economy, by contrast, people have a chanceto stop comparing themselves with their neighbors (and tearing them down). Instead, they can work ashard as they can to meet their own goals. If their own position tomorrow will be significantly closer totheir hearts desire than it is today, then they dont need to care how their neighbor is doing.A republic like the United States simply must defeat envy, and focus on a better future for each family.The only way that can be accomplished is by reasonably consistent and gently upward economic growth.Growth is the necessary condition for the pursuit by each of his own happiness. A happy society is a moregenerous and loving society.

In this light, the U.S. with a growing GDP from the year 2000 until today, along with a steadygrowth in the number (and percentage) of people employedis better offthan almost all nations inEurope. Whatever else is happening in the U.S. economy today, these are very good indicators.U.S. output today is just about 40 percent higher than it was when President Clinton left office.Thenominal GDP has grown from $10 trillion at the end of 2001 to $14 trillion at the end of January 2008.In other words, the U.S. has added toits national wealth an equivalent to the whole nominal GDP ofChina (in 2007, $3.25 trillion). The U.S. today is as big as it was in 2001, plus the whole GDP ofChina.

2


3/20


1NC ECONOMY DISAD

B.) LINK

ELIMINATNGSUBSIDIESMAKESUSAGRICULTUREUNSUSTAINABLE

Beitel, 2005

Karl Beitel, policy analyst at Food First/Institute for Food and Development Policy, US Farm Subsidies

and the Farm Economy: Myths, Realities, Alternatives, 8-23-05,

http://www.foodfirst.org/backgrounders/subsidies

Pursuing such alternatives is an urgent necessity. Market liberalization does not, in itself, launchdeveloping countries on a path of sustainable long-term growth capable of lifting their populations out ofpoverty. In fact the market, left to operate free from government intervention, will only exacerbateeconomic pressures in large segments of the rural farm sector, both in the US and globally. The

farm sector has historically been subjected to extensive regulatory controls, which are needed tocompensate for the markets inherent failures. An alternative to crippling free market policies exists:

what is required is the political will to bring it about. Progressive agricultural and trade groups Northand South must move beyond the subsidy debate and unite in support of alternatives that willsustain the worlds farmers and ecosystems.

AND AGRICULTUREISKEYTOTHE U.S. ECONOMY

O. Shawn Cupp; 2004

Assistant Professor, Department of Logistics and Resource Operations, United States Army Command

and General Staff College,Agroterrorism in the US: Key Security Challenges for the 21st Century,http://bcbsma.medscape.com/viewarticle/482308

Agriculture is one of the easiest sectors of the U.S. economy to disrupt, and its disruption could havecatastrophic consequences for the U.S. and world economies. Agriculture in the U.S. accounts for 13% of

the current Gross Domestic Product (GDP) and provides employment for 15% of the population. It produceshigh-quality, cheap, plentiful food for domestic consumption and accounts for more than $50 billion in

exports. The likelihood of terrorist acts interrupting the production, processing, and distribution of agriculturalproducts is high: A number of different possible plant or animal pathogens could cause harm or loss ofproduction, and even an act of agroterrorism that did not result in the destruction of foodstuffs or interruptionsin the food supply could have a psychological impact. A number of recent unintentional events and epidemicshave prompted the U.S. and other countries to provide resources to counteract contagious diseases and containtheir impact, including increased funding to federal agencies that are responsible for protecting domesticagriculture. This article presents recommendations to protect agriculture, including changing the wayagriculture is viewed on the federal level and increasing the resources to protect agriculture from terroristattack.

3


4/20


1NC ECONOMY DISAD

C.) IMPACT U.S. ECONOMYKEYTOTHEWORLDECONOMY

The Independent, 2006 (9/25, http://news.independent.co.uk/business/comment/article1747133.ece)

If the US slows down, the global economy won't be doing very well. In many ways, the US is the global economy. The USaccounts for 33 per cent of global output. The UK and Australia, at 5 per cent and 1 per cent of global output, are minnows. Solong as the US is booming, smaller economies can keep their heads above water. But who can keep the US's head abovewater? China and India may be growing quickly, but they're still too small and not sufficiently developed to provide thelifeboat that would be needed should the US slip up. Only the eurozone and Japan could play that role and neither would findit easy: with limited room for manoeuvre on policy, they could easily come unstuck in the light of a US slowdown, particularly iftheir currencies were to appreciate against an arthritic dollar.

AND GLOBALECONOMICCOLLAPSECAUSESEXTINCTION

Bearden, 2000 (T.E., Director of the Association of Distinguished American Scientists, The Unnecessary Energy Crisis: How

To Solve It Quickly, Space Energy Access Systems, http://www.seaspower.com/EnergyCrisis-Bearden.htm)

History bears out that desperate nations take desperate actions. Prior to the final economic collapse , the stress on nationswill have increased the intensity and number of their conflicts, to the point where the arsenals of weapons of mass

destruction (WMD) now possessed by some 25 nations, are almost certain to be released. As an example, suppose a starvingNorth Korea launches nuclear weapons upon Japan and South Korea, including U.S. forces there, in a spasmodic suicidalresponse. Or suppose a desperate China whose long-range nuclear missiles (some) can reach the United States attacksTaiwan. In addition to immediate responses, the mutual treaties involved in such scenarios will quickly draw other nationsin to the conflict, escalating it significantly. Strategic nuclear studies have shown for decades that, under such extreme stressconditions, once a few nukes are launched, adversaries and potential adversaries are then compelled to launch on perception ofpreparations by one's adversary. The real legacy of the MAD concept is this side of the MAD coin that is almost neverdiscussed. Without effective defense, the only chance a nation has to survive at all is to launch immediate full-bore pre-emptive strikes and try to take out its perceived foes as rapidly and massively as possible. As the studies showed, rapid

escalation to full WMD exchange occurs. Today, a great percent of the WMD arsenals that will be unleashed, are already onsite within the United States itself. The resulting great Armageddon will destroy civilization as we know it, and perhaps mostofthe biosphere, at least for many decades.

4


5/20


FOOD PRICES LINK

DECREASINGSUBSIDIESRAISESFOODPRICES

STROKES, 2006 (BRUCESTROKES, NATIONALJOURNAL, 3-11-06, DOHASWINNERSANDLOSERS)

Contrary to conventional wisdom that poor-country farmers have the most to gain from ending rich-country agriculturalsubsidies and protection, developing countries could actually be slightly worse off after the round. Only a few such nations --Argentina, Brazil, South Africa, and Thailand -- would be big agricultural beneficiaries under the Carnegie forecast. Mostfarmers in poor countries would suffer because they aren't globally competitive and they wouldn't be well positioned to takeadvantage of new market opportunities in Europe and the United States. Moreover, many of the poorest nations now enjoypreferential access to rich-country markets, a benefit that will be eliminated in a new trade deal. And, since a decline in U.S. andother farm subsidies will lead to global price rises for many commodities, developing countries that are net food importers couldsee their food bills rise.

5


6/20


Agriculture Industry Link

SUBSIDIESAREKEYTOTHEFARMECONOMY

Dr. Robert Goodman, Alabama Cooperative Extension System Farm Economist and Auburn University

Associate Professor of Agricultural Economics, 2004 A Five-Point Defense of Farm Subsidieshttp://www.alfafarmers.org/issues/farm_programs.phtml

Unpredictability, either in the form of natural or man-made disasters, remains the biggest challenge

associated with farming both from the standpoint of the producer and the consumer. Despite the bad

press they've garnered recently, Goodman believes subsidies serve two critical purposes --- protecting

farmers from drastic fluctuations in commodity prices often caused by weather or market setbacks and

consumers from the price spikes associated with steep drops in crop inventories. Throughout history, cropfailures were facts of life driven home with horrifying frequency until the 20th century when farm pricesupports became common. "During famine, food became scarce and prices spiked," Goodman says.

"Now, thanks to subsidies, we are --- to some degree, at least, better protected by these higher food

reserves. Critics argue that subsidies create an excessive and even burdensome oversupply of inventory.

To a great extent, that's true, Goodman says. On the other hand, he argues, the huge year-to-yearcarryover of large inventories safeguards against huge prices fluctuations that otherwise would follow

natural or market-driven setbacks. "Simply put, subsidies promote stability by protecting consumers

from high prices and farmers from low prices and, ultimately, bankruptcy," he says.

Subsidies economically sustain then entire agricultural industry

Dr. Robert Goodman, Alabama Cooperative Extension System Farm Economist and Auburn University

Associate Professor of Agricultural Economics, 2004 A Five-Point Defense of Farm Subsidies

http://www.alfafarmers.org/issues/farm_programs.phtml

One of the major misconceptions associated with farm subsidies, particularly among consumers, is thatproducers are the only ones who benefit --- not true, says Goodman. Subsidies virtually guarantee that productssuch as corn, cotton and wheat are produced in large amounts --- a factor that not only benefits producers butothers along the food-processing and marketing chain. "It's not just the final products we eat that are affectedby these payments but the building blocks along the way that comprise the food production and distributionchain," Goodman says. "Farmers receive direct benefits, but others along the way benefit indirectly throughcheaper production inputs, which, in turn, contribute to lower production costs."

6


7/20



Agricultural subsidies are critical to stabilizing the domestic agricultural sector.

JeffNUNLEY is the executive director of South Texas Cotton and Grain Association, Farm Policy Facts, A Safety Net for

All Americans 2007, http://www.farmpolicyfacts.org/mm_safety_net_for_americans.cfm

Recently, one of my neighbors in town was complaining about our U.S. farm program. He made the statement that hewished the government would subsidize his income, like it did for farmers. My response was that our farm program didsubsidize his income. How? By keeping food costs low. This frees up income that can be spent on other things. Mostpeople won't do the math. Farm subsidies amount to about 0.3% of the federal budget. That means if you're paying $5,000per year in federal income taxes (payroll taxes don't count), the portion of your tax bill to provide food security for thiscountry would be about $15. The return on investment of that fifteen dollars is pretty good. You get a cheap, safe, andaffordable food supply. We keep a domestic agriculture sector (so we don't have to commit military troops in othercountries to ensure our food supply, like we do with oil). We provide an underpinning for our entire agriculture sectorwhich represents 20% of our GDP. We contribute to the balance of foreign trade. Agriculture exports are a significantfactor in lowering our trade deficit. This helps support the value of our currency, which increases our consumers' buyingpower for imported goods and improves our standard of living. Since most payments are capitalized into the value of

land, we support rural, urban, and school taxing entities that rely on ad valorem taxes for funding. Figure out what schooldistricts and other taxing entities would lose if row crop farm land went out of production and back into pasture. To fillthat hole, the increase in your property taxes would probably cost more than three-tenths of 1% of your federal incometaxes. Food prices in the U.S. are very stable and have been declining gradually over time. When I was in college in themid 1980's, Americans spent about 17% of their disposable income on food. Today that number is around 9.5%. This iseven more impressive when you consider we buy more expensive ready-to-eat prodducts now than we did 20 years ago.According to Farm Bureau, Americans work about 5 weeks to pay for their annual food expenses. In France it would takemore than 9 weeks, in Japan more than 13 weeks and in Mexico more than 17 weeks. I don't know about you, but anadditional four weeks of work to buy groceries is more than three-tenths of 1% of my federal income taxes.

Agricultural subsidies are critical to the survival of mid-sized farms, which are the backbone of the

agricultural sector.Thomas L. Daniels is an Associate Professor of Regional and Community Planning at Kansas State University, where heteaches rural and small town planning. He holds a Ph.D. in Agricultural Economics from Oregon State University and isco-author ofRural Planning and Development in the United States, A rationale for the support of the medium-sizedfamily farm, Agriculture and Human Values, Volume 6, Number 4 / September, 1989,http://www.springerlink.com/content/u47213302tj16214/The current financial stress in the countryside and the future of the family farm are likely to be major issues in theformulation of the 1990 Farm Bill. Medium-sized commercial family farms may be especially targeted for support. Thesefarms are the basis of rural economies and settlement patterns in many parts of nonmetropolitan America. Two possiblechanges in farm policy are debt restructuring and the decoupling of farm payments from commodity production. Manymedium-sized family farms continue to face substantial debt problems, but most of these farms could be viable with somedebt restructuring. Ccmmodity programs have become extremely expensive and encourage overproduction and the

consolidation of farming resources into ever larger units. Federal farm programs may become based on need, with asensitivity to differences in regional farming systems. Such a policy could support medium-sized family farms, slow thegrowth in superfarms, reduce surpluses, and reduce the overall cost of farm programs.

7


8/20



Plan complicates future investments for the farm economy

DELTA FARM PRESS 3-10-05HTTP://DELTAFARMPRESS.COM/NEWS/031005RAY-COLUMN/

The changes that will affect most farmers who plant program crops are changes in direct payments, loandeficiency payments (LDP), marketing loan gains (MLG), and counter-cyclical payments (CCP). If pricesfor the coming year were to be at last spring's levels, the proposed changes would attract little attention.However, with prices in the tank and moving sideways to downward, anything that affects LDPs, MLGs,and CCPs will have a direct impact on producers' household income.Rather than making changes in the loan rate, savings in the LDP and MLG programs will be achieved byreducing the amount of production that is eligible for these programs. Presently, marketing loan benefits(LDPs and MLGs) are paid on the total production of program crops, subject to the payment limit. In theproposed budget, the amount of crops eligible for these benefits will be limited to the direct payment yieldtimes 85 percent of the reported acreage. For some producers this will represent a double cut because ofthe 85 percent and because their actual yield is higher than the direct payment yield.

Coupled with lower direct payments, reductions in marketing loan benefits could be significant during ayear of low prices. Sen. Tom Harkin, D-Iowa, gives an example of what these cuts would mean to an Iowafarm with 250 acres of corn and 150 acres of soybeans. "If President Bush's proposal had been in place forthe 2004 crop year, this Iowan would have lost $7,700 in farm income in one year alone, Harkin says.This may not seem like a lot, but to a farmer earning $40,000 annually, it represents a nearly 20 percentdrop in income." You may want to provide your legislator with a comparison of the payments youreceived under the current program with those you would have received as a result of the proposed budgetchanges.

8
http://deltafarmpress.com/news/031005ray-column/http://deltafarmpress.com/news/031005ray-column/http://deltafarmpress.com/news/031005ray-column/http://deltafarmpress.com/news/031005ray-column/http://deltafarmpress.com/news/031005ray-column/http://deltafarmpress.com/news/031005ray-column/http://deltafarmpress.com/news/031005ray-column/http://deltafarmpress.com/news/031005ray-column/http://deltafarmpress.com/news/031005ray-column/http://deltafarmpress.com/news/031005ray-column/http://deltafarmpress.com/news/031005ray-column/http://deltafarmpress.com/news/031005ray-column/http://deltafarmpress.com/news/031005ray-column/


9/20


Farmer Confidence Link

Subsidies are vital to farmer confidence.

SOUTHWEST FARM PRESS 2-17-05 BUDGETCUTSCOUNTERPRODUCTIVEFORCONSISTENT, SAFEFOODSUPPLY

HTTP://SOUTHWESTFARMPRESS.COM/NEWS/050217-COLUMN-FOOD-SUPPLY/

The U.S. farm program plays an important role, too, providing a safety net that helps farmers survivewhen prices fall or when calamity strikes. That safety net could be weakened by severe cuts in theagriculture budget. Payment limitations, especially hard on farmers who have expanded to improveefficiency, hamper producers abilities to make a profit.Most farmers, probably 99.99 percent, prefer to get their incomes from the marketplace. If the world werean equal opportunity market, where every agricultural competitor played by the same rules and operatedunder the same restrictions, U.S. agriculture would thrive. But thats a fairly tale.The truth is, taxpayers get a bargain from the small percentage of their contributions (one-half of onepercent of the total U.S. budget) that supports agricultural programs. Food in America remainsaffordable, thanks to the farmers and ranchers who produce it, says the Farm Bureau.The administration should rethink its proposal to take deep cuts from agriculture. Its one of our most

cost-effective and far-reaching programs.

9


10/20


AT: Subsidies Lower Food Prices

Subsidies are not the driver of food price decline

Beitel, 2005




It is true that subsidies sustain production even as prices fall below the cost of production. But claims thatsubsidies are a primary cause of declining prices are confusing; the reality is more complex.In part, the present confusion over the real effect of subsidies on price results from a failure to take alonger-term view of the US farm sector. When we examine the real, inflation-adjusted prices for severalmajor US commodity crops over the last sixty years, two facts stand out: that these prices have declinedsteadily over sixty years; and that the price decline since 1996 has been far less severe than in previousperiods, such as the years 1973 to 1986.[2] These two facts suggest that other factors underlie the longer-term decline, and that we must be careful in attributing recent trends in price chiefly to subsidies.Furthermore, a 1998 upsurge in subsidy payments was triggered in response to falling prices, not the other

way around. And prices fell not because of subsidies, but because the remaining vestiges of supplymanagement programs were phased out in 1996, leading to increased competitive pressures on the supplyside of the market.[3] Clearly, we cannot explain falling prices and stressed conditions in the global farmeconomy simply by pointing to the market-distorting effects of US commodity subsidies.

10
http://www.foodfirst.org/backgrounders/backgrounders/subsidies#en2http://www.foodfirst.org/backgrounders/backgrounders/subsidies#en3http://www.foodfirst.org/backgrounders/backgrounders/subsidies#en2http://www.foodfirst.org/backgrounders/backgrounders/subsidies#en3


11/20


AT: Subsidies Bad For Farmers

Eliminating subsidies does not benefit world farmers

Beitel, 2005




To support the claim that eliminating US subsidies would boost both world commodity prices and farmerincomes in the developing world, critics cite studies that model the effects of phasing out US and EU farmsupports on global output and prices.[7]But since these models rest on different assumptions, each yields different resultssome estimatingworld price increases of 1.8 to 3.7 percent over ten to fifteen years,[8] others, that prices would decreaseup to 3 percent.[9] Even the best case would lead to modest price increases and very limited benefits toselect farmers.So if subsidies are not driving declining commodity prices, what is? If eliminating subsidies wont reallyhelp poor farmers, what will?

11
http://www.foodfirst.org/backgrounders/backgrounders/subsidies#en7http://www.foodfirst.org/backgrounders/backgrounders/subsidies#en7http://www.foodfirst.org/backgrounders/backgrounders/subsidies#en8http://www.foodfirst.org/backgrounders/backgrounders/subsidies#en9http://www.foodfirst.org/backgrounders/backgrounders/subsidies#en7http://www.foodfirst.org/backgrounders/backgrounders/subsidies#en8http://www.foodfirst.org/backgrounders/backgrounders/subsidies#en9


12/20


AT: Subsidies Lead To Overproduction

Subsidies dont lead to overproduction

Beitel, 2005




By keeping afloat farms that currently sell goods at below production costs, subsidies can indeedcontribute to higher overall supply. But they are not the primary cause of overproduction; nor is excesssupply the primary cause of falling prices and faltering farm incomes. Again, we need a more nuancedaccount of the actual causal effects.Overproduction refers to a situation in which current supply exceeds current demand. Excess inventoriesaccumulate, and prices fall. If overproduction caused the longer-term price decline, we would expect tosee excess inventories rising as prices fall.[4]But inventories (in relation to usage) have remainedconstant or fallen for all major commodity crops (corn, rice, wheat, soy, and cotton) since the early1980s.[5] Thus falling prices do not appear to be caused by overproduction, either before or after the 1996

subsidies were enacted. And (with the possible exception of cotton), this data offers no compellingevidence that subsidies as such are causing stocks to rise.[6]Critics might argue that subsidy-fueled overproduction is being exported, or dumped overseas, andthats why we dont have climbing surpluses at home. The data dont appear to support this theory either:both the percentage of total domestic production that is exported and the US overall share of total worldexports are either constant or falling for almost all major US commodity groups since the early 1980sincluding the period after 1996.

12
http://www.foodfirst.org/backgrounders/backgrounders/subsidies#en4http://www.foodfirst.org/backgrounders/backgrounders/subsidies#en4http://www.foodfirst.org/backgrounders/backgrounders/subsidies#en5http://www.foodfirst.org/backgrounders/backgrounders/subsidies#en6http://www.foodfirst.org/backgrounders/backgrounders/subsidies#en4http://www.foodfirst.org/backgrounders/backgrounders/subsidies#en5http://www.foodfirst.org/backgrounders/backgrounders/subsidies#en6


13/20


Agriculture Key To The Economy

US agriculture is key to the economy

Raisbeck, 2003

David W. Raisbeck, Vice Chairman, Cargill, Incorporated, The Role of Agriculture in the Global

Economy, May 18, 2003, http://www.cargill.com/news/media/030518raisbeck.htm

Let me begin with some observations about commercial agriculture the part of agriculture that mostclearly is operating in the global economy. Fifty years ago, the United States was the largest agriculturalexporter, doing about $3 billion in sales per year. Six of its top ten customers were in Western Europe;two more Japan and Canada also were developed countries; India, a food aid recipient, and pre-CastroCuba were the only developing countries that were major markets.Today, U.S. agricultural exports top $50 billion a year. Six of its top ten customers are developingcountries, and three-fourths of U.S. agricultural exports go to Asia and the Americas.

AGRICULTUREISKEYTOTHEECONOMY

O. Shawn Cupp; 2004Assistant Professor, Department of Logistics and Resource Operations, United States Army Command

and General Staff College,Agroterrorism in the US: Key Security Challenges for the 21st Century,http://bcbsma.medscape.com/viewarticle/482308

Agriculture is one of the easiest sectors of the U.S. economy to disrupt, and its disruption could havecatastrophic consequences for the U.S. and world economies. Agriculture in the U.S. accounts for 13% of thecurrent Gross Domestic Product (GDP) and provides employment for 15% of the population. It produces high-quality, cheap, plentiful food for domestic consumption and accounts for more than $50 billion in exports. Thelikelihood of terrorist acts interrupting the production, processing, and distribution of agricultural products ishigh: A number of different possible plant or animal pathogens could cause harm or loss of production, and evenan act of agroterrorism that did not result in the destruction of foodstuffs or interruptions in the food supply

could have a psychological impact. A number of recent unintentional events and epidemics have prompted theU.S. and other countries to provide resources to counteract contagious diseases and contain their impact,including increased funding to federal agencies that are responsible for protecting domestic agriculture. Thisarticle presents recommendations to protect agriculture, including changing the way agriculture is viewed on thefederal level and increasing the resources to protect agriculture from terrorist attack.

13


14/20


Agriculture Key To The Economy

AGRICULTURALINDUSTRYISKEYTOTHEECONOMY

FITZGERALD 99

(Senator Peter G., R-Ill., Illinois Needs Sound Farm Policy, 2-28,http://fitzgerald.senate.gov/index.cfm?FuseAction=Articles.Detail&Article_id=69&Month=2&Year=1999

|Agriculture is critical to both the economy of America and Illinois. Including related industries, agriculture isthe nation's largest employer. Illinois' 76,000 farms cover more than 28 million acres, nearly 80 percent of ourstate's land. Illinois farm product sales generate more than $9 billion annually.

When I entered the U.S. Senate last November, I worked hard to secure a seat on the Senate AgricultureCommittee so that our state and our farmers could have a strong voice in Washington. We need to focuson three areas: opening new overseas markets for farm products, reducing the federal tax and regulatoryburden on farmers and rural businesses and ensuring farmers have adequate risk management tools.Illinois farmers depend on foreign trade for their economic well being. In 1997, Illinois exported $3.7billion in agricultural commodities, ranking third among all states. But over the last three years, farm

exports dropped nationwide, putting many Illinois farmers at risk.Congress and U.S. trade officials should work to ensure that American farmers are able to sell theirproducts in the world market. In my first legislative act as Senator, I joined four colleagues to introducelegislation requiring U.S. trade officials to make eliminating agriculture trade barriers a top priority inU.S. trade negotiations, so that our farmers can compete on a level playing field and fight for a bettershare of retail agriculture sales.I support fast-track trade negotiating authority, so that the Administration can be in a better position to teardown international trade barriers. We must, at the same time, work to ensure that our trading partnersadhere to all existing trade agreements.Eliminating the estate tax on family farmers will ensure that farms can be passed on to the nextgeneration. According to USDA figures, farmers are six times more likely to face inheritance taxes than

other Americans. Family farmers work hard and pay taxes throughout their lives. They build a productiveand successful family business, and hope eventually to pass it on to their children. A farm's value is storedoverwhelmingly in liquid assets ,land, livestock and physical capital. Farmers who don't have cashavailable to pay the estate tax are often forced to sell their farms to pay the government.Last year, the federal government provided a significant amount of money in emergency disasterassistance to farmers. Perhaps this would not have been necessary if farmers could access, in the firstinstance, well-designed risk management tools.This year, the Senate will examine the USDA's crop insurance system. We need to look at whether thecurrent system provides adequate protection against risk and evaluate the development of new riskmanagement tools. For farmers to prosper, our nation must have economic, farm, and trade policies thatpromote investment and growth in agricultural communities and agricultural states like Illinois. A healthyagricultural economy has ripple effects through many industries and is critical for the economic prosperityof both Illinois and America. As your new Senator, I look forward to addressing these issues in thecoming years.

14
http://fitzgerald.senate.gov/index.cfm?FuseAction=Articles.Detail&Article_id=69&Month=2&Year=1999http://fitzgerald.senate.gov/index.cfm?FuseAction=Articles.Detail&Article_id=69&Month=2&Year=1999


15/20


Agriculture Key To Food Security

AGRICULTUREISKEYTOFOODSECURITY

Riemenschneider, 2003

CHARLES H. RIEMENSCHNEIDER, DIRECTOR, LIAISON OFFICEFORNORTH AMERICA

Food and Agriculture Organization of the United Nations, The Role of Agriculture in the Global

Economy, http://www.fao.org/world/lowa/news.pdf

First, at the most basic level, agricultures essential role is to provide adequateoutput to assure global food security. Without adequate food, people cannot work andearn, they cannot learn, and they are more susceptible to disease. Overall, theireconomic prospects are dim. With a majority of the worlds population living in ruralareas in developing countries, agriculture remains a key economic activity to providepeople with the capacity to feed themselves by producing their own food or as asource of employment and income to access food supplies. This essential link betweenfood security and economic development through agricultural productivity is whyfood security is the number one priority of all of the work of FAO.Second, agricultural trade also provides a further link between agriculturalproduction and the global economy. How developing countries - particularly the netfood importing countries - and their food insecure and vulnerable people - benefitfrom the new framework of agricultural trade is a major concern of FAO. As theDoha Development Round moves forward, many developing countries mustovercome a number of challenges to take advantage of trade opportunities created bythese trade reforms

15


16/20


Biofuels Key To The Economy

Biofuels key to the economy

US DEPARTMENTOFENERGY, 2000

JUNE 2000, BIOFUELSFORSUSTAINABLETRANSPORTATION, WWW.NREL.GOV/DOCS/FY00OSTI/25876.PDF

Oil imports account for almost half the U.S. trade deficit, which has an enor-mous impact on oureconomy and the creation of new jobs. A high tradeimbalance from dependence on foreign oil also leaves oureconomy vulner-able to price hikes from supply disruptions. Developing a stronger marketfor domestically produced biofuels in the United Stateswill help alleviate thenegative implications of our trade deficit and contribute to positive economictrends in the U.S. transportation sector.Currently, the ethanol industry is responsible for approximately 200,000jobs. Between 1996 and 2000, the ethanol industry added approximately$51 billion to the U.S. economy. Ethanol production creates domestic jobs inplant construction, operation, maintenance, and support in the surroundingcommunities. This can have a profound impact on rural America, where adecline in employment has placed increasing burdens on our cities, infra-structure, and tax base

16


17/20


Biofuels Key To The Economy

Biofuels add billions to the economy

GreenBiz 2006

12-29-06, Study Shows Biodiesel Will Add $24 Billion to U.S. Economy,

http://www.greenbiz.com/news/2006/12/29/study-shows-biodiesel-will-add-24-billion-us-economy

America's biodiesel industry will add $24 billion to the U.S. economy between 2005 and 2015, accordingto a study by the National Biodiesel Board. The figure foresees biodiesel growth reaching 650 milliongallons of annual production by 2015.The economic analysis, conducted by John M. Urbanchuk of LECG and funded by the soybean checkoffthrough the United Soybean Board, also found that biodiesel production will create a projected 39,102new jobs in all sectors of the economy.Additional tax revenues from biodiesel production will more than pay for the federal tax incentivesprovided to the industry, concluded Urbanchuk. It will keep $13.6 billion in America that would otherwisebe spent on foreign oil. This total impact of biodiesel on the economy includes the temporary impacts ofconstruction, the permanent impacts of annual production and the direct value of biodiesel and co-

products (glycerin)."Because these plants buy local goods and local services, the second and third-round employment-generating impacts are really significant," Urbanchuk said. Youre looking at a fairly substantialemployment-generating impact. Most of these jobs are going to be located in rural communities, and youcant overstate the impact of the biofuels industry on these rural economies.The study finds that if 498 of the 650 million gallons of estimated biodiesel demand in 2015 is producedfrom soybean oil, farmer-level soybean prices will increase nearly 10 percent. Using the U.S. Departmentof Agricultures 2006 Long-Term Baseline forecast for soybean prices as a starting point, soybean farmerscan expect increased biodiesel demand to increase average soybean prices $0.58 per bushel by 2015.American Ags Lankenau says his plants expansion will be worthwhile investment for his business, andfor his community.

I have to believe that 80 percent of dollars weve spent stay within 150 miles of here, he said, addingthat of all the businesses hes run, this is the most fulfilling. I drive my diesel pickup through our ruralarea where I see soybeans growing, and it makes me feel good about what I do.There are 88 plants in thenation producing an estimated 200 - 250 million gallons of biodiesel in 2006. Thats triple last yearsproduction of 75 million gallons.

17


18/20


Subsidies Bad Trade

ELIMINATINGAGSUBSIDIESISKEYTOTRADEANDFOODSECURITY

Raisbeck, 2003



This helps explain why agriculture is the linchpin of the Doha Round. Doha can shape for a generation theprogress we make in merging agriculture into the rest of the global economy. And that progress willdetermine to a large extent how far we get in ending hunger and reducing poverty while protecting theenvironment.For many of the worlds people, agriculture remains a subsistence activity. Ninety percent of the foodproduced in the world is consumed within the country producing it, and most of that usage lies outside ofthe commercial system. A company like Cargill only begins to touch the food system as commercialproduction emerges and agricultural products flow to urban centers and into international markets. But ascommercial food trade emerges, new opportunities arise to eliminate hunger and enhance food security.The first opportunity is to lower food costs. Access to low-cost imports helps keep food costs down,

especially for the poor who often spend 70 percent or more of their personal income to eat.Second, food trade creates choice. Trade offers variety; it also provides access to foods year round thatoften can be grown locally only on a seasonal basis. And, it provides efficient local farmers newmarketing opportunities. The result is higher living standards for those able to participate.Finally, food trade provides more reliable access to supplies at lower cost. Crops often fluctuate 25percent from one year to the next within a growing region. Global production, however, typicallyfluctuates less than three percent annually, as good crops in some places offset poor crops elsewhere.Moreover, storing food typically costs 20 percent or more of its value annually, even ignoring waste,pests, quality losses and the like. Most foods can be shipped halfway around the world for 10 percent oftheir value, or half the cost of storage.In other words, food trade lowers costs, widens choices and provides more reliable access to supplies.

Each is important in eliminating hunger. But, food trade cannot play this role effectively in the face oflarge market access barriers. The major problem limiting agricultures role in the global economy is thatagricultural trade barriers on average are ten times higher than industrial trade barriers, and manyagricultural barriers are prohibitively restrictive. Unless these barriers are brought down dramatically onall agricultural products in all countries, the global food system needed to end hunger will not developadequately. We will lose an important opportunity to reduce food insecurity, perhaps for a generation.

18


19/20


Subsidies Bad Developing Economies

LIBERALIZING US ECONOMICPOLICYISKEYTODEVELOPINGECONOMIES

Raisbeck, 2003David W. Raisbeck, Vice Chairman, Cargill, Incorporated, The Role of Agriculture in the Global Economy, May 18, 2003,

http://www.cargill.com/news/media/030518raisbeck.htmThis helps explain why agriculture is the linchpin of the Doha Round. Doha can shape for a generation theprogress we make in merging agriculture into the rest of the global economy. And that progress willdetermine to a large extent how far we get in ending hunger and reducing poverty while protecting theenvironment.For many of the worlds people, agriculture remains a subsistence activity. Ninety percent of the foodproduced in the world is consumed within the country producing it, and most of that usage lies outside ofthe commercial system. A company like Cargill only begins to touch the food system as commercialproduction emerges and agricultural products flow to urban centers and into international markets. But ascommercial food trade emerges, new opportunities arise to eliminate hunger and enhance food security.The first opportunity is to lower food costs. Access to low-cost imports helps keep food costs down,

especially for the poor who often spend 70 percent or more of their personal income to eat.Second, food trade creates choice. Trade offers variety; it also provides access to foods year round thatoften can be grown locally only on a seasonal basis. And, it provides efficient local farmers newmarketing opportunities. The result is higher living standards for those able to participate.Finally, food trade provides more reliable access to supplies at lower cost. Crops often fluctuate 25percent from one year to the next within a growing region. Global production, however, typicallyfluctuates less than three percent annually, as good crops in some places offset poor crops elsewhere.Moreover, storing food typically costs 20 percent or more of its value annually, even ignoring waste,pests, quality losses and the like. Most foods can be shipped halfway around the world for 10 percent oftheir value, or half the cost of storage.In other words, food trade lowers costs, widens choices and provides more reliable access to supplies.

Each is important in eliminating hunger. But, food trade cannot play this role effectively in the face oflarge market access barriers. The major problem limiting agricultures role in the global economy is thatagricultural trade barriers on average are ten times higher than industrial trade barriers, and manyagricultural barriers are prohibitively restrictive. Unless these barriers are brought down dramatically onall agricultural products in all countries, the global food system needed to end hunger will not developadequately. We will lose an important opportunity to reduce food insecurity, perhaps for a generation.

19


20/20


Subsidies Bad Environment

Eliminating subsidies is a pre requisite to environmentally sustainable farming practices

Raisbeck, 2003



The third area in which agricultural liberalization can help is in protecting fragile environmentalresources. The pressures of hunger and poverty often result in agricultural practices in low-incomecountries that harm the environment in two ways: by exhausting the soils productivity rather thanreplenishing it; and by forcing agriculture to expand to new lands rather than to use the most highlyproductive lands better.These pressures will only intensify over time. Food demand will continue to rise as global populationincreases. Most of that population growth will be concentrated in developing countries. Higher per capitaincomes and accelerating urbanization in the developing world will only further intensify agricultures useof scarce land and water resources. Unless productivity per acre, per dollar of investment and per hour ofwork rises, agriculture will continue to expand into more virgin areas, strain limited water resources and

exhaust overworked soils.This again is an area where agribusiness can help, if conditions permit the growth of the commercialsector of agriculture. But, many poor countries currently pursue policies that discourage farmers fromincreasing their productivity. Examples include: overvalued exchange rates, which limit exports; underinvestment in rural infrastructure, which raises marketing costs; and uncertain land title and commercialdispute settlement systems, which deter risk taking. It is these policies that could be left unreformed ifspecial and differential treatment for developing countries heads down the wrong path.Feeding a growing and more prosperous global population in a more environmentally sustainable way canonly be achieved by adopting productivity- and efficiency-enhancing technologies. And adopting bettertechnologies is directly linked to the opening of trading opportunities that can generate cash forreinvestment and market opportunities for expanded output.

So, from a commercial perspective, the worlds hopes for eliminating hunger, reducing poverty andprotecting fragile environments ride in important ways on the success of the Doha Agenda. Is the worldready to create an open food system obeying the same kinds of rules that govern a more open industrialeconomy?Progress will require commitments of several kinds. First, developed countries must be prepared to grantgreater access to their own markets to all countries, not just a select few. Developed countries also mustfind less trade-distorting ways to support rural incomes, and they must end the practice of subsidizingtheir exports. But developing countries need to embrace a similar vision of openness; nearly half ofcurrent global food trade, and virtually all of its growth potential, is among developing countriesthemselves.

Documents

Economy DA (ADI)