Nader's Public Citizen Excoriates NAFTA

June 27, 2001

Public Citizen, the consumer advocacy group founded by activist Ralph Nader, has issued a study that claims farm incomes plummeted and bankruptcies escalated in the United States, Canada and Mexico while U.S. food prices increased 20% during the first seven years of the North American Free Trade Agreement (NAFTA,).

The study, issued by Public Citizen's Global Trade Watch, alleged that North America's farmers and consumers have not benefitted from the pact, but many large agribusinesses have seen record profits during the period.

"In the past year, we noticed that wheat, soy, beef and other producers who had been a base of support for trade deals really starting to complain about how badly things were going since NAFTA," said Lori Wallach, director of Public Citizen's Global Trade Watch. "We understand why farmers are so upset, because nearly every U.S. commodity has faced a flood of new NAFTA imports swamping modest export gains, and prices have tanked."

A Public Citizen statement on the study said that during debate over NAFTA, farmers were promised that new export opportunities to Canada and Mexico would stabilize and reinvigorate the economics of farm life. "The reality has been quite different. Independent farmers have seen commodity prices plummet and critical domestic safety nets dismantled in the name of implementing NAFTA and other export-oriented farm policies. For the past seven years, wheat farmers in the Midwestern and Plains states; ranchers in Montana, Texas and other states; flower and fruit growers in California; lumber mill and timber workers in Louisiana, Arkansas and Washington; vegetable growers in Florida and California; chicken farmers nationwide; and others have suffered declining farm income while a flood of NAFTA imports outpaced U.S. exports to Canada and Mexico."

Among the report's findings:

--During NAFTA, the rate of elimination of small U.S. farms with sales under $100,000 was six times greater than in the preceding five-year period;

--U.S. farm income is projected to decline 9% between 2000 and 2001 -- from $45.4 billion to $41.3 billion -- compared to annual farm income of $59 billion before NAFTA;

--While the U.S. agricultural trade surplus with Canada and Mexico grew by $203 million between 1991 and 1994, it fell by $1.5 billion since NAFTA;

--Instead of reaping special trade advantages with Mexico and Canada, under seven years of NAFTA, the U.S. agriculture trade balance with the NAFTA countries declined more rapidly -- 71% -- than the U.S.-world agriculture trade surplus, which suffered a 29.6% decline.

--Between the 1994-95 growing season and the 1999-2000 season: U.S. corn export volume fell by 11 percent and prices fell by 20%; the volume of wheat exports declined by 8% and prices dropped 28%; the volume of cotton exports fell by 28% and prices plunged 38%; during the same period, even though the volume of soybean exports increased 16%, the total U.S. soybean crop value still declined by 2% because the per-bushel price fell by 15%.

The group's claims contrast a period of generally rising commodity prices with the present low-price era. NAFTA supporters respond that such comparisons are misleading because, they say, without trade-expansion agreements like NAFTA, the declines would have been worse. They also point to some trade categories that have improved under the agreement.