Maryland Farmers Approve Enactment of Columbian Trade Agreement

Ratifying the U.S.-Colombia Trade Promotion Agreement significantly improves market access for U.S. farmers in Colombia, the third-largest economy in the region, according to the Maryland Grain Producers Association (MGPA). 

“U.S. farm 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 farm products,” said Jason Scott, MGPA President and grain farmer from Wicomico County.  Scott is also a director for the U.S. Wheat Associates. 

Global trade is critically important to Maryland farmers.  According to the Foreign Agricultural Service, Maryland grain exports to all countries totaled $206 million in 2009, supporting thousands of jobs on and off the farm.  This is over half of the total $402 million sold from Maryland farms. 

As for Colombia, it is a regionally strategic market with exceptional growth potential for grains and other farm products like beef and pork. Its economy is projected to grow four 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, which has led to an increased demand for feed grains to support the domestic livestock industry. 

The United States had 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 that Colombia could be a $1 billion market for the U.S. feed grains industry alone should the free trade agreement be enacted.

U.S. corn, for example, currently faces a system of variable levies that result in tariffs as high as 194 percent. With the ratification of the trade agreement, the variable system is eliminated and duties on U.S. corn exports over that amount are eliminated over a multi-year period.  Wheat and barley also face a system of variable levies that can reach as high as 248 percent.  With the agreement enacted, Columbia will eliminate the levies and all tariffs on both wheat and barley.

“While the Colombian free trade agreement is certainly positive for grains, it also eliminates or significantly reduces levies and tariffs on dairy products, pork, beef, poultry, cotton and even fruits and vegetables,” said Chip Councell, grain and vegetable farmer from Talbot County who serves as a director for both the MGPA and the U.S. Grains Council.

“We support the Colombian and other trade agreements because they help ensure all U.S. farm sectors have access to global markets,” Councell concluded. “More open and reliable trade also allows food and agriculture products to move more freely around the world.  We have surpluses every year that could help lower food costs if we could get it in the market and to the consumer.”