Avocadoes and Agribusiness: NAFTA’s big impact on U.S. farmers and how America eats

September 18th, 2017

America’s farmers and ranchers have been amongst the most vocal groups standing up to defend the North American Free Trade Agreement (NAFTA) and urging U.S. leaders not to abandon the agreement.

That’s no surprise. The pact has been a boon to the U.S. food industry – ranging from vastly increased exports of American pork, corn, poultry, and grains to Mexico to a wholesale shift in what Americans consume and when.

One amazing statistic sums up the impact: one out of every 10 acres planted in the U.S. produces crops that are exported to Mexicans or Canadians. Diverse agricultural interests from Midwestern corn growers to California pear growers and North Carolina hog farmers have all spoken up about how critical NAFTA has been to their success over the last two decades, highlighting the deal’s importance.

From 1993 to 2015, U.S. agricultural exports quadrupled to $38.6 billion as Mexican tariffs that had long made U.S. crops uncompetitive came crashing down. Meanwhile Mexico and Canada’s share of U.S. agricultural exports role to nearly 30 percent.

                                                                                                                                        Reuters, 2017

NAFTA’s agricultural benefits aren’t limited to the economic gains felt by the 20.1 million Americans employed in agriculture-related industries. Easy year-round access to warm weather crops like citrus, pineapples, avocados, and mangoes has triggered a strong shift in American tastes.

Mexican production of these crops not only became essential to supplying the increase in demand over those two decades, but established crops like avocadoes as regular parts of the American diet. As a result, the average American now eats seven pounds of avocadoes a year, versus one before NAFTA—a welcome boost to seasonal American growers and a healthy benefit to Americans diet.

This exchange works both ways — Mexico is now the single largest market for U.S. apples and pears and many types of fruits and vegetables flow both ways across the border in alternate seasons to ensure constant supplies for consumers.

The USDA’s Economic Research Service found that “By removing thousands of tariffs, quotas, import licensing requirements, and other policy measures that formerly distorted agricultural trade and FDI [foreign direct investment] among the United States, Canada, and Mexico, NAFTA facilitated a large increase in cross-border economic activity in the agricultural and processed food sectors.”

                                                                                                                     National Hog Farmer, 2017

That’s a substantial reason why groups ranging from the Produce Coalition for NAFTA to U.S. pork producers have aligned against new tariffs or doing away with the pact.  “It would be very unfortunate if we were to throw that out and somehow think that we could start over from the beginning and end up a lot better than we are, at least from an agricultural perspective,” Nebraska Farm Bureau President Steve Nelson said in an interview with Brownfield Ag News.

Farm groups have noted that any tariff changes could open a Pandora’s Box of duties and trade retaliations that left consumers, producers, and the U.S. economy worse off.