The American national holiday, Thanksgiving, celebrates the first autumn harvest of some of our earliest British settlers. With the help of the natives, the group that landed at Plymouth Rock was able to grow enough food to sustain themselves through the winter months to come.
Since then, this nation has been blessed with abundant yields of crops and livestock of all varieties. From the corn and wheat fields of the Midwestern plains, to the citrus groves of Florida, to our own Delta cotton and soybean farms, America has been able to sustain itself.
In fact, the role of agricultural self-sufficiency is often overlooked in tracing our rise to global prominence and power in the last century. For several hundred years, the major western European countries were motivated to forge colonial empires because they could not provide an adequate food supply for their populations at home. Unburdened by that pressure, the United States in the 20th century could focus on developing technology and industry, and our tremendous domestic agricultural production meant that basic foodstuffs were available at far lower prices to the American consumer, which increased everyone’s buying power and allowed more dollars to flow to other areas of the market.
As we are learning in the case of gasoline, we take it for granted that we pay less for food at the supermarket than citizens in most other nations. All of us had a lot more money to spend on other things before prices at the gas pump increased; we would experience a similar sense of financial impotence if the price of meat, fruits and vegetables, and dairy products suddenly began to climb.
This week the U.S. Department of Agriculture projected that, for the first time in 50 years, our agriculture trade balance will be exactly even next year. That is, American farm exports will decline 10 percent to $56 billion, and foreign food imports will rise to a record high of $56 billion.
Even though our agricultural import-export figures have been in balance before, the current trend is somewhat alarming. In the first place, it represents the loss of a competitive advantage, because part of the reason the U.S. shot ahead of the pack in the 1950s was that its farmers developed more efficient methods and had access to the most advanced machines and technology. Now the rest of the world is catching up, with third-world nations shedding mule-driven plows and crews of cotton-pickers in favor of the same tractors and combines used by their American counterparts.
More distressing, however, is that the new projections arrive at a time when American crops are priced low and the American dollar is at its weakest position in recent years. If we can’t achieve a favorable balance of trade under these conditions — when our exports are cheaply available to other nations and imports are more expensive to us — then U.S. farm products may have an even tougher time on the international market when circumstances change.
Among economists who favor outsourcing, importing agricultural products is another way of increasing market efficiency. In their minds, the American consumer benefits in the same way as they would when we import VCRs from China. If another country can produce the good cheaper, and we can purchase it for a lower price, then the free market has worked and we all benefit.
Except that a VCR is not quite the same thing as food. Depending on other nations for our food supply is a risky proposition. In the first place, imported food cannot possibly be as fresh as food produced domestically, because of the distance from its origin to market. Also, the safety of native meat and produce is easier to regulate, because the American farmer is under the full jurisdiction of our national authorities, and their yields are subject to more than just a cursory inspection at our ports and borders.
More important, however, is the general concept of agricultural self-sufficiency. Not only has it been a factor in our economic ascendancy, but in the current geopolitical climate, it is practically a national security issue. If we acknowledge that our dependence on foreign sources of oil has compromised our strength in the world, how can we allow ourselves to become similarly dependent on other nations for something as important as food?
The American farmer makes the same argument as the American industrial worker: given a level playing field, we can make a better product more efficiently than anyone, but other countries use cheaper, unregulated labor and impose tariffs. Farming and industry are also similar in the U.S. in that they have been consolidated into larger multi-national corporations who value economies of scale over domestic production.
With that in mind, this issue will be decided on the basis of values. Economic logic is on the side of the outsourcers and importers. Yet, as a nation, we must decide whether the short-term benefits of cheaper food (and cheaper oil) are worth the long-term risks of becoming a nation that relies on other countries for our basic necessities.
On a holiday that celebrates independence and self-sufficiency, this is a question worth considering.
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