Menu

by George C. Landrith

Editor’s note: This is the second in a series of excerpts from Landrith’s editorial on five principles he believes will strengthen America’s agricultural economy. In the first part, Landrith cited reasonable and consistent environmental regulations.

Reasonable and consistent operational regulations
Regulations are intended to serve some worthwhile purpose. But when regulations are unreasonable, they can choke efficiency and make production unprofitable. In the former Soviet Union, most of their agriculture products were produced on small private plots while the vast government-regulated farms failed to produce enough food to feed the populace. If regulation were a necessary element to productive farms, the Soviet-run farms would have been among the most productive. Yet, Soviet farms were remarkable only for their lack of productivity.

This is not to say that all regulation is bad. For example, carefully placed and timed traffic lights can improve safety and flow of traffic. But putting a traffic light at every street corner would be costly and counterproductive, slowing the flow of traffic, rather than aiding it. The same is true of regulating agriculture. While some regulations may be needed, more is not necessarily better. Regulations should be based on the best available science, tailored to be the least restrictive way to accomplish the needed goal and be implemented for a period of time that allows the regulations to be tested and evaluated so that productive regulations can be continued and regulations that failed to achieve their stated purposes or proved to be more costly than estimated can be revised.

Policies that embrace free trade
The marketplace is global. Agriculture must be able to sell its products overseas. When we encourage innovation, free trade works. When we create burdensome rules and dictate a one-size-fits-all approach, American producers struggle to compete and do poorly in the global marketplace. Vigorous trade is vital to the health of our economy. Twelve million Americans work at jobs that depend on exports. The agriculture sector alone exported $51 billion in products last year, supporting 750,000 jobs in the process.

Here is a concrete example of how free trade can help American producers. Canada has preferential trade agreements with Chile. A $187,000 Caterpillar 140 H Motor Grader tractor made in America is slapped with tariffs of 8 percent when it enters Chile. This adds a whopping $14,960 to the cost of the tractor. The same tractor made in Canada, faces zero tariffs when shipped to Chile.

The net result of this is that rather than exporting tractors to Chile, we export jobs to Canada. Exporting tractors is good business. Exporting high paying skilled jobs is not. The United States can and will continue its dominance in agriculture by pushing for free trade and policies that encourage domestic production.