Farm Talk

April 24, 2012

Trade agreement gives Kan. wheat farmers opportunities


CNHI

Parsons, Kansas — The long-awaited U.S.-Colombia Free Trade Agreement will be implemented May 15, giving Kansas wheat farmers an opportunity to rebuild market share in one of the largest markets for U.S. wheat in South America, just in time for harvest of the 2012 wheat crop.

"We are glad to see this opportunity for trade come to fruition at a time when Kansas farmers are gearing up for harvest of a high-quality Hard Red Winter wheat crop that is well-suited for the Colombian market," said Jay Armstrong, Kansas Wheat Commissioner from Muscotah and a board member of the U.S. Wheat Associates.

Implementation of the FTA will eliminate all tariffs on U.S. wheat imports into Colombia. The agreement creates a level playing field for U.S. wheat farmers, as export competitors Canada and Argentina already enjoy duty-free access to the market.

"Our extensive efforts over the nearly six years since the agreement was first signed have finally become a reality and U.S. wheat exports will now compete on an equal basis with other major exporters," said Alvaro de la Fuente, U.S. Wheat Associates (USW) regional vice president for South America.

Colombia is currently the second largest destination for U.S. wheat in South America. In marketing year 2010/11, Colombia imported about 800,000 metric tons of U.S. wheat from five of the six U.S. wheat classes.

Potentially, Kansas wheat exports to Colombia could increase by nearly $12 million each year, according to the USDA Foreign Agriculture Service.

However, the U.S. must overcome trade competition from existing trade agreements such as the MERCOSUR (which includes Brazil, Argentina, Uruguay and Paraguay) and the Canada-Colombia FTA, which was approved last year.

"We have already started the push to win back the wheat export business we lost without this FTA in effect," said Randy Suess, a wheat farmer from Colfax, Wash., and chairman of the USW. "Based on our work, we know this agreement, and others like them, will help us rebuild and expand markets, grow our economy here at home and remain the most reliable supplier of wheat in the world."

Provisions of the U.S-Colombia FTA state that more than 80 percent of U.S. exports of consumer and industrial products will become duty-free. These include agriculture and construction equipment, building products, aircraft and parts, fertilizers, information technology equipment, medical scientific equipment, and wood. More than half of U.S. exports of agricultural commodities to Colombia will become duty-free, including wheat, barley, soybeans, beef, bacon and most fruit and vegetable products. Meanwhile, Colombia will export a number of tropical fruits, plus a variety of textiles to the U.S.

The U.S. wheat industry has been highly supportive of the FTAs with Colombia, South Korea and Panama and other free trade measures.

"All three of these pacts are important to wheat farmers, who depend on exports to sell about half of the wheat we grow every year," said Erik Younggren, a wheat farmer from Hallock, MN, and president of the National Association of Wheat Growers (NAWG). "The implementation of both the U.S.-Colombia and the U.S.-Korea FTAs gives us encouragement that we will soon see the agreement with Panama complete in the very near future."