Peterson Says “Time to Wake Up”—China Trade Predictions Affirmed

(WASHINGTON, DC) – You may not have noticed, but the United States Department of Agriculture (USDA) trade analysts have revised their estimates of China’s grain reserves, and it’s not good news for Minnesota farmers.

The free traders in Washington, D.C., have been telling everyone that China represented almost endless market opportunity for U.S. farmers and agricultural exports.

Many of us were skeptical of this view and in fact I repeatedly criticized predictions of a China market for grain farmers. In my view, growers were being sold a world trade “bill of goods” with regard to China opportunities when there were actually no real prospects. In the trade battles during the last decade, this is a story that we heard over and over again.

Recently USDA officials announced that they now believe China has nearly quadruple the amount of grain reserves as previously thought. In fact, the reserve is now estimated at 54 million metric tons, which is over 13 million metric tons more than all the wheat grown in the Great Plains in an entire season.

New estimates by the United Nations’ Food and Agriculture Organization show 362 million metric tons in reserve, over 12 times its estimates in September.

It is pretty clear to me that China is not going to be a market for U.S. grain farmers -- in fact, they may soon become a serious competitor.

As a senior member of the House Agriculture Committee I have worked to improve the farmers’ input into the world trade talks process and fought attempts to pass trade agreements that feature little more than "lip service" for agriculture.

Farmers have been slowly realizing that the repeated promises made to them by commodity group leaders and political leaders of new markets and strong prices through new trade agreements are unreliable at best, and totally bogus at worst.

Upcoming efforts by the President and some Congressional leaders to pass so-called "fast track" trade negotiation authority and the Free Trade of the Americas Act are more examples of measures being sold on the backs of farmers.

It is my hope that most farmers now understand that it is better to retain control over the market and the process before moving forward with more failed trade policy. The farmers know they must have markets for their products but, more importantly, they also know that they must first have an adequate price and fair competition.

-30-