Illinois
COMMENTARY

Trade agreements and co-ops create a brighter future for agriculture

The outlook for agriculture continues to be challenging. Pork consumption has increased, and prices have risen to the point where producers will earn their first profits since 1997. However, corn and soybean prices are still near cyclical lows, and recent increases are largely attributable to fears of drought-reduced crop yields rather than a surge in demand. With the effects of the depressed farm economy still weighing on farm families, I cannot declare a full recovery. But I believe Illinois agriculture is positioned to benefit once the turnaround is complete. Under the direction of Governor Ryan, the Illinois Department of Agriculture has worked through this economic downturn to open new markets.

Joe Hampton

Access to world markets is vitally important to Illinois because nearly half of its grain and more than $3 billion of its agricultural products are exported each year. In March, I led a trade delegation to Mexico with the intent of capturing a greater share of that country's grain market. Mexico already is our third leading trading partner, but the potential for sales is much higher than the current $476 million. The Mexican economy is improving, and as the standard of living gets better, its residents are eating more meat. The switch to a diet rich in animal proteins has greatly increased demand for animal feed, and Mexican farmers can meet only half their country's grain requirement. Representatives from 12 farm states in Mexico are scheduled to come to Illinois this fall, and I am optimistic the visit will lead to additional export sales.

The trade negotiations with Mexico followed the Governor's historic mission to Cuba. While not as large or developed as Mexico, Cuba also has a need for agricultural products. Right now Cuba imports grain from Europe and Canada, but Illinois' closer proximity to the country would allow it to fulfill these needs more cheaply. Our farmers cannot export to Cuba because of U.S. economic sanctions, but the contacts made on the mission laid the groundwork for a future relationship if the sanctions are lifted.

The governor and I applaud the approval of permanent trade status for China and continue to push for an expansion of the ethanol market. China is the biggest and most important emerging market in the world, and the vote to grant it normal trade relations gains Illinois farmers access to a market of more than a billion people. Meantime, we continue to monitor Illinois Senator Peter Fitzgerald's bill to ban the fuel-additive MTBE and protect ethanol in the Reformulated Fuels Program. If the oxygenate requirement were eliminated, the consequences would be far reaching. Not only would Illinois farmers lose a market for a minimum of 70 million bushels of corn, but also the jobs of 800 workers at ethanol plants and another 4,000 workers in ethanol-related industries would be impacted, and the state's $1 billion investment in the ethanol industry would be jeopardized.

The Illinois Agriculture Department is also advancing fundamental changes that provide new opportunities for producers. With our encouragement, the FY 2000 Illinois budget contributes $1.7 million toward the development of the state's first producer-owned pork processing plant and $2 million for a new ethanol plant owned by producers. Increasing producers' ownership of the marketing chain is essential to agriculture's long-term stability, and cooperatives like these will enable producers to earn additional profits from the processing and marketing of their raw commodities.

Agriculture contributes $23.5 billion annually to Illinois, economy and employs almost 25 percent of the state's workforce. Governor Ryan understands the profound impact the industry has on the lives of Illinois residents. With the support of the state's representatives in Washington, he and I are committed to improving the profitability of our farms and helping Illinois remain competitive in the global marketplace.

The opinions and views of guest commentators are their own and may not represent those of the Association of Illinois Electric Cooperatives or the electric co-ops of Illinois.

4 ILLINOIS COUNTRY LIVING • JULY 2000