| TEMUCO, Chile,
June 11, 2003, The Miami Herald: The U.S.-Chile
free-trade agreement signed by officials Friday in Miami
will mean greater opportunity for some in this small South
American nation. Successful export products for Chile,
such as wines and fresh fruits, will consolidate their
access to the lucrative U.S. market.
But for the more than 200,000 farmers in southern Chile
who specialize in traditional agricultural products
such as wheat, dairy products, beef and beets -- which
they overwhelmingly sell only at home in Chile's internal
market -- free trade with big brother to the north spells
impending economic and social disaster.
Southern Chilean farmers are campaigning vigorously
to defeat the agreement when it comes up for a ratification
vote in Chile's Congress this fall.
Farmers like Nicolas García, 47, whose family
has been growing wheat and oats on their farm just north
of the southern Chilean city of Temuco for more than
García says that the tranquil, verdant countryside
has fostered a wonderful lifestyle and excellent farming
but that free trade with the United States will mean
the vast majority of the tens of thousands of wheat
farmers in the region will be forced off their land
and out of work.
''It's a case of the biggest and strongest eating the
smallest. We just cannot compete with U.S. subsidies,''
Last year, President Bush signed into law a farm bill
raising U.S. agricultural support by $180 billion, the
equivalent of an 80 percent increase in subsidies for
farmers each of the next 10 years. Those subsidies are
aimed in part on keeping the cost of wheat and other
commodities low, experts say.
In 2001, U.S. agribusiness sold wheat abroad at a price
44 percent less than what it cost to produce it, says
the Minnesota-based Institute for Agriculture and Trade
Policy, based on government statistics on production
and transportation subsidies.
Below-cost U.S. grain exports are pushing down world
prices, thereby undercutting competition in developing
countries that cannot compete in a subsidy war.
''Family farms in the U.S. don't want to rely on government
handouts. They would prefer that the market be restored,''
said Sophia Murphy, trade director for IATP.
To counter such distortions in the global market, Chile
has employed a system called the ''price band'' since
1983 to stabilize the price of its wheat and sugar imports.
But in the trade agreement, U.S. negotiators insisted
on eliminating the price band. Chile, in the final round
of negotiations last December, relented in exchange
for the elimination of tariffs on all products of both
countries. The price band is to be phased out beginning
Osvaldo Rosales, Chile's trade negotiator, said it
surrendered because it believes the country will be
''There is a sufficient lapse of time so that we would
be capable of initiating projects to improve our productivity,
technology, finance so that our farmers can be competitive
with the United States,'' he said.
But officials at the Southern Agriculture Consortium,
which represents the traditional farmers in Chile's
southern regions -- about 70 percent of Chile's farming
sector -- say they're already competitive. The group
points to studies showing that Chile has the world's
best rate of productivity per acre of sugar beets and
is sixth worldwide for productivity per acre in wheat.
In addition, due to its particular climatic conditions,
only wheat, sugar, dairy products and livestock grazing
are economically feasible in Chile's south. These Chilean
farmers do not have the option of moving on to alternative
crops if their market disappears.
''Our government has cheated us. They promised not
to remove the price band in this free-trade agreement,''
said Manuel Riesco, a farmer and the president of CAS.
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