Far-flung conversations about export numbers and foreign crop production can feel like a walk down a field row that’s been plowed and planted over and over but remains barren. Sometimes we need to practice “conversation” tillage. And a conversation about a strategy to compete with Brazil is worth having — if it’s not already too late.
The cautionary tale, of course, is well known to cotton farmers of a certain age. The story begins in 2002, when Brazil filed a complaint with the World Trade Organization about the U.S. Step 2 subsidy program. The WTO ruled in Brazil’s favor in 2004. The U.S. and Brazil signed an agreement in 2014 that was accompanied by a $300 million donation from the U.S. to the Brazil Cotton Institute, and Step 2 was shut down.
The result? Brazil is a top global cotton exporter. And U.S. cotton farmers are on the financial ropes.
Brazil’s actions upended the marketing structure for U.S. cotton farmers. Using a different strategy, Brazil now is turning grain markets upside down. Today, the country is the world’s largest soybean producer and exporter, and jockeys with us for the top spot in corn production and exports. The U.S. let that happen.
To understand how we let it happen, look to Warren Buffet’s ABC’s of corporate decay: arrogance, bureaucracy and complacency. U.S. agriculture is there. And we must shed that thinking.
Brazil once learned from us, studied our technology and watched our markets. The tables are turned, and now the teacher must become the student.
Clawing our way back to the top of the global commodity markets demands respecting our competitor, studying them to learn their strengths and weaknesses, and then developing a viable strategy.
Acknowledging that we’ve become lax is merely the starting point. Now it’s time to get to work.