Wednesdays from Washington: Food & Ag Trade Insights with Joe Glauber

This blog post was written by Arizona State University graduate student Ali Kelley. In addition to studying Food Policy and Sustainability Leadership at ASU, Ali is the Marketing Manager for Annie's. The final day of our DC immersion brought the exciting opportunity to speak with Joe Glauber, who spent 30 years at USDA – including 6 as chief economist – before assuming his current posts as senior research fellow at the International Food Policy Research Institute (FPRI) and visiting scholar at the American Enterprise Institute (AEI).[1] An expert on global trade, Glauber delivered a compelling overview of U.S. agricultural consolidation, before enlightening us with his perspective of the Trump administration’s farm and trade policies. At the time of our meeting in early March, COVID-19 was just beginning to take root in the U.S. Our context has since changed markedly and Glauber has been among the thought leaders advocating for a balanced government response to promote longer-term global stability. Glauber set the stage by sharing a few jolting facts about our modern food system. Today, there are 2 million U.S. farms, compared with more than 6 million pre-WWII. Most of this consolidation occurred between 1940-1970, Glauber explained; the curve has since flattened. Furthermore, 85% of the current value of agricultural production (~$400B) comes from only 300,000 farms. Federal farm policies overwhelmingly support this group. The impacts of domestic farm policy extend far beyond our borders, Glauber told us. Farm support policies in the U.S. and other WTO member countries must be reformed, he said, to advance shared food security and sustainability goals. The key is invest enough at home to support investment and innovation in food systems, without investing too much to put trading partners at an unfair disadvantage.[2] Glauber has questioned the Trump administration’s excessive farm supports in 2019,[3] which at more than $22 billion, were the highest subsidies we’ve seen in 14 years. “I was surprised… that it didn’t attract more attention. What’s unique about this is, again – it didn’t go through Congress” he said in a NPR interview last December.[4] In collaboration with the International Institute for Sustainable Development (IISD), Glauber and colleagues at IFPRI recently published a report proposing reforms to WTO rules on domestic farm support. Their aim is to essentially “level the playing field” with a simpler set of policies that create more transparency and keep the larger players in equilibrium, while allowing for new countries to enter under favorable terms. Specifically, they recommend the WTO evolve domestic support policies to: (1) set new limits, based on objective measures; and gradually reduce these limits over time; (2) allow differential treatment for developing countries as they on-board; (3) create limits on support per category; (4) exempt government-purchased food from limits, so long as the government price is below an agreed international price.[5] Similarly, Glauber has advocated for open, balanced trade policy throughout the COVID-19 crisis. The protectionist argument for export bans, he argues, is shortsighted and factually off-base. Keeping our borders open and our trade relationships intact, he suggests, is the only way to mitigate food insecurity and prevent long-term recession. While market signals may be confusing – empty grocery shelves, but inconceivable amounts of farm-level waste!? – Glauber provides data to show that global supply of staples (i.e., rice, wheat) is healthy, and furthermore that good harvests are expected for staples in 2020. If we impose bans now, Glauber warns, we risk entering a food price war akin to that of 2007-2008. During this time, U.S. export bans had the effect of raising global prices, which caused other countries to enact bans, as well. A vicious cycle.[6] Committed to preventing this outcome, Glauber and his team as IFPRI have created a real-time, digital tracker of global food trade policy in response to COVID-19. This new source of information and accountability can help influence policymakers and educate the public on the importance of open trade. Our meeting with Joe Glauber awakened me to the complexities of global trade and made me eager to better understand the impact of domestic farm policy abroad. I feel fortunate to have heard from Glauber when we did, on the brink of profound change. Sources International Food Policy Research Institute, Joseph Glauber (2020) https://www.ifpri.org/profile/joseph-glauber International Food Policy Research Institute, “COVID-19 Food Trade Policy Tracker” (2020) https://www.ifpri.org/project/covid-19-food-trade-policy-tracker International Institute for Sustainable Development, “What National Farm Policy Trends Could Mean for Efforts to Update WTO Rules on Domestic Support” (April 2020) https://www.iisd.org/sites/default/files/publications/farm-policy-trends-en.pdf Joseph Glauber, “How farmer trade aid undermines the U.S. in world markets,” The Hill (8/05/19) https://thehill.com/opinion/international/456246-how-farmer-trade-aid-undermines-the-us-in-world-markets NPR, “Farmers Got Billions from Taxpayers in 2019, And Hardly Anyone Objected” (12/31/2019) https://www.npr.org/transcripts/790261705   [1] IFPRI, Joseph Glauber [2] IISD “What National Farm Policy Trends Could Mean for Efforts to Update WTO Rules on Domestic Support” [3] Joseph Glauber, “How Farmer Trade Aid Undermines the U.S. in World Markets” [4] NPR,  “Farmers got billions from taxpayers in 2019, and hardly anyone noticed” [5] IISD “What National Farm Policy Trends Could Mean for Efforts to Update WTO Rules on Domestic Support” [6] https://www.ifpri.org/blog/covid-19-trade-restrictions-are-worst-possible-response-safeguard-food-security