Warning against protectionism

Press, 29 July 1978, Page 22

Warning against protectionism

From JOHN HUTCHISON San Francisco.

Defeat of protectionist barriers against foreign trade is important to California agriculture, says an analysis by the world’s largest commercial bank, based in San Francisco. The Bank of America’s “California Outlook: Agriculture 1978” Warns that “a spirit of protectionism, developing in many countries, could reduce the State’s export of farm products. “Agricultural commodites,” the report says, “are of increasing importance and have high potential for further growth,” adding that proposed legislation, at both the State and federal levels “could weaken California’s position as a strong competitor in the agribusiness sector.”

In spite of two years of unprecedented drought, California agriculture delivered a record performance in 1977, but. with 1978 one of the rainiest seasons in history, Californian farms have recently suffered from soil erosion, flooding, lost production and the delays in planting vhich make for the uncertainties associated with late harvests.

Even so, the bank predicted that a 1 per cent drop in crop receipts will be more than offset by a 4.5 per cent increase in sales of livestock and livestock products.

Gross farm income is expected to set a record of almost $9900M, but net income is expected to fall 6.6 per cent.

California is the leading American agricultural State, and ranks third in farm exports, exceeded only by Illinois and lowa, which lead because of their huge jrain and soyabean shipments. The principal farm exports from California are cotton, wheat, almonds, grapes and oranges. It also is a major world supplier of rice, lemons, prunes, walnuts, cottonseed, tomatoes, peaches, lucerne and lettuce.

Freedom of trade, the bank report says, is essential to the expansion of markets abroad for these crops. Noting the increasing signs of protectionism, the “Outlook” editor writes:

“A top priority for the United States negotiators in the multilateral trade negotiations (in Geneva) is to preserve the existing access to major markets for United States exports. In this connection, it is important also that members of the United States Senate (which must ratify any multilateral trade agreements) work to defeat the building of new protectionist trade barriers."

Although the “Outlook” reports that the strongest force creating cash flow for California agriculture is the recovery of the cattle industry, with wholesale beef prices up 23 per cent over last year, it fails to note that California cattlemen make common cause with other American beef producers in demanding drastic limits on beef imports.