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Dick Davis Column: Winning the Global Food Fight |
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Written On: November/December 2005 |
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Written By: By Richard S. Davis - President, Washington Research Council |
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Take nothing for granted in a global economy. We’ve learned that lesson as we’ve watched manufacturing and technology jobs disappear, seen our aluminum industry decimated by rising energy prices, and even as we’ve witnessed competitiveness battles across the state lines with Idaho and Oregon.
Washington agriculture—that miracle of natural resources and man-made dams and transportation systems—faces familiar competitive pressures.
Desmond O’Rourke, an international food-industry consultant and retired Washington State University economist, describes the challenge: "Worldwide, we’ve seen a tremendous increase in the production capacity of our competitors." China, he says, doubled production of fruits and vegetables in the last decade, while Central Asian states of the former USSR have become major grain producers.
Further, he says, "Our farms face an extra cost our competitors don’t. ... (Their) competitiveness is being whittled away by a myriad of regulations" imposed by federal, state and local governments.
Washington agriculture has generally benefited from substantial investment in research and technology, boosting productivity and more than offsetting our higher labor, land and operating costs. O’Rourke worries that reduced federal investment in university-based agri-science research jeopardizes our technology edge.
We should be concerned, but not alarmed.
"I am not afraid of competition," says Valoria Loveland, head of the state department of agriculture. Fresh from a trade mission to China, Loveland points out that we still sell apples to the Chinese, despite their increased production.
Our comparative advantage is clear. No one beats Washington on the quality and predictability of food products, she says. If you provide customers with the quality they want and deliver consistently and on time, there will always be a market.
About 13 percent of the state’s economy stems from agriculture. That includes what farmers receive for the product and value-added food processing. About 170,000 people work in agricultural production and processing, most of them full-time, according to Loveland.
The industry continually evolves. O’Rourke says we’ve seen a 20 percent reduction in acreage for apple production since 1997. Yet, Loveland says, "We’ve taken apples out and put cherries in; we’ve taken apples out and put wine grapes in."
Of course, we’ve also seen orchards replaced by housing and commercial development.
It’s a tough business, made much tougher by high energy prices and water shortages.
"For the first time since the Great Depression, a gallon of fuel is worth more than a bushel of wheat," says farmer and state senator Mark Schoesler, R-Ritzville.
Schoesler recognizes that public policy affects costs and that costs matter. The state’s high minimum wage and unemployment insurance taxes hit labor-intensive agriculture hard. He points out that while people tend to be sympathetic to agriculture, unions and environmentalists exert substantial influence in the Legislature.
Perhaps even more than taxes, water policy looms as the critical factor affecting agriculture in the Columbia Basin, where irrigation has turned arid soil into productive farmland. Too much water has been drained from the aquifer. Schoesler wants to see federal and state government move forward on the second half of the Columbia Basin Project (the first half was completed a half century ago) and release water to assure sustained agricultural development. Gov. Christine Gregoire approved funding for research to identify affordable water for farms in the region and endorses increased storage capacity.
Schoesler sees progress—"you have to be optimistic to be a farmer in the first place"—and believes Washington agriculture can take on the world. "We have the quality to beat the Black Sea boys," he says.
Loveland, while recognizing the challenges, thinks we’re in good shape, citing expanding market opportunities. Never-theless, we should heed O’Rourke’s counsel. While he also believes Washington farmers will do well in premium markets, he cautions that we have experienced a slow attrition of our competitiveness. "The other guys are getting better," he says and we’re not doing enough to improve.
As Washington’s agricultural industry confronts the familiar challenges of globalization, our producers and processors start from a position of strength. A prosperous future is within reach, but only if we take nothing for granted.
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