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Farm groups shocked at UC economist's testimony in WTO dispute
(Sunday, Sept. 7, 2003 -- CropChoice news) -- Harry Cline, Primemediabusiness.com, 09/02/03: California rice, wheat and cotton producers are infuriated at a
prominent University of California agricultural economist who testified
recently on behalf of the Brazilian government in World Trade
Organization (WTO) dispute with the U.S. cotton industry.
"Unbelievable, dumbfounded, disappointed and shocked" are three of the
reactions from farmers and other agricultural leaders who learned that
Dan Sumner, director of the University of California Agricultural Issues
Center in Davis testified in Geneva in late July that U.S. cotton farm
programs have distorted world cotton prices to the detriment of
Brazilian cotton farmers.
Sumner acknowledged that he was hired by an international law firm
representing Brazil in its complaint against U.S. cotton. He said he was
acting as a private, consulting economist, not as a representative of
the university.
Sumner, a former assistant secretary for economics at USDA and former
board member of the Commodity Credit Corporation, said his report to a
WTO panel investigating Brazil92s complaints about the U.S. cotton
program was an unbiased economic analysis.
"I would write exactly the same report for USDA if it asked me to, but
they probably would not use it," said Sumner.
"It was exactly the case the National Cotton Council states when it goes
to Congress," said Sumner. "The U.S. cotton program is what keeps the
U.S. cotton industry afloat. "Without it a bunch of cotton farmers would
not make it. They would shift to other crops, and the U.S. would not
produce as much cotton and not export as much cotton."
Distorts trade
Sumner's analysis said the U.S. cotton program distorts world trade.
Sumner has worked with several commodity groups in California.
Pistachios are
one, and rice is another.
However, Charlie Hoppin, chairman of the California Rice Industry
Association, said Sumner may not work with the rice industry again.
"I would be afraid to use him again," said Hoppin. "And I would think
many segments of agriculture who now work with the university would
start to become reluctant to work with the university that would allow
someone to testify for a foreign government against U.S. farm policy."
Hoppin was among a group of representatives from cotton, wheat and rice
who met with Sumner in mid-August to express their displeasure over the
actions.
"The difficult part of this is Dan92s credentials. He is a widely
recognized UC economist; confidant to the administration on trade and
other issues with high security clearance," said Hoppin. "There is a
real moral issue with what Dan did."
Buttonwillow farmer
Mike Frey, Buttonwillow, Calif., farmer and chairman of the California
Wheat Commission, was one of those who met with
Sumner.
Sumner provided policy advice to the secretary of agriculture on NAFTA
and GATT negotiations and the 1990 farm bill. He resigned earlier this
year from the USDA ag policy advisory committee.
"What concerns me is that someone involved with the university of
California system who is intimately involved in setting national U.S.
farm policy can so easily sell his services to a foreign government,"
said Frey. "To me it is a clear and obvious conflict of interest. It
really surprises me that there is not a system of checks and balances
for this type of activity within a university that was built on the
backs of California and American agriculture."
Fresno County, Calif., cotton producer Don Cameron and chairman of The
Cotton Foundation, said Sumner92s actions "were unbelievable. "I was
very disappointed to hear what Dr. Sumner had done," he said, adding
that when farmers met with him Sumner did not consider his trip to
Geneva on behalf of the Brazilian unethical.
"I think I would do it again if asked," said Sumner. "I called it like I
saw it. The correct information helps the policy process."
Sumner acknowledged that a Brazilian win in the WTO could impact federal
farm policy on not only cotton, but other commodities as well.
"Clearly, something has to be done, but for the life of me I do not know
what we can do at this point," said Frey.
Those angry at Sumner92s actions stopped short of asking that he be fired.
'Serious harm'
Earl Williams, president of the California Cotton Ginners and Growers
Associations, said Sumner92s testimony "did serious harm to the U.S.
cotton industry - serious harm to other commodity groups as well.
"And we are going to bring pressure to bear on the university that would
allow someone from a public, taxpayer supported institution to have such
latitude that can reap such harm on the supporters of the university,"
said Williams.
"Dr. Sumner is a brilliant economist...well respected, but
apparently
terribly naive when he says things like cotton farmers can plant other
crops without the farm program," said Hoppin. "Agriculture is in a very
delicate balance right now and a big increase in acreage for one crop at
the expense of another crop could be disastrous.
"I would have hoped that if Dan or someone with his reputation who
disagreed with U.S. farm policy would use that knowledge to improve farm
policy within the American agricultural industry and not go to a foreign
country to make his arguments."
Mark Lange, president and CEO of the National Cotton Council has known
Sumner for more than 20 years, was "dumbfounded" to learn what Sumner
had done. He was particularly surprised to learn of Sumner92s appearance
on behalf of the Brazilian government just a month after the UC
economist testified that more stringent farm program payment limitations
for farmers would hurt American agriculture.
"He may have seen what he had done an academic exercise,
but in an
international court it is a heckuva lot more than an academic exercise
for those of us who have a stake in what we believe is a program that is
fiscally responsive and provides a minimal safety net for U.S cotton
producers," said Lange.
"The U.S. cotton industry and its farm program are not building stocks
and depressing prices and distorting world trade," said Lange.
Extra damaging
Lange believes Sumner's long history with USDA attached more
significance to what he had to say and that was double damaging.
"It is one thing to do an economic analysis, but another thing to go
before a WTO panel and argue Brazil's case against the U.S. for several
hours," said Lange.
Williams had the sharpest words for Sumner's action when he said, "if
this had been a military issue, what Dr. Sumner did would be called
treason." Williams was particularly incensed that Sumner's anti-American
cotton industry stand was taken in a court of world opinion.
"Agriculture is beaten over the head every day by U.S. government foreign
policy. American agriculture is upside down more and more in world
markets and a lot of it is because of our own government92s foreign
policy," said Williams.
As with many trade issues, the Brazilian-U.S. dispute is complex,
according to Mickey Paggi, director of the Center for Agricultural
Business at California State University, Fresno.
Like Sumner, Paggi has extensive experience in U.S. farm and world trade
issues.
Paggi subbed for Sumner at a recent Western Cotton Conference in Fresno
when conference sponsors, Western Cotton Shippers Association, withdrew
an invitation for Sumner to speak in the wake of his appearance in Geneva.
Brazilian contention
The Brazilians contend that because the U.S. is spending more now than
it did in 1992 in support of the U.S. cotton industry, it is violating
WTO policy.
The Brazilians are "painting the issue with an awfully broad brush"
according to Paggi.
Brazil has greatly expanded its cotton production and farmers there are
demanding their government take action against what they perceive as the
culprit for lower world prices, the U.S. cotton program.
"The same people in Brazil who are complaining about the U.S. cotton
program were not long ago complaining about U.S. soybeans. For some
reason they stopped complaining about soybeans and started complaining
about U.S. cotton," said Paggi. "Maybe it is because soybean prices have
gone up."
"If you look at the numbers in the Brazilian92s argument, you would say
they had a case. Iron clad? Maybe not," said Paggi.
"What we are saying is that there are many reasons for the downturn in
world prices - the Asian financial crisis, currency values, faltering
economies, etc." he said. Paggi added that it is a "fairly large
stretch" to say the U.S. cotton program alone is causing the downturn in
world prices." It may be a year or more before the WTO rules on the
Brazilian's complaint, but if the U.S. loses, the repercussions will
reverberate all the way to Davis, Calif.
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