By Clayton Yeutter
© Copyright Agri-Pulse Communications, Inc.
By now most Americans know that we have the largest global trade deficit in the history of our country. And almost all of us have heard about our huge bilateral trade deficit with China, the largest ever with any nation. But too few of us realize that one sector of our economy, agriculture, is a big winner in global competition.
USDA forecasts agricultural exports to reach a record $137 billion for fiscal year 2011, with a trade surplus of $44 billion, the highest it’s ever been. China has now displaced Canada, Mexico and Japan as our largest market for agricultural products. Exports to China alone are estimated at a record $21 billion.
Not bad for an industry that many mistakenly think of as an old fashioned “commodity” business. It’s about time we realize that US agriculture is a high-tech enterprise. Farmers today must understand gene splicing, stacked traits, and a whole host of other breeding techniques and operational technologies that would send most of us back to our textbooks. Fortunately, these are all areas in which American science leads the world.
That’s because we’ve been making the necessary investments in research, technology, and “extension” to bring it about.
USDA and the land grant universities have done their part, principally in basic research. The private sector has done its part in applied research. And both have done fine jobs of distributing the results to farmers. No other American industry does it as well, and no other country does it as well in agriculture as we do.
So what’s the payoff? The U.S. has spearheaded new biotech crops that are resistant to drought, insects, and other pests, while also producing higher yields. We’re on the cusp of delivering plants with greatly improved nutrition, such as higher protein content, more vitamins, minerals and healthy fiber, and decreased allergens. For those who seek to meet the challenge of feeding 10 billion people in this world by the middle of this century, this is how to do it.
Why then do biotech innovations often languish in regulatory limbo? It’s because new biotechnology plants must be approved by the USDA’s Animal & Plant Inspection Service (APHIS), whose actions are plagued by opposition from activists.
APHIS must be prudent in its decision making, of course, but it must also adhere to sound science. Irrational fears should not trump science, and should not interminably delay regulatory decisions.
Companies that invest hundreds of millions of dollars in yield enhancing, cost reducing, or nutrition-enhancing research are losing faith in this regulatory process. By law APHIS is required to approve or disapprove new plants within 180 days, but that time limit has been stretched as long as five years.
In addition, once activists can no longer delay regulatory approval, they mount endless litigation in the courts. The consequence: America’s cutting-edge research and development pipeline is producing only a trickle of new products, while major competitors like Brazil, Argentina and China are ramping up their biotechnology industries, intent on jumping ahead of us in world markets.
As one biotech executive puts it: “Imagine if Facebook had been confronted by an interminable regulatory process... before it could roll out its services.” It assuredly would not today have a multibillion-dollar market cap. As he further noted, “American agriculture is one of the few bright spots in employment and trade, but its... continued competitiveness depends on innovation.”
If we don’t fix this problem, we may see what happened to so many other once dominant American industries replicated in agriculture – invented here, then handed-off to our overseas competitors. We’ll never lose our entire food industry, of course, but we could lose major segments of it.
One legislative fix being proposed by Rep. Stephen Fincher (R-Tenn.) would require APHIS to make an up or down decision within its allotted 180 days, with reasonable extensions.
Should the agency fail to make a decision within that time frame, the product would be automatically approved. That is not likely to be a total response to unjustifiable delays, but it would help.
What has happened in American agriculture in the post-World War II period is a spectacular success story. Arguably our most important crop is corn, and we now grow 40 percent more than we did just 20 years ago. Remarkably we do it with a third less energy, a fourth less water, and 30 percent fewer emissions per bushel than two decades ago. That is the payoff we get from biotechnology and other research, and all of us are beneficiaries.
At a time of mounting economic challenges to our nation, there is just no reason not to streamline the regulatory processes for technologies that will benefit the U.S. economically, environmentally, and nutritionally.
Clayton Yeutter was U.S. Trade Representative from 1985 to 1988 and also served as Secretary of Agriculture from 1989 to 1991. He currently serves as director of several major corporations and consults with others involved in international trade, finance and agriculture.
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