State Agriculture Commissioner Strain: Global trade agreements vital to industry

Louisiana Commissioner of Agriculture Mike Strain stressed the importance of trade in the future of Louisiana’s agriculture markets, Wednesday, at a St. Mary Chamber of Commerce luncheon held at the Forest restaurant.
Strain, who was appointed in February to the National Agricultural and Science Board, extolled the virtues of investing in national and local agriculture, while calling for a modern resolution to exporting to Cuba, and taking part in competing in the global agricultural market.
“We are going to talk a little bit about trade,” Strain said. “Sugar, in just St. Mary (Parish), (makes) $90 million a year. When you think about what is necessary to advance the economics of this state and this country, it’s simple.”
“The natural resource industries are the foundations of the economy. Those are the original dollars,” Strain said. “Before any state or nation can be great, it must first be a nation or a state that is great in agriculture. It is the foundation, and it is the fundamental foundation of our civilization and our society. Trade is critical.”
Strain pointed to the nation of Cuba as an example of a “non-sustainable” economy starved of agricultural stability, forced to import 90 percent of its food only to remain in consistent national debt.
“We’ve had positive trade surplus in agriculture for 50 years,” Strain said. “It’s been as high as 50 billion (dollars). Right now it’s about 20 billion. If we can increase our trade, the value of that is going to move up markedly. Our trade surplus is like the balance on your credit card. A positive trade surplus brings down the amount of money you owe, right? You cannot have a net negative balance and be sustainable. That’s the problem in Cuba right now. Their economy is so bad that they are running net trade deficits and that is non-sustainable.”
Strain wants the US to come to terms with Cuba concerning the two countries’ currently displaced ambassadors. Once we are on amicable diplomatic terms, Strain believes the US could capitalize on the untapped export market in Cuba.
He also provided advice for potential growth in Louisiana’s agricultural economy.
Strain cited the increase in the DOW Jones industrial average and the price of oil against the diminished prices of Louisiana’s commercial agricultural commodities as proof positive that trade is necessary to raise those commodity prices in the marketplace.
“This happened from 2015 to 2016. Debt from farms is increasing and net income is decreasing. Why is that?” Strain asked. In the heyday, when we were making eight dollar corn and $17 beans, two dollar cotton and $60 sugar, everybody went to their banker.”
He asked, “Are there any bankers in here? Well, thank you for those loans. No, we try to repay them. The key is, under the Farm Service Agency, these loan guarantees stay in place so that they can back up our small banks to make loans to the public. The average farmer in commercial production has a production loan between one and $1.5 million.”
For now, since the prices of the state’s agricultural commodities are down, it seems the best course of business for the average farmer, is to see to their safely rated loans until trade can be fostered to raise the prices of agricultural commodities, and keep our farms from looking like Cuba’s economy.
However, Strain has ideas for what the state can do in the meantime.
He said that as the head of the nation’s agriculture commissions, his marching orders from Washington have been to push for trade, as he is faithfully doing. Yet, the other aspect of massaging the state’s economy toward broader trade potential, aside from diversification and loan stewardship, according to Strain, is infrastructure.
Of his meetings in Washington on infrastructure priorities, Strain said, “Our big ticket items are: The inland waterways, the locks and the dams, ports and harbors, rail and rail infrastructure, rural highways, broadband and water. The future of economics in this country is going to be whether or not you have water, broadband, and access to markets. What have we got here? You can get pretty good broadband here, unless you are in a plane, of course… and we have access to water.”
Strain says that President Trump’s plan to fund state infrastructure works by an 80 percent to 20 percent ratio. Whereby, Washington pays 20 percent, and Louisiana is expected to come up with the other 80 percent of the funding necessary to see to our “big ticket items.”
Strain says that he is currently working with lawmakers in Washington to align the expectancy of reasonable permit acquisition with standard expectations for project timetables.
“If it takes 10 years to get a permit to do any of this,” Strain has said to the commission, “none of us will be here” (citing term limits and re-election possibilities).
“So we are starting work on streamlining the permitting process for these projects,” he continued. “Now, the next thing I want you to think about is that we have to double food production. We have to increase it 50 percent by 2030.”
Strain closed by saying, “You see that ol’ truck running down the road with that ol’ dirt falling off all over the place, those ag trucks, they’re moving money. And that is going to continue to grow, but we have to invest in research and development to get there. We don’t trade with Cuba because of the current laws that I’ve been an advocate of changing.”
“Americans are going to send two billion of our American dollars to their relatives in Cuba, so they can buy food this year,” Strain concluded. “And, they’re going to buy their rice from Vietnam. They’re going to buy food from Brazil. They’re going to buy products from all over the world. And tourists are going down there, and they’re going to buy food from other countries. And that nation is next to us. Under the Monroe Doctrine, Cuba is our business. All we want to do is sell them something and get our money back.”