Gabriel Carballal attended the Global Farmer Roundtable in 2012 and farms in Uruguay. The South American nation sits along Atlantic Ocean and shares borders with Brazil to the north and Argentina to the west and south. Like its two neighbors, the nation’s agriculture is quite productive and Gabriel shares his responses to a few questions about how important trade is for his farm and nation.
*English is a second language for most members of the GFN and responses may be lightly-edited for clarity.
Question: The dictionary defines trade as both a ‘noun’ and a ‘verb’ – both definitions describe the action of selling goods and services. How important is trade -and the ability to access markets- to your farming operation?
Answer: I’m a farmer who lives in Uruguay, a South American country with a population of only 3.5 million inhabitants. All we produce (wheat, barley, soybean, corn, livestock, etc.) ends with surplus. So trade and ability to access markets is essential to our operation. A free, clean and agile market is basic for our farming operation.
Question: When talking about trade, emphasis is often placed on the ability to sell products and services (exports). Trade also covers what we buy. How important it the ability to purchase goods and services for your farm (imports)? For example, what are some items that you purchase and/or import that are necessary for your farming operation to be profitable?
Answer: That’s correct. Inputs and local costs are really affected by trade defects. In my country the government tends to affect imports with several taxes and that affect my costs, sometimes to turn a profitable business to an unprofitable one. Our main problem are those goods fully controlled by our government like energy and fuel (government monopoly) which are used for transferring “wealth” from the rural to the urbanized areas. That, plus big import taxes we have (up to 100% of the original value) are jeopardizing our operations.
Question: In your opinion, how important are trade agreements to your farm? To your community. To your country?
Answer: I believe trade agreements are fundamental, not only for our farm but for the entire country. It’s a demonstration of intelligence and evolution. There are numbers that shows how much money decants in actual commerce. It is said that less than 5% of the final price of any product goes to the farmer, to the originator. So any trade agreement that eases transactions and makes a flatter world must be a priority.
Question: What type of infrastructure is needed to efficiently move products in and out of your farming operation?
Answer: Basically, logistics infrastructure. Routes, roads, ports. Transportation costs are huge here in Uruguay. 3 to 8 times our neighbor’s. With those numbers, profit moves away. Taxation is also a wealth kidnap. But this times forces us to compete in a global world with local costs and infrastructure. Unfortunately, rural efficiency is not the main concern right now.
Question: We are talking a lot about tariffs and trade wars all around the world right now. Are there other barriers to trade (non-tariff barriers) that are impacting your farming operation that are of concern to you?
Answer: Of course. Labeling is a perfect demonstration. That impacts our business clearly, a wealth custom where money disappears with almost no return.
World commerce is tricky and absorbing but also interesting. Non-tariff barriers are usual and we have to deal with all the time. Misinformation, misleading, lying, those are all types of “confusing” trade. Increasing each and every day…
Question: In one or two sentences, what message do you want to send your country’s trade negotiators / policy leaders regarding the importance and impact of trade access or barriers on your farming operation and the broader community?
Answer: Everything that make markets “dirtier” cuts wealth from all the commerce chain. That’s a lose-lose strategy. Be sure that each $ earned multiplies vastly. It’s not necessary to harvest that $ earlier. Actual price situation is a demonstration of what happens in an artificially manipulated market…