In addition to tight supplies, much of the increase in net farm income is due, in part, to increased demand for agricultural products -- both domestically and abroad.
While agriculture represents the lone bright spot in the nation's overall trade picture, last week's report on America's trade balance revealed the gap between agricultural imports and exports is narrowing... falling 20-percent in 2003 alone.
This week, the U.S. finalized its sixth free trade deal. Known as the Central American Free Trade Agreement, or CAFTA, the accord is patterned after the 10-year-old North American Free Trade Agreement. And, as was the case with its predecessors, not everyone is happy with the terms.
The Bush Administration is hailing this week's Central American Free Trade Agreement, or CAFTA, as an important milestone toward achieving a hemisphere-wide free trade area. The agreement is with four countries that produce, among other things, sugar.
Those countries will see their current quota of 111,000 tons of sugar rise by 85,000 tons next year... an increase of more than 75%. The amount they can ship to the U.S. will then increase two percent a year for the next 15 years. This does not please U.S. sugar growers.
Last week, governors in four states urged negotiators to keep sugar out of the agreement ... stating there are 11,000 sugar beet producers and 372,000 industry jobs that could "devastate" rural communities if lower-priced sugar from Central America is allowed into the U.S.
American Unions were also upset with CAFTA. They said the agreement needed stronger labor protections. And the textile industry is concerned the deal will open their beleaguered industry to even more foreign competition.
However, USDA secretary Ann Veneman said the agreement would be "positive news" overall for U.S. agriculture because it could increase sales to 31 (M) million consumers.
For its part, the Central American nations will phase out import restrictions on U.S. dairy products, poultry, rice and white corn.
With textile makers, some unions, and sugar growers opposing CAFTA, President Bush could be facing a major trade battle on Capitol Hill in the midst of next year's presidential campaign.