Measuring changes in agriculture for the American Southeast after NAFTA

In 1994 the North American Free Trade Agreement (NAFTA) was signed between the United States, Canada, and Mexico. The pact's purpose was to eliminate trade barriers in order to enhance economic interactions between the three parties. This paper intends to gauge the effect of NAFTA on agricultural production and farmer well-being in the Southeastern portion of the United States, specifically for smaller farms (499 acres or less). Over the last twenty years farm consolidation and a trade deficit have developed in the fruit and produce sector for the United States which may be related to NAFTA. Other crops, specifically the grain commodities, however, have benefited from industry growth. Using a novel dataset covering all fifty US states in the time span between 1992 and 2007, this paper compares Midwestern commodity producing states and industries against Southeastern predominately fruit and vegetable growers pre and post-NAFTA. It is apparent from the data gathered there are some stark differences between the two regions. Results infer that the exogenous effect of NAFTA has corresponded with both consolidation of farms and the reduction in percentage of smaller farms in the Southeast. From a policy perspective, my findings imply that trade deals such as NAFTA lead to redistributive outcomes and policymakers should consider ways to support those adversely affected.