Colombia's president calls a free trade pact finally approved by the U.S. Congress a commercial milestone that will build export muscle, but many of the country's small farmers fear for their livelihoods. Some worry that imports of less expensive, subsidized U.S. goods could drive them out of business. Small farmers help make Colombia self-sufficient in food production but tend to earn very little.

If the prices drop, "we'll have to sell the cows," she said. "What else can you do?"

It's too early to say whether that's a real danger.

But trade pacts always produce winners and losers, and those most at risk are subsistence farmers who, like Jaramillo, live humbly and lack access to capital.

President Juan Manuel Santos was exultant when the U.S. Congress last week finally approved trade agreements with Colombia, South Korea and Panama that dated to the administration of former President George W. Bush.

The Colombia pact, signed in November 2006, had been held up for so long because Democrats in the U.S. Congress said Colombia had not done enough to halt killings of trade union activists.

Indeed, most Democratic congressmen voted against the pact in defiance of the White House, which had argued that Colombia deserved it for being such a loyal ally.

Santos called the treaty "the most important in commercial terms we've signed in our history." He says it will create a quarter of a million Colombian jobs and boost exports by $17 billion a year.

Yet even Santos' own agriculture minister has warned of the risks to small farmers if they aren't adequately protected by the government. Will they be able to adapt as tariffs on imports from the U.S. are gradually reduced to zero? In the case of milk, that will happen in 15 years.

A 2009 study by three Colombian economists, partially funded by Oxfam International, forecast that the country's 1.4 million small farm households will see their income drop by 10.5 percent under the trade agreement. It predicts producers of chicken, pork, wheat, beans and sorghum will be especially hard hit by U.S. government-subsidized imports.

The authors suggest some small farmers could turn to growing coca, the basis of cocaine. Colombia is the world's No. 1 cocaine-producing nation.

The average monthly income for Colombia's small farm households was about $200 in 2005, when small farmers worked 51 percent of land under cultivation, the study found.

Bilateral trade pacts became increasingly popular over the past decade as global trade talks stalled and hopes for a Western Hemisphere-wide treaty evaporated. But they tend to create imbalances, favoring some industries over others.

Economists continue to debate whether Mexico, on balance, was a net beneficiary of the 1994 North American Free Trade Agreement it forged with the United States and Canada.

Mexico gained in technology transfer and investment from NAFTA, and consumer prices dropped dramatically in Mexico, but there's disagreement on whether farming benefited.

U.S. agriculture was an unquestionable winner, with many small Mexican farmers unable to compete with the flood of U.S government-subsidized corn and other crops.

"You had a lot of U.S. (agriculture) exports in key areas where Mexico had been self-sufficient," said Harley Shaiken, a University of California-Berkeley professor. Many subsistence farmers gave up long before the last import tariffs were phased out in 2008.

Fears of similarly going out of business and being forced off the land haunt Colombians including Jaramillo and her husband, who get about $1.60 a gallon for their milk and only yield about 12 gallons (45 liters) a day.

Colombia produces 4.5 billion gallons (17 billion liters) of milk a day and only exports about 2.5 percent of that. Its 400,000 dairy farmers fear milk byproducts such as whey will enter the country with zero tariff protection and end up driving down prices, said Jorge Uribe, president of the National Association of Milk Producers, or ANALAC.

Jaramillo and her husband say they couldn't survive if milk were to drop below about 85 cents per gallon. PD

—AP newswire report