Trump exploits myths around supply management

At the meeting of G7 nations last weekend, U.S. President Donald Trump used bully tactics to get Trump-favorable language in a joint message designed to play well at his core supporters back home. The member nations all reached agreement on the document, but in the end Trump didn’t sign.

He launched a written attack on Canada, its prime minister and its agriculture.

In Canada, those who maintain an active dislike for Justin Trudeau might not find offence in Trump’s statements, but they should. He wasn’t taking a swipe at just the PM, it was at America’s closest ally.

The president was counting on the fact that supply management is a complex concept. Primary production agriculture is easy to target because it directly involves less than one percent of the population.

The imposition of American tariffs on Canadian steel and aluminum a few weeks ago was carried out under Cold War legislation in the name of national security.

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It is odd to claim that Canada is a military threat, when in reality the U.S. is imposing tariffs to apply pressure for conciliations in the North American Free Trade Agreement talks. But even more strange were Trump’s Twitter statements from Air Force One on June 9 as he departed the G7 conference that blamed Canadian agriculture and supply-managed dairy as the reason for the U.S. steel and aluminum tariffs. After all, that wouldn’t be allowed under American law or World Trade Organization rules.

At the same time, he called for a general end to tariffs and subsidies. But he didn’t mean American ones. Those include the 300 percent charged on Canadian tobacco, massive dairy supports, irrigation and transportation infrastructure investments and billions of dollars paid directly and indirectly to American farmers.

These and other forms of assistance throughout the U.S. agriculture industry make trade in agriculture with the U.S. deeply damaging for producers from other countries. The U.S. also could have attained access to the Canadian dairy market through the Trans-Pacific Partnership agreement but Trump rejected that. Besides, Canada already allows 10 percent of U.S. dairy imports duty free, the U.S. just three.

The president was right about American dairy producers’ failures of the past 15 years. But it’s not Canada’s fault, as he claimed.

It is because of overproduction in a deregulated system, even though U.S. producers receive up to two-thirds of every dollar they get for their products from American taxpayers and their reliance on an army of low-cost labour.

Canadian dairy farmers receive no support from the government and instead consumers and food processors bear a relatively small burden of steady, farm-sustainable prices paid for dairy products. In exchange for this, producers in Canada face giant export tariffs, designed to keep the vast majority of dairy at home. Canadian dairy farmers received about the same margins as grain producers, according to the last two federal agricultural censuses.

Canadian prices —when comparing actual grocery store milk, butter and cheese of like kinds and qualities, and taking into account currency exchange — are about 10 percent higher in large markets and often at par or lower in rural areas. American dairy farmers now receive 40 percent less for their products than Canadian ones.

Trump leveraged the myths surrounding supply management to his own ends. Canadians need to stop handing foreign governments such opportunities.

At the same time within Canada, we should close the door on those who have no skin in the farm game and are using agriculture in the same way Trump is, to further their own political and ideological agendas.

Karen Briere, Bruce Dyck, Barb Glen, Brian MacLeod and Michael Raine collaborate in the writing of Western Producer editorials.

Comments

  • Alberto13646

    ” In Canada, those who maintain an active dislike for Justin Trudeau might not find offence in Trump’s statements, but they should…” I trust the Editorial Board and their whiney cartoonist, were looking in the mirror when they penned that.

    And what kind of side shot finger wagging is this ” Canadians need to stop handing foreign governments such opportunities…” You really oughta wanna not do what?

  • Monkeeworks

    President Trump certainly learned how to become a politician in a hurry.

  • neil

    Great article explaining the US system of dairy subsidies and why their milk prices are so low at this time. I am a grain farmer who supports supply management as a cost effective solution for perishable food like dairy. I read lots of comments on here that are very negativel to supply management. I realize it is too social of a program for many right of centre entrepreneurs but I wish more of them would stop and learn more about the program before trashing it.

  • PortageMain

    The Producer’s editorial board should broaden their sources of information a bit. Trump did not say Canada posed a national security threat, He said imports of steel and aluminium imports threaten to impair national security because they threaten the US steel industry. Not quite as fun, I know.

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