VANCOUVER — Current farm safety nets will have to be enough if an escalating trade war hurts farmers financially, say Canada’s agriculture ministers.
They did not discuss any ad hoc support during their annual meeting last week, in the event that tariffs and retaliatory tariffs harm the sector.
Federal minister Lawrence MacAulay said the Canadian Agricultural Partnership is in place.
“If there are problems, I’m not going to speculate on what problems there might be, the agricultural sector in general is doing quite well,” he told reporters at the wrap-up news conference. “There is a system in place to make sure if we hit any major problems that we’re able to deal with it.”
But the Canadian Federation of Agriculture and other industry leaders, in a roundtable discussion ahead of the ministerial meeting, told ministers they need to look at a contingency plan.
“We don’t know what’s going to happen right now,” said CFA president Ron Bonnett. “There’s going to have to be a number of what-if scenarios unrolled and take a look at what is necessary to make sure that we get through this.”
He said depending on what happens, particularly between the United States and China, there will be a direct impact on prices, especially grains and oilseeds, which are based on Chicago prices. If they drop, they will drag down Canadian prices with them, Bonnett said.
There is also concern that AgriStability, which is meant to cover income shortfalls, won’t provide enough.
Saskatchewan’s deputy agriculture minister, Rick Burton, said it works as a disaster program.
“I think we’ve heard that industry does find that it is effective in a disaster and if the border closes that’s what we’re going to see,” he said. “It’s not really effective at stabilizing incomes.”
U.S. Agriculture Secretary Sonny Perdue has promised farmers in that country that they can expect to be supported through a coming trade war with China.
Still, MacAulay insisted Perdue is an open trader.
“We do not want tariffs,” MacAulay said. “All they do is hurt the farmer and industry in general. We feel that tariffs are a detriment to the economy of our country and a detriment to trade.”
B.C. Agriculture Minister Lana Popham said she is taking the message that Canadian agriculture ministers are united on this point to a conference in Spokane, Washington, this week.
“We stand as one voice in a situation like this,” she said.
Canada’s chief agriculture negotiator, Frederic Seppey, who updated the ministers on various trade files, said there is no evidence that the U.S. will dump products into Canada as a result of retaliatory tariffs from other countries.
“It’s difficult to assess that but definitely we are monitoring closely the evolution of imports. We don’t see anything out of the (ordinary) now; it’s very early,” he said.
He said global uncertainty and rise of protectionism is on everyone’s mind and there is a willingness to work together on trade issues.
“There’s a recognition that whatever we can do to provide greater predictability in North America — NAFTA is the centrepiece of our trade policy — so whatever we can do to provide greater predictability we should do it,” he told reporters.
Trade diversification through other agreements in areas like Asia and Europe are critical, he said, in the event there are problems with the U.S. market.
Last week, Singapore became the third country to ratify the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP); six of the 11 must ratify for it to come into force. Canada wants to be among those first six and new international trade minister Jim Carr said last week the country is on track to do that.
The Liberal government turned down a Conservative request last week to recall Parliament to ratify it as soon as possible. MacAulay would say only that it would be done soon.
Meanwhile, Seppey said threats from Italy that it won’t sign the Comprehensive Economic and Trade Agreement between the European Union and Canada shouldn’t hold up the deal. Canadian durum exports to Italy have been stalled since Italy imposed a country-of-origin labelling requirement.
“We know that the issues of importance to the agricultural sector are not in the direct jurisdiction of member states,” he said. “They are in the jurisdiction of the European Union and in that context, it’s currently being provisionally applied.
“As long as it’s being provisionally applied we enjoy the benefits.”