Canadian farm groups are unhappy with the American grain subsidies, but aren’t asking for a similar program at home
Canadian farm organizations are not pleased that their U.S. counterparts are receiving billions of dollars in subsidies, but they’re not doing much about it either.
The U.S. Department of Agriculture announced Dec. 17 that it will be doling out another US$4.9 billion in direct payments to grain farmers.
“It’s not unexpected. We knew this was happening, but it still does impact the international markets,” said Jeff Nielsen, chair of Grain Growers of Canada.
“It’s a direct subsidy, and that’s something we can’t compete with.”
The subsidy is designed to mitigate losses that U.S. grain farmers have incurred as a result of a tariff war between the United States and China.
This is the second round of direct payments to U.S. farmers. The first round was for $4.7 billion.
Combined, that is a $9.6 billion government injection into the farm sector. Soybean growers received $7.3 billion, or 76 percent, of the subsidies because they were the group most affected by the loss of the Chinese market. The payment amounted to $1.65 per bushel.
Nielsen said the trade war has had casualties beyond the U.S. border.
“It definitely pulled down soybean prices in Eastern Canada and southern Manitoba, and naturally since canola follows the soybean price, it has affected canola for the rest of us here,” he said.
“We don’t get any compensation. We have to rely on the programs we have.”
Nielsen said his group has let the federal government know it is not impressed with the U.S. subsidies, but it hasn’t asked for similar assistance.
“We can’t get in the direct per dollar battle,” he said.
Canadian farmers weren’t the only ones disappointed by the U.S. Department of Agriculture’s Market Facilitation Program.
The National Corn Growers Association said corn growers received one cent per bushel despite suffering an average loss of 44 cents per bu.
“One cent per bu. is woefully inadequate to even begin to cover the losses being felt by corn farmers,” NCGA president Lynn Chrisp said in a news release.
“USDA did not take into account the reality that many of our farmers are facing.”
The National Association of Wheat Growers said no U.S. wheat has been sold to China since March.
That amounts to an estimated loss of $323 million for wheat growers. Another $178 million disappeared when Mexico decided to source wheat from alternative markets. Wheat growers will receive $238,400 from the USDA.
“These retaliatory tariffs are not only harming growers through loss of sales but are also placing pressure on wheat prices,” NAWG president Jimmie Musick said in a news release.
“Growers want new export markets and trade deals so that this sort of assistance isn’t necessary.”