Market access loss may force risk management overhaul

I heard two things recently that made me think Canada’s farm risk management programs have a gaping hole.

“It’s like we’re continually targeted. How do we deal with this?” Bill Campbell, president of Keystone Agricultural Producers, said to me during the Manitoba Protein Summit.

“As a primary producer, am I going to be taking risk to be venturing into a new enterprise?”

A day later, Hams Marketing’s director of risk management, Tyler Fulton, apologized for always hedging his comments these days about the hog market outlook because of unforeseeable trade issues.

“We’re just in a new time, I guess,” Fulton said.

Maybe we are. Farmers and everyone in western Canadian agriculture are hoping that this recent batch of trade problems goes away. From China’s assault on Canadian crops and meat, to U.S. President Donald Trump administration’s threats against the North American Free Trade Agreement, to Italy’s games with Canadian durum, to the European Union’s failure to open its markets following the Canada-EU deal, and India’s barriers to pulse imports, export access seems more imperilled than ever.

Most hope that sanity prevails, the comfortable “rules-based international trading order” returns and farmers can get back to worrying about supply-and-demand fundamentals and less about Xi Jinping and Donald J. Trump.

But what if this is the beginning of a new age, in which market access is never dependable? Are farmers equipped for that? Is our federal government prepared? Have we built a risk management system that can handle it?

I doubt it, and the farmers I’ve spoken with doubt it too. We have a system based on assumptions that might no longer apply.

I’ve covered the China-Canada issue since it broke and the sense I have got from federal government officials and politicians in their words, actions and announcements is that they have been desperately hoping things can return to “normal.”

After all, the biggest move the feds have made has been to increase and extend loans to farmers.

That’s a reasonable kicking-the-can-down-the-road approach for a temporary situation, but that time is over.

“After six, eight months, we’d like to see some sort of positive news,” Campbell said to me.

A few moments later, another farm leader laughed about the cash advance expansion.

“They gave us a loan?”

Meanwhile, other players, like the United States have been more aggressive in helping their farmers.

What’s the best way to protect Canadian farmers for the next 20 years?

I don’t know. I doubt anybody has a great idea of that right now.

But as the China dispute drags on, and other disputes raise the legitimate possibility that we are in a new time as far as international trade is concerned, it’s high time for Canada to rebuild its risk management safety net to include specific trade dispute damage.

Even if the urban public and political parties aren’t much interested in helping out farmers, they need to see the situation as not one of charity but national self-protection.

As Campbell noted, “I would be very cautious about exposing myself to international trade.”

Who’s going to reinvest in a farm or invest in a new export-oriented industry when geopolitical problems could wipe it out?

Without a national backstop to prevent farmers becoming deliberate or unfortunate victims of rule-breaking foreign actions, farmers will pay up front, but the national economy and public will pay the cost in the long run.

Taking agriculture for granted won’t be as comfortable if it stagnates, shrinks and starts paying a smaller part of Canada’s bills.

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