Food exports may be Canada’s greatest strength: analyst

Canada has a chance to regain some lost ground in world markets as COVID-19 causes competitors to become unreliable suppliers.

But gaining that opportunity will require committed effort from governments, says a Canadian agricultural think-tank.

“We can be the supplier for countries that are structurally food-deficit,” Al Mussell, lead analyst at Agri Food Economic Systems of Guelph, said in an interview.

“If we can continue to be a trusted supplier when some of these other guys are folding their tent up, then that becomes the replacement for the rules-based trade (Canada formerly relied upon.)”

Canada exports substantially more food than it imports. That means it and other countries with similar exporting capabilities can export agricultural products without fear of hunger at home during the COVID-19 crisis.

“Only Argentina, Australia, Brazil, Canada, Kazakhstan, Paraguay, Thailand and Ukraine exceeded 30 percent net exports in excess of their own production in 2017,” write Mussell, Ted Bilyea and Douglas Hedley in their analysis paper, The New Trade Economy of Food Security: Repositioning Canada.

So far, a number of traditional exporters have restricted or blocked agricultural exports, including Kazakhstan and Russia. That’s a worrisome development for countries with major food production deficits, such as Japan, South Korea and the United Kingdom.

China relies upon massive amounts of foreign food to feed its enormous population.

Other places import significant amounts of basic foods and would face problems if those became scarce, the analysts write.

Canada, however, despite spotty shortages of various foods due to sporadic production problems and demand anomalies, produces far more food than Canadians need.

Some other traditional exporters could also become risky prospects in the present environment. United States President Donald Trump has been willing to shut down exports of various goods, as with respirators and protective medical gear. Will importers trust him to not shut down food exports if U.S. production falls due to labour or processing problems?

If Canada can step up and not just supply importers’ needs, but also provide reliability to buyers, it can counteract some of the damage done by the protectionist and power-abusing players.

“In a world in which some countries are inclined to hoard, the capacity and willingness of a country to supply others beyond its own needs, on a reliable basis, is highly valuable, and constitutes a form of soft power, especially with countries in agri-food deficit positions.”

In recent years Canada has seen its position in the world market dramatically weakened by the behaviour of countries like the U.S., China, and India, which have ignored world trading rules that have governed the past few decades.

Protectionism has left Canada, with its small population, unable to effectively push back. Food politics used as a weapon, as in the case of China with Canadian canola, have taken a toll on Canadian farmers’ returns.

But if Canada can continue to export during these times of food security fears, it could gain something back.

However, Canadian governments need to assist.

“Grasping and maintaining this opportunity will rely urgently on governments and industry to collectively seek out and agree on the myriad steps to implement domestic actions and to re-engineer food trade exports with willing partners abroad,” write the analysts.

“Without this, Canada will remain within the clutches of the big powers as they redesign trade policies to their own benefit, to the exclusion of small- and medium-sized countries.”

Specifically, Canadian governments need to ensure:

  • Labour is available.
  • Essential inputs remain available.
  • Connections between elements of various supply-and-export chains are protected.

Canada has been badly affected by the failing of the “rules-based international trading order,” but the COVID-19 situation is allowing Canada a chance to show its value to overseas buyers. That chance can’t be squandered.

“That may be our only choice,” said Mussell.

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