WINNIPEG – Oats growers aren’t worried about a grain subsidy war breaking out.
They’re worried about how to survive the war that’s already got them ducking for cover.
As much as 75,000 tonnes of heavily subsidized European oats are being shipped into the United States every month, cutting Canadian producers out of what had become a sizable and lucrative market for high quality oats.
And Leo Meyer is frustrated that no one seems to care.
“They make big a big fuss about a single shipment of 30,000 tonnes of barley,” said the Woking, Alta., farmer, referring to a shipment of EU barley to the U.S. that triggered trade retaliation from the Americans.
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But because the U.S. is an importer of oats, because processors there are happy to be getting the cheap Scandinavian oats and because it’s a Canadian problem, it just hasn’t become an issue.
The vice-president of the Oats Producers Association of Alberta tried to do something about that when he raised the issue during a meeting between prairie farm representatives and EU agriculture commissioner Franz Fischler.
“I think we made progress,” he said in an interview after the meeting. “At least people are aware of it.”
While Fischler gave no indication the EU would change its policy on oat subsidies, Meyer said that the EU chief at least knows Canadian producers are being hurt and are ready to take a stand.
“It has been raised at the highest possible level and at this point that’s all we can do,” he said, adding he hopes the Canadian government will take up the oats producers’ cause. “The only thing we can do on this one is negotiate with each other.”
In recent years Canada has steadily increased its sales of oats to the U.S., reaching 1.5 to 1.6 million tonnes annually. But now prairie farmers simply can’t compete with the Scandinavian oats, which are subsidized by 65 cents to $1.10 a bushel.
“How can I compete in such a scenario?” said Meyer. “I need $2 a bushel to make oats viable and the market wants to give me $1.50,” thanks to the EU subsidy.
He said the subsidy will cost Canadian farmers about 500,000 tonnes of potential sales.
Fischler told a Winnipeg press conference that the EU subsidizes oats to allow Sweden and Finland, which joined the union in 1995, to maintain their “traditional” level of oats exports.
He said the subsidy is designed to cover the gap between internal and world prices, and oats exports from those two countries are actually lower than they were before they joined the EU.
“Our only interest is to make oats exports possible,” he said.
When Sweden and Finland joined the EU their exports to the U.S. dropped because they were bound by EU rules.
Canada took advantage of that to increase its share of the market, but then, under pressure from its new members, the EU got back into oat subsidies to regain that lost market.
At the same time, Canadian producers had been holding back on deliveries in hopes of a price rally that never occurred, and American processors were happy to switch to cheaper imports from Scandinavia.
