When China imposed its blackleg restrictions on canola imports 16 months ago, there was immediate concern that Canada had lost its top canola seed customer for years to come.
Turns out that is not the case. In fact, statistics released by the Canola Council of Canada last week in its 2010 annual report show China was the top buyer of seed last year, importing a whopping 2.25 million tonnes.
It’s a similar story for other recent market access issues – trade often resumes with a country shortly after it erects what initially appears to be a market-destroying non-tariff barrier.
Read Also
Spider mites big soybean problem this season
Spider mite issues have been geographically limited but significant where they occur, said John Gavloski, an entomologist with Manitoba Agriculture.
Some farm leaders were convinced the discovery of CDC Triffid in Canadian flax supplies in September 2009 would bring down the industry or at a bare minimum wipe out all sales to Europe.
But guess who Canada’s largest flax customer was in the 2009-10 marketing year? Europe bought slightly more than China.
Pulse Canada recently announced that China has removed its maximum limit for selenium, a market access barrier that shut down trade for a few months when it was introduced in 2006.
A temporary workaround allowed Canadian peas to continue flowing into that market for the last five years. In 2010, China purchased 586,000 tonnes of peas worth $172 million making it Canada’s third largest pulse market.
There are other examples of commodity groups overcoming serious threats to their crops. India remained Canada’s top pulse customer despite the stem and bulb nematode fumigation issue and canaryseed has made its way to Mexico in the face of weed seed challenges.
It raises the question – do com- modity groups over-react when market access issues first arise?
“Trust me, we don’t because when a market shuts, you have no idea if it’s going to open up again,” said JoAnne Buth, president of the Canola Council of Canada.
When China issued its blackleg quarantine order on Nov. 15, 2009, the canola industry had no clue whether it would regain access to a market that in the 2008-09 crop year had purchased more seed than any other customer in the history of the crop.
“We went into emergency response mode,” said Buth.
The situation remains unsettled. A temporary agreement allowing exporters to ship product to five Chinese crushers applies only to the 2010 crop. Canada is negotiating with the Chinese for another extension for the 2011 crop but nothing is certain.
The blackleg restriction was a threat when it happened and remains one today.
“We’re not crying wolf,” said Buth. Carl Potts, director of market development with Pulse Canada, said in a lot of instances, trade comes to a grinding halt, at least initially.
“We can’t afford to lose access to our most important markets for any extended period of time,” he said.
Many market access barriers are technical compliance issues, not bona fide food or environmental safety issues. Labs are able to detect various substances down to minute levels, triggering some long-forgotten safety standards that have been on the books for decades.
Importing countries are often as eager to resolve the issue as the exporting countries because they need the food.
“That’s why you tend to see these temporary or interim policy measures as the work goes on in the background to find a more permanent solution,” said Potts.
But the workarounds are far from ideal. They add costs to the system, change trade patterns and restrict sales.
Unfortunately, non-tariff trade barriers have become far more commonplace in recent years and that trend is expected to continue.
“Product is moving everywhere in the world now and there is more concern about the transfer of pests,” said Buth.
In addition to market access problems with pesticides, diseases and unapproved genetically modified crops, she thinks unwanted weed seeds, soil contamination and sustainability issues are going to become far more prevalent barriers to trade.
Buth said the council and other farm groups are starting to explore how some of these issues can be addressed through agreements like the International Plant Protection Convention.
Market access issues will also be on the agenda of the Grains Roundtable, a new group that brings Canadian grain industry leaders together with provincial and federal government officials to devise ways to increase profitability in the grain sector.
