Farmers have railed against American and European grain subsidies for years, portraying them as bogeymen that ravage their returns.
But two agricultural economists told a life-after-the-Crow conference that those fearful subsidies have been tamed.
And they said farmers are now threatened by new monsters that could do much more damage.
“How do you call them the bogeyman when they are doing what we are doing,” said University of Manitoba agricultural economist James Rude about farmers in Brazil and Argentina.
Rude and University of California economist Colin Carter told the University of Manitoba conference that American and European subsidies for wheat have fallen since 1996 and, in general, their subsidy systems are not the cause of the stagnation of the world wheat market or the weakness in commodity markets.
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Carter said U.S. grain subsidies have caused American farmers to switch from wheat to crops like soybeans, so “if anything, U.S. farm policy has probably helped western Canadian farmers.”
Rude said commodity prices have been weak since the 1996 ending of the Crow Benefit due to poor world demand and the entrance of new competitors, such as the South Americans.
“On the surface subsidies in the EU and U.S. are mattering less. It’s really the additional area that has come in,” said Rude.
“We shouldn’t be fixated on two markets with two policies when the rest of the world decides what is bought and increasingly what is produced.”
Carter said Brazilian farmers should soon be able to boost their productivity because they have just embraced glyphosate-tolerant soybeans, so they will soon be practising zero-till farming.
China may also massively increase rice production in its 77 million acre growing area if a number of genetically modified varieties are released. He said the countries of the former Soviet Union also have huge and proven potential.
Kazakhstan, for example, has abandoned 20 million acres of wheat in recent years. If those were put back into production, and productivity was increased, Kazakhstan could become a major low-cost competitor.
Rude did not share Carter’s views on the potential of the former Soviet area, seeing many large problems bedeviling its ability to develop.
But he said farmers need to understand that the world grains market is going to get more competitive, and blaming U.S. and EU subsidies may distract farmers from that reality.
