An Ottawa-based trade consultant and agricultural analyst argued last week that Canadian agriculture policy planners must become more creative if Canadian farmers and family farm-based agriculture are to survive.
Peter Clark, a former finance and trade bureaucrat who has represented agricultural interests as diverse as protectionist dairy and free-trade hogs in trade disputes, said in an April 11 speech that traditional farm policy design no longer works.
Farmers are in crisis with record low incomes while the Canadian government and some farm groups continue to look at stalled World Trade Organization negotiations as an answer and refuse to consider adopting an American-style support program.
Read Also
Agriculture ministers agree to AgriStability changes
federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
“I just think the government has to do a zero-base review, start from scratch with both design and concept.”
As a close follower of WTO talks for a number of clients, Clark said the multilateral trade system offers few answers to the income crisis.
“The WTO is a dead horse,” he told the meeting. “Let’s stop beating it.”
He said Canada should consider following the American path of supplementing attempts to get a WTO deal with an aggressive strategy to win market access through bilateral one-on-one trade deals. He offered some examples, including Prince Edward Island french fries exporters who are losing market share in some Central American markets because the Americans are cutting deals that give them preferential access.
Clark said Canada should quit considering the U.S. farm subsidy system as simply a massive transfer of wealth to farmers that Canada cannot match.
“I don’t think we can afford not to.”
The key is changing the way government and society view supports.
In the U.S., the goal is to allow farmers to market cheap grain as the fuel and raw product for a profitable value-added industry, knowing the government will sustain farm income when the market price will not. It is part of the American industrial value-added strategy of supporting livestock, packing plants, biofuels and processing jobs with a cheap raw product that make industries more competitive.
In Canada, governments continue to consider farm supports as welfare payments meant to prop up farmers until prices turn around.
Clark said the corn countervail is an example of bad policy created because Canada does not support its farmers as the Americans do.
“The countervail was a cry for help,” he said.
The result is a countervail duty that raises the price of corn, increases costs to hog and livestock feeders and encourages them to ship young animals south to be fed. This undermines Canada’s effort to become more self-sufficient in meat packing to avoid the vulnerability to foreign packers that was clear after BSE struck in 2003.
