Canada’s corn producers applied last week for duty protection from subsidized American corn imports and immediately faced a barrage of criticism from other agriculture and agri-business sectors that depend on cheap corn as a feedstock.
On Aug. 31, the Ontario Corn Producers’ Association said that on behalf of 21,000 producers in Manitoba, Ontario and Quebec, it was asking the Canadian Border Services Agency to impose anti-dumping and countervail duties against American corn imports that are sold into Canada at less than the cost of production.
If successful, the duties would be more than $1 per bushel.
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The OCPA also asked that Canada launch a World Trade Organization case against the international impact of United States farm bill subsidies and target corn imports as part of Canada’s promised retaliation against American trade laws deemed illegal by the WTO.
“This has been under consideration for a long time and over those years, the farm income situation has become desperate,” OCPA general manager Brian Doidge said in a Sept. 2 interview.
“The timing is right. We need relief.”
Other farm sectors said they sympathize with the corn sector’s complaints about the impact of farm subsidies but object to the idea of a border duty that would raise the cost of corn.
“It is obvious they are taking aim at the U.S. farm bill and we sympathize with that,” Canadian Cattlemen’s Association president Stan Eby said Sept. 1.
“But we are concerned because it would raise our costs. I have asked to meet with the corn producers to see if there are other options to help them that will not hurt us.”
Canadian Pork Council president Clare Schlegel from Tavistock, Ont., said in an interview that a corn duty that raised feed costs would cut significantly into hog producer profits.
“We believe there has to be a solution that does not help them at the expense of others,” he said Sept. 2. “A duty of the level they are suggesting would add $5 to $10 to the cost of producing a finished hog.”
The Canadian chicken industry also argued that an increase in corn prices because of an import duty would significantly cut into chicken profits, because corn is a key ingredient of feed and feed is 40 percent of costs.
“Obviously it would impact chicken producers,” said Mike Dungate, general manager of Chicken Farmers of Canada. “But we’re not in a position yet to take a position. We want to meet with the corn producers to hear their arguments and understand their case. We certainly understand the issue of competing against subsidized product. That is an issue across agriculture.”
The corn-based ethanol industry also would face increased costs if the corn producers won their plea for a duty.
The most strident reaction came from the Ontario Cattle Feeders’ Association, which argued a cattle sector struggling to regain profitability after BSE does not need higher costs.
President Doug Calhoun said in a Sept. 2 statement the corn growers’ petition for protection would not hurt the U.S. but would “cripple” sectors dependent on corn as a feed.
In Ottawa, an official speaking for trade minister Jim Peterson said the government will consider the application for WTO action, including adding corn imports to a list of products Canada could target in retaliation for a piece of U.S. trade policy declared illegal by the WTO but still used by the Americans.
“We are aware of the Canadian corn growers’ concerns about alleged U.S. grain corn subsidies,” said Jacquie LaRocque. “We are looking into it taking into account the merits and possible implications of a WTO case.”
Doidge at the corn growers’ office said he expects a favourable decision from the Canadian Border Services Agency and the imposition of at least temporary duties by the end of the year.
“We recognize that duties are a short-term Band-Aid but unfortunately, the long-term solution through the WTO is not in our hands but the government’s hands,” he said. “This is what we can do. We have waited a long time for other solutions.”
Corn producers have been one of the few groups to challenge the international impact of U.S. farm subsidies.
From 1986 to 1991, an anti-dumping duty was in place and briefly in 2000, Manitoba corn producers won duty protection before it was overturned.
