It’s in Japan’s interest to support Canada’s position on reforming world grain trading rules, the head of the Canadian Wheat Board told a Japanese business audience last week.
At stake is not just Canada’s ability to compete in world grain markets, he said, but security of food supply for Japan.
Greg Arason, the board’s president and chief executive officer, told the Canada-Japan Business conference in Tokyo that grain export and production subsidies could undermine Japan’s food security by driving grain producers out of business.
“Canada and the Cairns group need Japan’s support to eliminate, or at least reduce, the massive subsidization of agriculture in the European Union and the U.S.,” Arason said in a May 16 speech.
Read Also
Increasing farmland prices blamed on investors
a major tax and financial services firm says investors are driving up the value of farmland, preventing young farmers from entering the business. Robert Andjelic said that is bullshit.
Those subsidies distort market signals and production patterns, he said, and over the long run are detrimental to the security of supply objectives that Japan desires.
Farmers in Western Canada live on the prices they get from the market, and if those prices continue to be depressed by EU and American subsidies, they may be discouraged from growing the wheat and barley that Japan regularly buys from the board.
“As far as security of supply is concerned, buying consistently from Canada ensures continuing supplies being available for the Japanese market,” he said. “And I believe that the people in this room today understand that market access, lower subsidies and security of a safe supply of food be based on sound market fundamentals.”
In an interview later, Arason said his message seemed to be well-received by the Japanese officials in attendance, adding he expects Japan to be an ally in Canada’s efforts to protect the role of so-called state trading enterprises like the CWB during World Trade Organization talks.
He said that following his speech, the head of the Japanese flour millers association rose to tell the meeting that the wheat board does a better job than any other grain exporting agency or company in meeting the millers’ quality needs.
“Basically he gave us a pat on the back, and I was willing to accept that,” Arason said with a laugh.
In his speech, the wheat board CEO made no apologies for the agency’s status as a state trading enterprise with single desk marketing powers, saying Canada’s grain marketing system has been structured to meet the needs of farmers and operates within existing trade rules.
“We say ‘judge us on what we do and how we act, not on a label like a state trading enterprise.’ “
He said there was a general feeling among those from both countries that Canada and Japan should pursue a bilateral free trade agreement outside of the WTO process. Such a move could have significant benefits for Canadian agricultural exporters, particularly oilseed processors, who have been shut out of the Japanese market by steep tariffs.
