The Canadian government will find itself on the hook for more farm income support and pressure from farmers for help if it is unable to preserve farm product marketing boards during the next few years of World Trade Organization negotiations, some farm leaders warned last week.
On Aug. 1 in Geneva, Canada accepted a WTO negotiating framework that will make the Canadian Wheat Board and supply management tariff protections negotiable at coming talks. It also promises an end to export subsidies and a reduction in trade and production distorting policies.
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WTO observers say the framework agreement sets the groundwork for further negotiations that could produce a final agreement by 2006 to be implemented over several years after that.
It could be a decade or more before results of the negotiations are fully implemented.
“It’s a long way down the road but if any of the tools that make farms more profitable are taken away, it follows that there will be more farm income vulnerability and therefore more call on the government for back-up,” Canadian Federation of Agriculture vice-president Marvin Shauf said in an Aug. 9 interview from his Saskatchewan grain farm.
Dairy Farmers of Canada president Jacques Laforge, a New Brunswick producer, took the same view.
“I wouldn’t use the world ‘compensation’ but if we moved toward a world price system, then the government would have to realize that an average Canadian dairy farm moved to Europe would be eligible for 60,000 euros each year without any connection to production,” he said.
“That is what we’d be competing against and the government would have to recognize that.”
However, supply management defenders said last week they are optimistic Canada will be able to protect the system from over-quota tariff cuts during the next several years of bargaining. A requirement that over-quota tariffs be cut was removed from the text at the last moment.
Promoters of greater trade liberalization, represented by the Canadian Agri-Food Trade Alliance, said Canada must support cuts in all tariffs if it is to be part of an agreement that offers progress through an end to trade-distorting policies.
“The agreement last week narrows down the topics that are on the table to negotiate and overall, the results would be good for agriculture,” CAFTA president Liam McCreery, an Ontario soybean producer, said in an interview.
He said there is no doubt all tariffs, including over-quota tariffs that protect supply management, will have to be lowered if WTO members agree.
Meanwhile, ministers involved in the negotiation insisted the government will continue to fight to protect Canadian marketing boards while negotiating greater access to world markets.
“We will not compromise Canada’s trade interests,” agriculture minister Andy Mitchell said in an Aug. 3 statement. “Canada will abide by new trade rules only when it is clear that there is movement by our trading partners.”
Larry Martin, chief executive officer of the Guelph, Ont.-based George Morris Centre, said the overall direction of the negotiations would be good for Canadian agriculture, lowering tariffs and subsidies, raising prices and increasing markets for Canadian value-added products.
However, he said there will be losers.Supply management over-quota tariffs will have to be cut, based on the framework agreement.
“I simply don’t see a chance that we will get through the negotiation without seeing supply management tariffs cut,” he said.
And Canada’s agreement to negotiate an end to CWB sales guarantees and monopoly will end the board as now structured.
