Nobody has to tell Steve Snider, Kevin Boon or Keith Stolhandske that trade is important to their business. Like most prairie farmers, it is their lifeline.
“I’m very dependent on trade,” said Boon, a Delia, Alta., cow-calf producer.
“I’d say if not for trade, I’d have to cut my operation by a third.”
On his grain and special crops farm south of Swift Current, Sask., Stolhandske includes oilseeds, cereals, legumes and special crops in his rotation.
“Virtually all of it is exported.”
Read Also
Stock dogs show off herding skills at Ag in Motion
Stock dogs draw a crowd at Ag in Motion. Border collies and other herding breeds are well known for the work they do on the farm.
Snider grows organic grain, vegetables and pulse crops on his 2,000 acre farm at New Norway, Alta.
“If I didn’t have export access, we would do all right but it would be dicier and we would be smaller.”
All three are at the centre of what has been an explosion in the value of Canadian food exports during the decade since the Canada-United States free trade deal took effect. Prodded and encouraged by government, and motivated by ever-escalating trade targets, the value of food exports has soared by more than 100 percent in a decade to the $22 billion range.
Increasingly, higher-priced value-added products are part of the export mix.
That success has led to an even more ambitious goal of reaching four percent of world trade, approximately $40 billion, in the next five years.
The federal government has made increased trade a core element of its agricultural policy, as agriculture minister Lyle Vanclief noted at a Montreal conference on globalization this summer.
“Increasing two-way trade and investment is a vital component of our agriculture and food sector’s strategy for expansion,” he said.
“It is also a key component of our agriculture and food sector’s strategy for expansion.”
This leads critics such as Shannon Storey, women’s president of the National Farmers Union, to argue that the government has a trade policy rather than an agriculture policy.
“As such, I don’t think it is necessarily in Canadian farmers’ interests,” she said.
“The traders and the corporations make more from it than the farmer does.”
For apostles of trade, this is akin to heresy.
“What would have happened to agriculture if trade had not increased so dramatically?” asked University of Saskatchewan agricultural economist James Rude, who co-authored a study for Agriculture Canada this year that concluded that each $1 billion in increased trade can return at least $250 million to farmers.
“The farm sector would be much smaller and farm incomes much lower.”
At the Canadian Cattlemen’s Association in Calgary, general manager Dennis Laycraft offers supporting evidence.
“Without that trade, our sector would be considerably smaller and with surplus product in the domestic market, prices considerably weaker,” he said.
“Instead, the number of cattle producers has increased in the past decade and that is one of the few agriculture sectors where that has happened.”
Rory McAlpine, executive director of Agriculture Canada’s international trade policy directorate, argued that “without the vast increase in exports, we would not have the robust industry we have.”
Still, behind Storey’s complaint is the reality of a growing gap between trade growth and farm income. While the value of food trade increased 140 percent from 1989 to 1998, net cash farm income increased just five percent.
In many of those years, hundreds of millions of dollars of taxpayer money were used to keep farmers afloat, even as trade revenues soared.
Farmers, it seems, have not been able to trade themselves into prosperity. Instead, trade has to increase simply to keep the sector where it was, with government support kicking in when market revenues are inadequate.
“Few of those increased dollars seem to make it back to the farm,” Stolhandske said in an interview during a break from harvest on his 4,500 acre farm.
“The food industry is making money. Farmers are not.”
Trade advocates have explanations.
In many sectors, world commodity prices are low, distorted by subsidies and supply-demand factors. Besides, much of the recent increase in trade values comes from processed food that has added value but does not necessarily pay any more back to the farm.
This leads Saskatchewan trade promoter Gerry Adamson, vice-president of the Saskatchewan Trade and Export Partnership, to suggest that increasing trade is not really a farm policy. It is an industrial policy.
“As trade increases, particularly in processed products, you see more jobs created through value added,” he said in an interview at his Regina office.
“But it might not have a significant impact back on the life of the farmer.”
He argued that farmers will only benefit from increased trade if they become involved in the value-added side of the business.
“Producing and selling commodities into world markets is not a formula for increased income. Value adding is where the money is.”
On his Alberta farm, Snider puts the theory into practice. For 15 years, he has been an organic producer. His products fetch a premium in both domestic, American and offshore markets.
“You have to find a way to add a premium or greater value to your product,” he said.
But he also conceded not all farmers can find a niche or move up the value-added chain.
“I see guys all around me getting swamped because the export market doesn’t give them a living return,” he said.
“It’s sad. Until prices become more realistic, increasing trade doesn’t mean better-off farmers. Sometimes, though, that seems to be our only policy.”
