SASKATOON — High subsidies paid to American barley growers will keep border controls on U.S. imports in place this year.
And the gap between Canadian and U.S. subsidies is so great that it’s likely the border will remain closed in 1995 as well.
During the latest two-year period under review, U.S. barley growers received government payments equal to 50.3 percent of the value of their crop.
By contrast, support payments to Canadian barley growers worked out to be 22.6 percent of the value of their crop.
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Under the Canada-U.S. free trade deal, as long as U.S. subsidies are higher, import licences will continue to be required for barley or barley shipped north of the border.
In announcing the results of the subsidy calculation, agriculture minister Ralph Goodale emphasized the figures were agreed to by both countries.
He said import controls will remain in place because the U.S. subsidies “create significant distortions in both the international and North American markets.”
EEP over half of subsidies
The main reason for the high level of support in the U.S. was the Export Enhancement Program. Payments under EEP during 1991 and 1992 totalled $675 million, representing about 56 percent of total government support of $1.21 billion.
Other significant payments to U.S. producers included $326 million in deficiency payments, $136 million under the conservation reserve program and $37 million in government services like grain inspection, research, irrigation and marketing services.
The review determined that Canadian barley growers received $472 million in government subsidies during the two crop years ending July 31, 1993.
The biggest item was $295 million under the Gross Revenue Insurance Program, with other payments including $139 million under the Western Grain Transportation Act, $30 million in crop insurance and $40 million in stabilization.
Because the calculation averages support over the previous two years, next year’s review is likely to produce a similar result. In the most recent year, U.S. subsidies were 46 percent of total income (calendar year 1992) compared with 22 percent in Canada (crop year 1992-93). The only way the border would be opened next year would be if those numbers were reversed in the succeeding years.
A similar calculation led to border controls being lifted from oats in 1989 and wheat in 1991. The previous Conservative government unilaterally removed barley import licenses as part of the short-lived continental market last year, but the Liberals reversed the decision.
