Mike Coates remains puzzled by the Ontario Corn Producers’ Association,
which is adamant that it will not support efforts to get a national
countervailing duty on imports of American corn.
Coates, president of the Manitoba Corn Growers Association, said the
decision may appease Ontario corn processors who use the crop for
ethanol production, but he can’t see how it benefits growers in that
province.
“I think maybe they should be calling themselves the Ontario corn
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processors association,” said Coates. “That’s who they’re protecting
right now.”
He believes American corn is being sold into Canada at below cost of
production and that is harming prices for corn grown in Manitoba.
That belief prompted his association to launch a trade action more than
a year ago that resulted in an interim levy imposed on imports of
United States corn to Western Canada.
But last March, the Canadian International Trade Tribunal ruled that
U.S. corn imports have not caused injury to “all or almost all” corn
producers in Western Canada.
The tribunal’s decision triggered the removal of the tariff, which had
stalled imports of U.S. corn last winter.
The Manitoba association had the option of appealing the tribunal’s
ruling but chose not to. Instead, it was considering whether to launch
a new trade complaint.
Coates said the new trade action would have needed the support of the
Ontario Corn Producers’ Association. Without that support, it’s
unlikely any further action can be taken.
“It kills our case,” Coates said.
Dennis Jack, president of the Ontario Corn Producers’ Association, said
industrial users of corn offer an important market for growers in his
province.
There’s opportunity to expand industries such as ethanol production,
said Jack, but the companies behind such ventures want access to
American corn as added assurance of supply.
“If we put a countervail in place, it sends the wrong message.”
Jack said he appreciates the views of Coates. However, his association
did not want to leave a false hope that it would back a national duty
if Manitoba Corn Growers decided to press forward with trade action.
“The right thing to do was to state our position up front,” Jack said.
“It was not a happy group that voted to oppose Manitoba.”
At the same time, he has not entirely ruled out the possibility that
his association will revisit the issue.
“What we stated was at this time we will not support a national
countervailing duty. I didn’t say never.”
The interim tariff lifted last March had added $1.58 US per bushel to
the price of U.S. corn.
Among those who opposed the trade action against American corn were
distillers, livestock groups and feed companies in Western Canada.
Almost 40 corn producers also provided statements to the Canadian
tribunal opposing the trade complaint. Among them was Roger Barnabé, a
corn grower and importer from Letellier, Man.
Barnabé had vowed that if Manitoba Corn Growers launched a new trade
complaint, he would oppose the action.
He believes a permanent tariff on U.S. corn imports would create the
threat of American retaliation against Canadian farm commodities.
Pushing corn prices up with a tariff also puts markets for the crop at
risk, since buyers look for alternative feed sources such as barley and
wheat, he said.
“When you fight the U.S., you’re fighting a giant.
“The only guys who get rich are the lawyers, and they don’t need any
more money.”
Barnabé said the corn growers association should focus on things like
an ethanol plant, which could add value to the crop.
Corn prices in Western Canada rose considerably in November 2000 after
the interim tariff was imposed. But views vary on how much of the
increase was due to the tariff and how much from other forces.
Dennis Jackson, an Agriculture Canada coarse grains market analyst,
said it was unclear what effect the interim tariff had on corn prices.
While the tariff may have moved prices up late last year, there were
other events, such as a reduction in the estimated size of the U.S.
corn crop, which were also at play.
The drought in Alberta last year pushed up demand for barley, which
might also have influenced prices for corn in Western Canada.
However, Jackson said there is no doubt that imports of U.S. corn
nose-dived while the duty was in effect.
