Saskatchewan pulse growers may follow the lead of Ontario corn growers by seeking anti-dumping countervailing duties on cheap American product.
“Growers are telling us they are fed up with truckload after truckload of low-priced U.S. peas and lentils coming into Saskatchewan this fall,” said Dean Corbett, chair of Saskatchewan Pulse Growers.
“They are telling us that this product is coming in at prices lower than our cost of production.”
The association has launched an investigation to see if there is any truth to that allegation. The inquiry comes on the heels of an announcement by the Canada Border Service Agency that, at the behest of the Ontario Corn Producers Association, it has launched a formal investigation into the alleged dumping of subsidized American corn.
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Scott Hepworth, a farmer from Assiniboia, Sask., is one of a number of pulse producers in south-central Saskatchewan who have lodged complaints with the grower association and local MPs.
Hepworth can’t find any bids for lentils in his area and few offers for peas, so his bins remain stuffed with good quality product.
“In the meantime we see all these American trucks flying down the highway and they are parked at our processors.”
Hepworth said he has witnessed lineups of U.S.-plated trucks five or six deep at local pulse processing plants and not a Canadian vehicle in sight.
Gerald Donkersgoed, general manager of Finora Canada, a large pulse processing firm that has a facility in Assiniboia, said his company is not knowingly buying U.S. product.
“There are companies and entities out there that are intentionally and aggressively sourcing U.S. pulses but Finora is not one of them.”
Donkersgoed said cross-border trade with the Americans is not an unusual occurrence.
“For the 15 to 20 years I’ve been involved in marketing pulses, they’ve gone both ways across the border.”
He contends there are plenty of bids out there and there was ample opportunity earlier in the growing season to lock in production, but growers haven’t found prices to their liking.
Lacklustre markets are the direct result of entering the 2005-06 crop year with record carryover supplies of peas and lentils, a stockpile that was more than double the previous high.
It is a “made-in-Canada problem” compounded by another massive pulse harvest and has little to do with the U.S. influx, said Donkersgoed.
Garth Patterson, executive director of Saskatchewan Pulse Growers, agreed there are many factors contributing to lower prices and grower unrest, but that doesn’t mean the association should ignore what could amount to the dumping of subsidized U.S. pulses.
Since the U.S. farm bill was introduced in 2001 plantings of the two crops have tripled to 1.25 million acres, three-quarters of which is seeded in the bordering states of North Dakota and Montana.
Saskatchewan growers report their American counterparts are selling yellow peas for $3 per bushel north of the border because they know they’ll receive another $2 per bu. top-up through loan deficiency payments from their federal government.
“Growers here would love to sell at $5 per bu.,” said Patterson.
In order to “quantify the hurt”, the association has hired Mercantile Consulting Venture, a Winnipeg firm headed by former Pulse Canada chair Marlene Boersch, to investigate the increased movement of peas and lentils into Canada.
Over the next couple of weeks she will try to determine how much product is coming into Canada, what it is selling for, what the cost of production was for American growers and how much of a government payment they will get this year.
Donkersgoed said one thing to keep in mind during the process is that finger-pointing is a two-way street. The Americans have long complained that Canadian pulse production has been unfairly subsidized through now defunct federal programs like the Crow Benefit rail transportation subsidy and the Gross Revenue Insurance Program.
If Boersch’s investigation uncovers dumping of U.S. pulses into Canada, the grower association may ask Ottawa to tack a countervailing duty onto American peas and lentils but that is only one of the options.
“There may be other ways of dealing with this,” said Patterson.
One alternative would be to launch a campaign imploring processors to buy locally. The association already took a step in that direction through some of the comments made by its chair.
“I understand that margins are tight for both farmers and processors. However, I would like to take this opportunity to express our board’s appreciation to those Canadian processors who continue to have a buy-Canadian philosophy,” said Corbett in a News release
news.
Hepworth doesn’t know what strategy should be used; he just knows the American invasion has to stop.
“It leaves absolutely no market left for us. Without a market, it’s pretty hard to farm,” he said.
