Tim McGreevy’s reaction to Canada contemplating a countervailing duty on American pulses wasn’t shock or outrage. It was laughter.
The executive director of the USA Dry Pea and Lentil Council finds the situation ironic.
“U.S. growers have often considered filing a dumping case against Canada,” he said.
In 1995, the U.S. exported 8,605 tonnes of pulses to Canada and imported 35,235 tonnes of peas, lentils and chickpeas.
“Don’t think that the U.S. growers were real pleased about that,” said McGreevy.
Ten years later the tables have turned.
Read Also
Canola oil transloading facility opens
DP World just opened its new canola oil transload facility at the Port of Vancouver. It can ship one million tonnes of the commodity per year.
During the first seven months of 2005, the U.S. has shipped 40,964 tonnes of pulses, primarily edible peas, to Canada while bringing in 33,259 tonnes from its northern neighbour.
McGreevy said a 7,705 tonne trade imbalance is hardly the basis of a dumping allegation, adding that total exports to date represent less than one percent of Canada’s anticipated pea and lentil production.
“Come on. Is that dumping? Everybody has low prices, that’s the problem. If we had higher prices there wouldn’t be any of this going on.”
Saskatchewan Pulse Growers said the issue is the price imbalance, not the trade imbalance.
The association is investigating complaints from growers in the south-central part of the province who say they can’t sell their peas and lentils to local processors because American farmers are undercutting them with subsidized product.
If it determines dumping is taking place, one option will be to push the Canadian government to impose a countervail duty on American pulses.
As of Sept. 30, the loan deficiency payment for American pulse growers amounted to $2.33 US per hundredweight for dry feed peas, or $1.85 Cdn per bushel.
Saskatchewan Pulse Growers worries that handsome government top-up is enabling U.S. farmers to sell into Canada at market-distorting prices.
“Pulses have been a bright light for our farmers and the continued flow of U.S. product into Canada could result in the permanent loss of our production and processing capacity with a corresponding reduction in the value of our industry,” said SPG chair Dean Corbett.
McGreevy acknowledged U.S. pulse growers are receiving some assistance because pea and lentil prices are well below the 10-year average, but they are “absolutely not” selling product below their cost of production.
He said the reason more edible peas are flowing into Canada is that American growers want to take advantage of cheaper rail rates to get their product to port position due to Canada’s railway revenue cap.
“Right now the Canadians get a whale of a break.”
McGreevy said there is also a mistaken belief that government LDP payments motivated American farmers to seed 1.25 million acres of pulses this year, up from the 400,000 acres they planted in 2001.
“The truth is that energy costs are driving what growers are planting right now,” said McGreevy.
Farmers have discovered the nitrogen-fixing benefits of including pulses in their rotations.
If anyone should be blamed for triggering low prices through overproduction, it is the Canadians, he said. Twenty years ago there were less than 400,000 acres of pea and lentil production in each country. Now there are 1.25 million acres in the U.S. and 5.8 million acres in Canada.
McGreevy said the impressive growth north of the border has been fuelled by beneficial government policies such as the now defunct Gross Revenue Insurance Program.
“The dart is being thrown our way now. Well hey, wait a minute, there’s a little responsibility on the other side of the border here. Who has increased the acreage?” he said.
