IT IS a constant theme in Canadian trade policy: production-affecting domestic agricultural subsidies are open to negotiation and targetted for reduction but supply management tariff protections should be retained.
They were excluded from the North American Free Trade Agreement, protected in the last world trade agreement and exempted from the recently approved free trade deal with Costa Rica.
When Canadian trade negotiators head to Qatar this week for the latest attempt to launch a new broad-based world trade negotiation, they will try to protect over-quota tariffs on dairy, poultry and egg products that often exceed 100 percent.
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On the Prairies, this increasingly is seen as a federal double standard that guarantees some farmers an annual and somewhat hidden consumer subsidy worth billions while making others who require visible government subsidy feel either under-supported or targetted as welfare bums.
The federal government argument is simple: supply management is a domestic marketing choice that has little effect on world trade and it works.
Consumers receive a guaranteed supply of affordable food and cost-based pricing means that dairy, poultry and egg sectors remain healthy.
Never mind that dairy and egg sectors now have decided they want the best of both worlds Ð protection for higher priced domestic production and the ability to export a portion of production into lower-priced foreign markets.
No matter. Supply management is to be protected. Trade minister Pierre Pettigrew made that clear again in late October, before travelling to WTO talks where tariffs will be under attack.
It is true that supply management has been one of Canada’s most successful farm programs. While many farm sectors have had to beg for help from Ottawa and provincial capitals, farmers protected by supply management rules have had the security of knowing that regulated domestic consumer prices will pay the bills.
Yet on the Prairies where export-dependent farmers struggle to make a living from subsidy-depressed prices, there is resentment at federal reluctance to maintain visible subsidies while continuing support for Quebec and Ontario-centred supply managed industries.
There also is resentment that because their aid pleas and government spending are so visible, the Prairie grain sector is widely seen as the subsidy centre of Canadian agriculture.
But what about the forced transfer of billions of consumer dollars to dairy farmers? Isn’t that subsidy too?
Federal economists apparently agree.
The federal government’s latest farm financial data book shows Quebec farmers are the most subsidized on mainland Canada.Supports available to prairie producers were near the bottom – $10.50 per $100 of production value in Saskatchewan last year compared to $20 in Quebec. Yet the focus is on supports to prairie farmers.
“That’s a policy double standard pure and simple,” said University of Saskatchewan economist Richard Gray. “Who could deny it?”
Deny it or not, it is a policy double standard Ottawa appears to have no intention of ending.
