Grain exporters beg in vain for U.S.-E.U. mercy

Western Producer staff

One by one, the victims of the grain trade war trooped up to a podium in Washington recently to describe how their governments have, or plan to, disarm. They were crying “uncle,” leaving their fate to the goodwill of the big players in the war – the Americans and the European Union – to be nice, to adhere to trade agreements, to honor a negotiated truce and to proceed with their own disarmament.

It turned into a sorry spectacle during a meeting of the International Federation of Agricultural Producers (IFAP).

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From Argentina, A. L. Defino described the government decision to abolish the National Grain Board a few years ago, leaving its grain farmers at the mercy of the market. There has been pain, he said, and many farm failures. Farmers are considering creating a private grain exporter but do not have the investment capital.

From Australia came the news that not only has the government gotten out of the grain subsidy business, but the Australian Wheat Board is moving out of government hands and may even lose its export monopoly.

From Canada, there was a report of the end of transportation subsidies, of deregulation, of sharp cuts to farm income support programs and of a general government decision that it cannot afford to swim in the same subsidy swamp as the big guys.

Unstated was the fact that for as long as it takes for the Americans to win, the role of the Canadian Wheat Board as a state-supported monopoly exporter also is under challenge.

For Canada and the other “side-swiped” trade war victims, the world trade agreement proclaiming the beginning of the end of the trade war was an excuse to begin budget cuts that go far beyond what the deal actually requires.

The new rules of the game seem to have given players like Canadian agriculture minister Ralph Goodale confidence that Canada can disarm because soon, commercial sanity will govern world grain markets.

So, did all this forelock-tugging and belief in the rule of trade law win plaudits from the big players and promises to reduce their own subsidies in the spirit of the end of the trade war?

Hell, no! They put the world on notice that while most other countries saw the world trade deal as setting a minimum for subsidy cuts, they saw those rules as the maximums.

The Europeans were more subtle about it. Reform is under way, they assured the audience. Subsidies and protection are falling but social considerations mean the pace cannot exceed the requirements of the deal.

And as usual, the Americans played the role of the china-shop bulls.

All grain traders are guilty to one degree or another, proclaimed American foreign trade bureaucrat Tim Galvin.

Instead of praising the small-country retreat from the battlefield, he proclaimed monopoly exporters a new enemy that will draw American subsidy fire until they too are abolished and Americans can be sure that they will be able to get their proper share of any market they covet.

For farmers in Canada, Argentina and Australia, how comforting.