Trade dependent. Holy Crap. Canadian farmers are.
This Yodalike wisdom uttered from my yesterday, our deadline day, as I waded through interviews I’d done in the past week about both pigs and flax.
(Photo above screen-captured from a fan website. A Star Wars fan website, I mean, not a Western Producer fan website.)
The stories had little to do with one another. The flax story was just a follow to news that Grain Millers and the Pizzeys are building a new flax plant at Angusville and Minneapolis-based Grain Millers Inc is going to be making specialized flax products there and at two of its U.S. plants.
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The pigs stories were both about the execrable USDA decision on how to modify Country of Origin Labeling in order to comply with the World Trade Organization’s finding that the system clearly discriminates against Mexican and Canadian livestock imports, and therefore must be fixed. (USDA wants to make the discriminatory provisions even more extreme).
Both subjects dealt with the intertwined and entangled production and trading relationship we have big markets. We sell a lot of flax to China, use a tiny amount here in Canada, at one time sold a lot to Europe (Nobody say “Triffid” please), but sell the rest to the thriving and lucrative American food market. Flax, like oats, is a crop that tends to be grown here then either sold by Canadian companies to U.S. processors, or sold here to offshoots of American companies. Either way, we grow the stuff and they get it, spinning off jobs and having a good, cheap North American product as the base. We all come out ahead. That used to be the situation with Europe, the primary market. Canadian flax would go to Rotterdam, get unloaded and crushed in the low countries, the oil would be shipped to linoleum flooring makers and the meal would go to Belgian dairy farms. We grow the crop, they a cheap feedstock of materials for booming flooring and dairy industries. Win-win-win.
With pigs it tries to be the same way. Manitoba’s weanling industry produces piglets and ships them a few hours south to southern Minnesota and Iowa to be fed-out. It’s been a mutually-beneficial situation, in which the higher health status of Canadian sow barns tends to produce healthier piglets than common in Midwest U.S. barns, but the piglets are better off being fed-out in the Midwest because of its mountains of corn and soybeans. In the end, most of the jobs end up in the U.S. at packing plants and food processing firms (and consumers get cheap food), but we get our little bit of the action and thriving little industry in southern Manitoba.
As noted many billion times by ceaselessly chattering types like me, Canada has a huge land mass, many natural resources, but few people, so we are forced to be outward-looking and a trading and exporting people. Both flax and pigs show us at our best, producing top quality crops and getting them wherever the demand’s greatest, finding willing buyers in many of the world’s nooks and crannies.
But both industries have been shocked by trade disruptions that have devastated them and caused many farmers to abandon the commodity. Flax got hit when tiny amounts of an unapproved genetically-modified variety – Triffid – got into the commercial system and ended up at trace levels in many crops. The European Union slapped down a ban on Canadian flax for all but the least valuable purposes, and that market disappeared. It doesn’t matter that the European position makes no rational sense and is not based on any apprehension of any sort of risk, but just on a draconian ban of unapproved GM traces: it’s their market and we have been reliant on it.
Same with the Americans and pigs. How many times have I covered U.S. attempts to block imports of Manitoba pigs? Since I moved to Winnipeg in 2011 I’ve covered a string of such attempts. It didn’t stop the industry expanding, but it sure has helped it contract as bad times have turned to worse. It should, based on economic merits, be a natural, sustainable business, but unfortunately one must consider American gamesmanship, ruthlessness and belligerence when making investment decisions, it seems. (As I have pointed out before, many American farmers, industries and people oppose things like COOL, but that hasn’t stopped their system imposing such things)
Both sets of people I’ve spoken to in the last week – the Flaxies and the Piggers – have sensibly focused on reasonable solutions and intelligent long-term strategies. The Flaxies are trying hard to expand markets to more countries, industries and applications so they aren’t do dependent on just two or three. The Piggers have spent years developing overseas markets for Canadian pork, and when you see things like the USDA’s recent proposed “revision” to COOL, you can see why. The U.S. is not a market Canadian farmers can rely upon. Neither is Europe. Or any big market. And both industries are beavering away at breaking down the trade barriers that have been erected against them.
The federal government has tried to focus on market access and development as keys to reducing the risk of trade blockages, and it’s hard to find fault with that. The more reliant we are on trade, the more we need to have people we can trade with, and the Europeans and Americans have both shown that it’s dangerous to rely upon any one market, even if it’s been lucrative.
Our industries and governments need to push and push and push away at the barriers blocking our entry to markets around the world, because we will never know when the next major market is going to suddenly shut us out. The one thing we can know is that it will certainly happen again.
