CANADIANS watching Americans fashion farm policy are simultaneously
impressed and appalled.
We admire the sincere respect American law makers have for producers.
When President George W. Bush tells farmers and ranchers they are
“central to the American experience,” he appears to mean it. It is rare
for a Canadian prime minister to express such affirmation.
On the other hand, we are repelled by the willingness of American
politicians to spend tax dollars on a deeply distorting farm program
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while lecturing other countries about their efforts to support farmers.
This month, all actors in the American farm policy drama are on stage
and the action is building to a peak that would make Shakespeare
applaud.
The United States Trade Representative is taking the first steps toward
a World Trade Organization challenge of the Canadian Wheat Board, while
in a conference room on Capitol Hill, congressional representatives are
trying to compromise on a new farm bill.
There seems to be no recognition of the irony in railing against a
Canadian system that usually operates without a dime of taxpayer
support while politicians parse the details of how to lavish an
additional $73.5 billion US on American farmers.
American trade officials say they want to use the Doha round of WTO
negotiations to dismantle state trading agencies such as the CWB.
Gathering allies for this mission will be difficult when their new farm
bill garners near universal reproval outside of the United States.
But such external criticism falls on ears that are deaf but to a
domestic agenda tied closely to the American election cycle.
Political power in many Midwestern states depends on winning the
support of rural voters keenly interested in strong farm bill support
for corn and soybean producers.
While driven by a domestic agenda, the external implication of the farm
bill is that the U.S. has no intention of disarming in the agricultural
trade debate.
Rather than an embarrassment, a rich farm bill is seen as a tool that
gives America strength in reaching its WTO goals of reducing trade
distorting farm subsidies and increasing market access.
Its war chest will be well funded to face down the European Union,
which it rightly sees as the main villain on the farm trade stage.
The Canadian Federation of Agriculture says it regrets that farmers
here will be forced to watch and suffer as this drama plays out for the
next five years and maybe more.
The federation sees the implications for Canadian farmers, but it is
not sure the federal government is fully aware of them, preoccupied as
it is on developing its own new agricultural policy framework based on
food and environmental safety, scientific innovation and farmer skill
upgrading.
These are laudable goals. But the CFA says the policy will fail if it
ignores the fundamental implication of American farm bill spending, and
that is cheap grain, the foundation upon which rests so much of the
industry, including livestock, milling and ethanol.
Cheap American grain is already interfering with Canada’s goal of
increasing livestock production and processing.
Of the 5.8 million hogs marketed in Manitoba last year, close to 30
percent were weanling-feeder pigs sent south to be fattened on cheap
feed grain.
So far this year, more than 155,000 Canadian feeder cattle have been
shipped to the U.S., up about 250 percent over the same time last year.
U.S. grain subsidies are not the whole story. Drought, fusarium and the
strong American dollar are also factors in the stampede across the
border, but the subsidy impact can’t be ignored. If not offset, more
livestock will head south, taking with them jobs and economic activity.
The CFA is right in saying policy makers here must recognize this link
between the foundation of grain production and the superstructure of
high value agriculture.
American farm spending is destabilizing the ground and without proper
safety net support the foundation of Canada’s agriculture economy, the
grain producer, will crumble.
