WTO won't remedy farm income woes - WP editorial

The World Trade Organization talks appear to be foundering, no doubt causing hand wringing in some agricultural circles.

Many Canadian farmers have long hoped that a strong move toward freer trade would slash subsidized overproduction and buoy grain prices, allowing farm incomes to rise.

But those who look to the WTO to raise

the income of grain farmers put too much hope in it.

The WTO Uruguay Round agreement in 1994 and almost constant talks since 2000 did little if anything to help Canadian farmers’ incomes. Indeed, incomes have been miserable the last few years.

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Even if the parties to this Doha Round of negotiations make a deal in Hong Kong by their December deadline, it is unlikely to quickly or significantly improve life for Canadian farmers.

Sure, good things might come from an agreement.

It might inject fairness into global farm trade, slowing the ability of developed nations to pour money into production of crops such as sugar that should in fairness be produced by southern, developing nations.

And it might reduce the European Union’s tendency to overproduce some grains and rein in the American farm subsidy regime. Perhaps it will even eliminate tariff inequities, such as those that give more favourable treatment to soybeans compared to canola.

But it won’t stop the larger global forces creating new “breadbaskets” around the world in places like Brazil, Argentina and the former Soviet Union.

These regions are opening millions of acres of new cropland and investing billions in agricultural infrastructure to become major grain exporters.

Expanding production in these areas will keep grain prices capped.

Nor will a WTO agreement stop the consolidation of agribusiness and the growing market power of a few grain handlers, meat processors and input suppliers. Farmers have a dwindling status in the global agricultural industry and face ever increasing costs over which they have no control.

So rather than wring hands about

faltering WTO negotiations, farmers and their representatives would do better to push hard at government and industry for tools to increase their power and address their income inadequacy.

The recently released report by Wayne Easter, parliamentary secretary to agriculture minister Andy Mitchell, contains several such tools and ideas worthy of consideration and adoption, such as new guiding principle for government that farm policies should enhance farmers’ returns from the market, stronger competition laws, an environment that fosters farmers’ collective marketing initiatives and a regulatory environment shaped to lower input costs.

Such initiatives are more likely to have a sustainable positive impact on farm income than a trade agreement.

International trade rules are not irrelevant and they must be made more fair.

But they must be recognized as just one part of a broader plan to rebuild farm income in Canada.