April 26, 2005
Directors of the Canadian Wheat Board traveled to Geneva this week to protect their jobs at the World Trade Organization. They say they are going to protect western Canadian farmers, but their actions will significantly hamper the one thing that would help farm incomes the most – real trade liberalization.
How much is the Wheat Board spending to go to Geneva to fight against farmers’ best interests? We can’t know for sure, but it will almost certainly cost between $30,000 and $50,000 to send three representatives to Europe.
Farmers have not choice in this matter. Their money is being used, yet they don’t have any option on where to market their grain and no say in how the Wheat Board spends their cash. This is wrong for a number of reasons, especially at a time when farm income is among the lowest it has been since the Great Depression.
The price for 90% of Canada’s farmers comes from the world market. These prices are at historic lows, not because of anything our farmers have done, but because of the actions of foreign governments. Tariff barriers and foreign subsidies are choking the life out of our agricultural sector. Agriculture and agri-food represents almost 9% of Canada’s gross domestic product and thousands of jobs – jobs that are under attack by foreign tariffs and subsidies.
Experts using Agriculture and Agri-Food Canada’s own research show that European and American subsidies take 1.3 billion dollars out of the pockets of grain farmers every year. The elimination of tariff barriers for Canadian beef alone could increase Canada’s farm incomes by over $1 billion every year. Tariff barriers have closed India to Canadian canola oil exports. The correction of this problem would give us a market for at least 500,000 tonnes more canola every year and probably more.
Let’s look at it another way. An average wheat producer could see annual farm cash receipts increase by as much as $27,000 if tariffs were eliminated. In addition consider the $14,000 extra on the bottom line for an average grains and oilseed farmer, every year, if we can eliminate export subsidies and trade distorting supports. On top of this you could also factor in significant gains in the overall Canadian livestock sector as well.
These are just some of the many examples of the benefits that our economy would see if the world can agree to substantial trade liberalization. Everyone should stop and think for a moment on what this would mean for rural Canada, our farmers and the taxpayers of our entire country who are continually bailing out struggling export industries.
You would think that every representative of grain and livestock farmers would be fighting as hard as they could for this outcome. You would think so, but you would be wrong.
Directors of the Canadian Wheat Board are actually spending farmers’ money to fight for the status quo which is hurting the very farmers they claim to represent.
It is time for a different kind of dialogue in Canada’s agriculture community. We should not be fighting to protect what we have, we should be aggressively pursuing the massive opportunities for growth we could have if we get a meaningful world trade agreement.
The Canadian Wheat Board should not be going to Geneva to fight against farmers’ best interests; they should be staying at home and developing a plan that will allow Western Canadian agriculture to take advantage of the new trading environment.
In announcing another $1.1 billion in badly needed assistance for Canadian agriculture, federal Minister of Agriculture Andy Mitchell acknowledged that government support is not a long-term solution to the crisis facing our family farms. The Minister is right. The Government of Canada will not compete against the U.S. and Europe in the subsidy game.
The Canadian economy depends upon the world market. This is especially true of agriculture, perhaps more so than any of our other economic drivers. Any long-term solution to chronically low farm incomes, rural depopulation, and lack of investment in rural Canada must involve real trade liberalization.
Politicians, like Minister Mitchell, surely know this to be true. Yet they don’t say it publicly, and they don’t offer the leadership on the world stage that Canadians deserve.
Why is this the case? The answer is because lobbyists like the Canadian Wheat Board are fighting change every step of the way and are doing so with farmers' own money. This is a despicable abuse of farmers, it is wrong and it needs to stop.
Rolf Penner, Agriculture Policy Fellow (2003-2007) is a successful third generation farmer who operates an 1800 acre mixed farm near Morris, Manitoba. His farm is soundly diversified into two parts, half the operation consisting of feeder hogs and the other cropland. Both of which have consistently grown in size, sophistication and scope. He owns a 2000 head hog barn and also operates two more 2000 head hog barns in partnership with 3 neighbours. Crops rotated on his land include wheat, oats, barley, timothy, flax, rapeseed, canola, alfalfa, peas, lentils and sunflowers. He sits on various agriculture industry committees. As a producer delegate with the Manitoba Pork Council he received an education award in 2002. His many practical skills include the general maintenance and operation of heavy machinery, welding, carpentry, electrical work, basic veterinary care, marketing, accounting, and computer work. He graduated from the University of Manitoba with a diploma in Agriculture in 1988. Rolf is a frequent media commentator on agriculture issues and writes frequenty in a range of daily, weekly and monthly newspapers.