Agri-food exports set a new record

Wednesday, November 7, 2012

by SUSAN MANN

The federal government says it’s currently undertaking the most ambitious trade expansion plans in Canadian history but farm community reaction to the direction is mixed.

Representatives from the farm community were asked their opinions in response to today’s release in Ottawa of the 2011-12 Agriculture and Agri-Food Market Access Report, issued by Agriculture Minister Gerry Ritz and Ed Fast, minister of international trade.

Al Mussell, senior research associate with the George Morris Centre, an agricultural think tank in Guelph, says Canada needs to trade farm products to fully utilize its large arable land base and capacity to produce food that is far greater than what the domestic market needs.

Mussell has not yet seen the report but notes the federal government has been very clear and consistent in its message promoting trade and new agreements as a driver of economic growth. It’s a “laudable and very rational strategy,” he says. “If we try to have everything that we produce in Canada or in Ontario or virtually in any province come to market in that area, prices would be pretty darn low or we’d have to take valuable land out of production.”

Ron Bonnett, Canadian Federation of Agriculture president, agrees that the government’s trade agenda is more aggressive than it has been at any time previously. That’s positive for farmers. But “the one thing we will continue to watch is to make sure that supply management is protected,” he says.

Bonnett says what works are strategies to improve trade flowing between countries combined with others to boost domestic production. He also applauds the government’s efforts to diversify the number of markets Canada can have access to. Historically “we have been tied predominately to the United States market and if there’s a big hiccup in the U.S. that hurts us,” he notes.

But Ann Slater, coordinator for the National Farmers Union, Ontario branch, disagrees that expanding worldwide trade boosts domestic farmers’ incomes. Ontario NFU members remain concerned “about this focus on trade,” she notes, adding that in trade agreements Canada always has to give up something.

Ritz says in written speech notes Canadian agriculture and agri-food exports reached $40.3 billion last year, setting a new record.

Mussell says “high grain prices will do that for you. A big part of the actual value is just straight up going to be the increase in value of what it is we’re shipping.”

Still, Mussell says the government deserves recognition for a number of trade-related accomplishments outlined in the report, particularly the successful challenge of the United States Country of Origin Labelling law at the World Trade Organization (WTO).

The federal government’s release says the successful WTO challenge should lead to the end of discrimination against Canadian exports of cattle and hogs to the United States that cost those industries hundreds of millions of dollars.

Other Market Access report highlights include:

• restoring access for Canadian beef under 30 months of age to South Korea, which could reach $30 million in sales by 2015, according to industry estimates; and
• maintaining access for Canadian canola to China, a market worth $1.6 billion in 2011.

Ritz says government and industry are working hard to increase Canada’s market access by advancing free trade agreements, working to overcome trade restrictive measures and trade obstacles while promoting science-based approaches to trade, and leading trade missions with industry to the country’s key agri-food markets worldwide.

The federal government remains very focused on trade because it drives one in five jobs in Canada, Ritz notes.

The government’s release says opening and expanding agricultural markets around the world provides opportunities for farmers to drive the Canadian economy, creates jobs and sets the stage for greater prosperity in the future.

Slater says NFU’s data shows that while export markets have been increasing agri-food imports into Canada have also been rising. “Part of trade agreements is to allow more products back into Canada too,” she points out.

NFU’s data for Canada as a whole from 1970 to 2009 comparing total agri-food exports and imports and total net farm income shows that realized net farm incomes are not increasing despite the government’s increased focus on trade, she says. BF