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All things considered: October 2009

Plan B


October 26, 2009
By Jim Knisley


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Mike Gifford says Canada’s supply-managed agriculture sectors need a Plan B.

Mike Gifford says Canada’s supply-managed agriculture sectors need a Plan B.

Gifford told poultry producers at small FCC sponsored meetings across Ontario in August that the Doha Round of international trade negotiations will gain momentum this fall, that differences over industrial and service-sector subsidies and protection could quickly be sorted out and that agreement on agriculture is virtually a done deal. The result would be an agreement sometime next year.

That agreement would result in a phase-in of increased access and lower over-quota tariffs.

These are the measures that the supply-managed sectors have so strongly opposed. But Gifford, who was Canada’s trade negotiator for all things agriculture at the GATT, NAFTA and the WTO during the Uruguay Round and is now at Carleton University and a member of a think tank on international trade policy, says Canada is completely isolated.

He believes Canada cannot stand alone and will have to sign on if a deal is reached. The only significant barrier to reaching a deal is U.S. domestic politics and he is not referring to U.S. agriculture policy. U.S. politicians are completely engaged by macroeconomic policy and their health-care debate.

One might also throw in the wars in Afghanistan and Iraq with the former become increasingly intense. But if the Americans decided to just pay a little attention to the WTO a deal could come quickly.

At this time Canada and the supply-managed sectors are completely unprepared. All of the energy has gone into a futile effort to keep the trade barriers around supply management in place. There has been no time spent on preparing policies and programs that would ease the transition, he said.

This combination of policies and programs would be Plan B.

Gifford believes that the best way to develop such a plan would be to make it transparent and clear to those involved in the industry  to determine what is needed and government to determine what is possible.

In a fully rational world that, I guess, would be ideal. It would give producers time to prepare, to make proposals and to adjust to what may be coming.

But this world isn’t fully rational. It is also political, which tends to take us as far from rational thinking as possible.

Politically, developing a Plan B in public might be a big mistake. In public politics there is seldom room for more than one plan. If you develop a Plan B it is generally perceived that it is the new Plan A and that the old Plan A is gone, finished and no longer exists.

An example of this from the 1980s is the debate over the Crow Rate. Many of you who are my age and live in Western Canada will remember this. The Crow Rate was the regulated freight rate the railways were allowed to charge to move grain from the Prairies to export position in Thunder Bay or the West Coast. The railways hated it and said they were losing money. Most (or many) farmers loved it.

The federal government wanted to change and increase it. But the major farm groups of the time, dug in their heels and engaged in a long, bitter battle. The Pools and other farm groups refused to budge and the politicians didn’t want a firestorm.

But then there was a big meeting in Ottawa. The government of the day seemingly convinced some of the farm leaders that change was coming. On a plane from Ottawa to Western Canada one of those leaders told a reporter that his group would have to be flexible.

The reporter did what reporters do and wrote the story. The next day when the public read this the ground under the debate shifted and the end of the Crow Rate was in sight.
So somewhere over Lake Superior the fight to save the Crow suddenly changed to the fight by farmers to get what they could.

So while it may make eminent sense for supply-managed industries to prepare a Plan B in case Doha succeeds, doing it in public or acknowledging that they are doing it might backfire.

But it wouldn’t be a bad thing to be able to pull some “talking points” out of a back pocket and have some options (that government officials had quietly mulled over) available if Doha succeeds. But keep quiet about them.

Generally, I believe in full exposure of just about everything. I don’t like secret negotiations. In addition, I don’t believe that having a Plan B means that Plan A has been deserted. But I believe that if a Plan B is publicly acknowledged others will believe that Plan A is dead.

You also don’t want Plan B on the table for Canadians, Americans or politicians to pick away at if Doha fails. You want Plan A as your only public position and Plan B to be headed for the shredder.


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