Business & Policy
From the Editor: October 2009
A System That Works
By Kristy Nudds
In August, Farm Credit Canada (FCC) hosted four meetings in Ontario
featuring former federal trade negotiator Mike Gifford, who spoke to
producers about a “worst-case” scenario if the most recent draft of
modalities for agriculture
In August, Farm Credit Canada (FCC) hosted four meetings in Ontario featuring former federal trade negotiator Mike Gifford, who spoke to producers about a “worst-case” scenario if the most recent draft of modalities for agriculture in the Doha round of trade talks is accepted (see “Doha Isn’t Dead,” page 36).
He told the audiences, “We’re dreaming in Technicolor if we think at the end of the day, everybody else in the world is going to reduce over-quota tariff rate quotas, except Canada.” The worst-case scenario sees a 23 per cent cut in over-quota tariffs and increased access to the Canadian market.
However, Gifford’s worst-case scenario is contingent upon the U.S. showing leadership and focusing on the trade talks. With domestic concerns such as health-care reform and high unemployment rates, it’s uncertain as to when the U.S. will be able to focus its energies on the WTO. Even when it does, the current economic climate has made all those involved in the talks more protectionist, so whether or not a deal can be made next year is still debatable.
Regardless, Gifford’s worst-case picture stirred some interesting debate and, in my view, hammered home the need for poultry producers to always keep the importance and benefits of supply management in the minds of local, provincial and federal politicians.
Gifford believes that if the worst case becomes reality, there is no reason supply management cannot continue to survive and prosper despite a decrease in over-quota tariffs. He noted that agriculture has demonstrated in the past it “has the ability to adjust to new trade regimes,” pointing out the recovery of the Ontario wine industry, which rebounded with government assistance that allowed the replacement of grape varieties and market development.
This example did not sit well with Egg Farmers of Ontario General Manager Harry Pelissero, who is from the Niagara region (Ontario’s primary wine-producing area). He pointed out the flaw in Gifford’s argument – although the wineries have done well under NAFTA, the grape growers have not.
Pelissero, who attended the FCC meeting in Watford, also noted that decreasing over-quota tariffs will impact Canada’s poultry industry by reducing our ability to price our products. He said producers should really be asking their elected officials not only if they will support supply management, but if can they guarantee that farm incomes won’t be affected.
He makes a good point. Perhaps sacrificing a small percentage of domestic production to appease the WTO doesn’t seem like that big a deal to Ottawa, but the impact on the producers could have financial consequences. Gifford referred to this when he noted that if the current modalities are accepted, there will be pressure on high-cost producers to exit.
But part of the beauty of supply management is that new innovations and consumer demands can be met and implemented without bankrupting producers. The same cannot be said for industries reliant on export markets.
So, we should be asking elected officials not only if they will guarantee farm incomes, but if they will continue to support a system that allows a country to feed itself with food produced by Canadian farmers.