Corn Duties are a Last Resort

By Jim Romann, A freelance agricultural journalist based in Waterloo, ON

This is a reprint from the February 6, 2006 Manitoba Co-operator

The beef and port producers are trying to drive a wedge on the issue of duties on U.S. corn, dividing the ranks of free-market Canadian farmers.

This wedge is on top of the divide that already exists between the supply-managed dairy and poultry sectors and the rest of Canadian agriculture.

The beef and port producers are wrong.

The corn producers and the duties on U.S. corn are not the enemy.

The enemy is U.S. farm subsidies, and all Canadian farmers can and should be united in opposing them.

The U.S. farm bill provides favourable treatment for corn and soybeans, enabling U.S. farmers to produce unlimited quantities regardless of market demand and prices. They can count on the U.S. treasury.

That cheap corn and soybeans fuel the U.S. livestock, dairy and poultry industries.

If the U.S. were forced to drastically reduce its subsidies for corn and soybeans, and not introduce new ones for livestock, dairy and poultry producers, Canadian agriculture would be transformed from despair to hope.

The fact is that the U.S. could be forced to drastically reduce those subsidies.

Third World countries, led by Brazil, have shown how it can be done by using the World Trade Organization. It's clear that U.S. and European subsidies for grains and oilseeds have harmed world markets, so surely Canada could be filing a protest at the WTO.

That's what the Ontario Corn Producers' Association asked our federal government to do. The government would not file that challenge.

So the Ontario Corn Producers' Association asked the federal government to make up the difference with Canadian subsidies. They have strong support for that point of view from grains and oilseeds producers right across Canada.

The federal government has not, and will not, match U.S. subsidies for corn, wheat, barley, soybeans, canola and related crops that suffer unfair competition from subsidized U.S. corn and soybeans. And from European exports.

This is why the Ontario Corn Producers' Association reluctantly filed an application for a government investigation into whether U.S. corn subsidies are hurting the Canadian market.

The answer was obvious, and so the decision that came from the Canadian Border Services Agency should have surprised nobody. What did surprise some was the degree of the duties, totaling $1.65 (U.S.) per bushel of corn.

That, my friends, is a lot of U.S. subsidy and a lot of Canadian pain.

The corn producers knew their action would be controversial, that everybody who imports U.s. corn would be angry.

They also know that, in the long run, duties on U.S. corn will be counter-productive because it will reduce Canadian demand for corn and leave the door open to competitors, such as barley and feed wheat.

That's why the Ontario Corn Producers' Association has said from the beginning that this is an interim measure, intended to pressure the federal government to do what it has asked in the first place: to file a TWO challenge against U.S. subsidies and to provide subsidies for Canadian farmers until the U.S. is forced to back down.

The Canadian Cattlemen's Association and the Canadian Pork Council are hiring lawyers to challenge the duties.

This is a mug's game. The only people who benefit are lawyers, paid at the expense of impoverished farmers.

The Canadian Cattlemen's Association, the Canadian Pork Council, the corn producers and all of the other Canadian grains and oilseeds organizations ought to get together and agree that the real issue is U.S. subsidies and the lack of Canadian government support for the just and fair solutions grain and oilseed growers are seeking.

It hasn't made more than 10-cents-a-bushel worth of difference to their cost to buy Ontario corn so far, and isn't likely to get any worse before this year's harvest. Compared with grain and oilseed producers, they really have nothing to complain about. Yet.