Saturday, April 30, 2016

Grand River Foods grabs more subsidies

Grand River Food will receive up to $3 million in repayable subsidies from FedDev for a $14.3-million expansion of the plant in Cambridge that it opened in 2004.

Last year it got $855,000 from FedDev and in the fall $1.3 a grant of $1.3 million from Ontario’s Southwestern Ontario Development Fund.

The company says it needs the expansion to keep up with orders that set a record last year and says it hopes to develop new products and break into export markets.

It’s products are private-label hamburgers, meat balls and chicken for companies such as Loblaws, Costco, M&M Food Markets, Subway and Tim Hortons.

The company has grown rapidly since 1999 when it was Grand River Poultry based in Paris.

Remember this when the next round of government cuts hits.

Friday, April 29, 2016

CFIA warns poultry industry about flu

The Canadian Food Inspection Agency is warning the poultry industry to step up biosecurity because waterfowl are migrating and could be shedding dangerous influenza virus strains in their poop.

That’s the probable cause of devastating outbreaks of avian influenza last year, wiping out millions of chickens and turkeys in the United States, three flocks in Oxford County, Ontario, and a number of flocks in the lower Fraser Valley area of British Columbia.

The CFIA is also warning that some avian influenza viruses can pass between people and birds.

Two commercial flocks were recently found to be infected with the H1N1 strain of avian influenza which is known to pass between people and birds, it says.

The CFIA also says highly-pathogenic strains of avian influenza have been confirmed in commercial poultry flocks in Mexico and the United States earlier this year. 

There is lots of information available on biosecurity protocols for the poultry industry, including the CFIA website, the Ontario Ministry of Agriculture, Food and Rural Affairs, the Poultry Industry Council and all of the poultry marketing boards, both provincial and their national agencies.

High stress impacts farmers

Farming is recognized as one of the most stressful occupations around the world and now the Ontario Veterinary College has a project underway to analyze data that was collected in a survey of Canadian farmers.

Dr. Andria Jones-Bitton, an associate professor of epidemiology in the Department of Population Medicine at the University of Guelph, recently told reporter Bruce Cochrane that there's been little research done looking at the mental well-being of farmers in Canada.

“We know that stress can affect us physically, mentally and it impacts our thoughts and our behaviors.

“Physically it can cause headache, muscle tension, fatigue, changes in our sex drive, high blood pressure, it can increase risk of disease like heart disease, it can affect our immune systems and make us more prone to getting infectious diseases.

“Prolonged stress can cause us to be anxious, irritable, angry, sad or depressed.

“It can cause us to have difficulty concentrating.

“It may result in us turning to substances like tobacco or alcohol or drugs or overeating or other bad habits so the effects are pretty widespread.

“It affects not just us but it can also result in us treating others poorly, even the people we love so It affects us and it affects those around us, our relationships, our work and our quality of life,” she said.

New research heats up bee-death issue

New research indicates that varroa mites and chronic bee paralysis virus are bigger bee killers than most have believed.

The research spanned a five-year period during which the two foes of bees took an increasing toll.

Dennis vanEngelsdorp, an assistant professor of entomology at the University of Maryland and co-author of the report, says varroa mites are a much bigger threat  and “moreover, varroa’s ability to spread viruses presents a more dire situation than we suspected.”

Another disturbing discovery is that the chronic bee paralysis virus (CBPV) that can kill bees within days has skyrocketed. 

When it was first detected in 2010, fewer than one per cent of bee samples tested positive. 

Now, just four years later, that number has nearly doubled each year and currently sits at 16 per cent.

The researchers plan on also studying the effects of pesticides on bees. 

Studies have found that neonicotinoid seed treatments are threatening bees around the world.

“Our next step is to provide a similar baseline assessment for the effects of pesticides,” vanEngelsdorp said. 

“We have multiple years of data and as soon as we’ve finished the analyses, we’ll be ready to tell that part of the story as well.”

Grain Farmers of Ontario has been trying to persuade the Ontario government to tone down its restrictions on neonicitinoids until this type of research is completed.

Thursday, April 28, 2016

Smithfield sets record for profits

Smithfield Foods reports a record-high first-quarter profit of $210 million, but it lost $83.5 million raising hogs.

The company made a profit of $201 million on packaged meats alone and another $99 million on fresh meat sales.

The company is owned by a Chinese meat packer, W.H. Group.

Foreign worker program change stalling

The Liberal government seems to be poised to delay a reduction in foreign workers scheduled to take effect July 1.

Employment Minister MaryAnn Mihychuk told Reuters news agency the schedule to reduce the cap on foreign workers from 20 to 10 per cent of an employer's workforce may be too ambitious.

The timelines were established by the previous Harper government after the CBC gave prominent coverage to situations that appeared to be abuses of the program.

"Ten percent has obviously caused a lot of disruption," Mihychuk said.

The move to 10 percent is part of a "progressive strangulation of the livestock industry" in rural areas, said Ron Davidson, spokesman for Canadian Meat Council.

Ray Price, president of the Sunterra Group in Alberta, said lowering the cap to 10 per cent would force him to lay off some people who really want to be working for him.

He said a shortage of workers has his pork-packing plant running at 70 per cent of capacity.

What irks me is that we have thousands of refugee arrivals from Syria who are existing on government and private sponsorship support. Can't they do some of these jobs?

Pilgrim's to dedicate a plant to organic chicken

Pilgrim’s Pride is making a huge bet on organic chicken processing.

It’s going to convert one of its plants to process organic chicken and believes it can capture 20 per cent of the market.

Its only big-company competitor is Purdue Farms which is in the organic market with its Coleman brand. The rest of the organic market is served by relatively small-scale processors.

Pilgrim’s Pride also intends to have more than a quarter of its chickens grown without the help of antibiotics by the end of 2018.

Costco, one of Pilgrim’s Pride customers, is planning to build its own chicken-processing plant.

Bill Lovette, chief executive officer for Pilgrim’s Pride, said Costco’s investment is to process birds of a certain size, not to reduce its procurement costs.

My wife and I are certainly pleased with the the large-size fully-roasted chickens they offer at an attractive price.

Dairymen intensify lobbying on import

Quebec’s Agriculture Minister, Pierre Paradis, has joined with leaders of the milk marketing board, Agropur and the Union des Producteurs Agricole to pressure the federal government to curb imports of diafiltered milk.

Wally Smith, president of Dairy Farmers of Canada, was also at the meeting this week.

They say they want federal Agriculture Minister Lawrence MacAulay to enforce the standards. 

“Canada’s dairy farmers speak with one voice on diafiltered milk,” Smith said. 

“We are collectively disappointed with the lack of action on enforcement of the cheese standards. 

“The government does not need to pass a new law or new regulation and the solution is simple. It needs to enforce the existing standards.”

MacAulay has said only that he has put a high priority on addressing the situation.

It's another example of why the Quebec dairy industry is about as welcome in Ottawa as a skunk at a garden party.

Vermey to head OPIC

Daryl Vermey has been chosen to be managing director of the Ontario Pork Industry Council, taking over from Lori Moser who has taken a new role as manager of Swine Health Ontario.

Vermey has been research and development coordinator for the Ontario Bean Growers, policy analyst for the Ontario Fruit and Vegetable Growers Association and program coordinator for the Agricultural Adaptation Council since he gained a degree in agronomy in 2005 and a MSc degree in agronomy in 2008, both at the University of Guelph.

He grew up on a farrow-to-finish hog farm in Chatham-Kent

$10-million loan for corn stover ethanol plant

The Business Development Bank of Canada is lending $10 million to a plant at Sarnia that intends to produce ethanol from corn stover.

Mario Saucier, spokesman for  BioAmber, said the loan will increase working capital.

It is a joint venture business with Mitsui of Canada.

The Business Development Bank of Canada is owned by the federal government.

Wednesday, April 27, 2016

Chobani employees get windfall

The owner of Chobani, the company that pioneered the Greek yogourt market in North America, is giving employees shares in the business.
For some, it could be worth more than $1 million.

About 2,000 employees of the upper New York state company got the news this week. Each got an envelope indicating how many shares they will get.

The longer they have worked for the company founded in 2005, the more they will get when the company is either sold or goes public on the stock market.

Owner Hamdi Ulukaya, an immigrant from Turkey, said he never imagined the business would be so successful.

It has an estimated value of between $3 and $5 billion US.

At one point it planned to open a plant near Kingston, but dropped those plans in the midst of marketing board politics and uncertainties. Instead it built a $450-million plant in Twin Falls, Idaho.

Following Chobani’s success, other dairy processors have launched their own Greek yogourt brands.

New soy-based lubricants hit market

Smart Earth Corp. of Surrey, B.C., has expanded its original Ecolub multi-purpose lubricant business to launch three specialty products.

They are Eco Grease, Eco Bar and Chain Oil and Eco 2-Stroke Engine Oil.

The company has been working with Soy 20/20 on developing and marketing of it’s products.

Soy 20/20 chief executive officer Jeff Schmalz says growers should be enjoying some of the benefits of Smart Earth’s success.

It buys high oleic soybean oil from special varieties.

Chicken farmers donate to food banks

More than 250 members of the Chicken Farmers of Ontario marketing board contributed more than 175,000 kilograms of chicken to food banks last year.

The board is urging members to top that total this year.

It offers an additional 700 kilograms of production rights per year for those who donate to the program.

The marketing board arranges for revenue from processors to be directed to the Ontario Association of Food Banks, or to a local food bank of the grower’s choice.

They receive a charitable-donation tax receipt the following year.

Other marketing boards, including those for milk, pork and eggs, also run food-bank donation programs.

Tuesday, April 26, 2016

E. coli case from 2007 still going

Cargill Meat Solutions successfully sued Greater Omaha Packing Ltd. for $9 million over E. coli contamination of its ground beef, but now Greater Omaha is petitioning an appeal court to hear the case again.

Henry Davis, president and owner of Greater Omaha Packing Ltd., says his company tested every shipment of beef trimmings to Cargill and did not find any E. coli 0157:H7 bacteria.

Omaha was also not Cargill’s only supplier.

But when Cargill filed suit in 2011, it said it was able to identify Greater Omaha Packing Ltd. as the source of the E. coli
contamination that led to a huge product recall. It sought about $25 million.

“Greater Omaha’s position is simply that you cannot mix its raw materials that tested negative for E. coli O157:H7 with other suppliers’ raw materials that have never been tested for E. coli O157:H7 or used a different testing protocol and then blame Greater Omaha when the end product is contaminated with E. coli O157:H7,” said Davis.

The case revolves around hamburger produced at Cargill over two days in August 2007. 

Greater Omaha argues while both days’ production had the same E. coli O157:H7 link, Cargill used Greater Omaha’s raw materials in only one of those days’ production while two other raw material suppliers were used both days. 

One of those suppliers was located overseas and never tested for E. coli 0157:H7, according to Davis. 

All of this ought to be watched closely by beef producers because it's becoming clear that they could be in for huge legal costs if suppliers can prove their cattle came to market carrying food-poisoning bacteria.

This could be particularly true if the producers failed to use a vaccine that is available to reduce the shedding of harmful bacteria. A recent survey found that only two per cent of producers use the vaccine.

Soy isolate fights food poisoning

An extract from soybeans kills harmful bacteria, such as listeria and pseudomonas that cause food poisoning, says a University of Guelph researcher.

Suresh Neethirajan says it works better than the “synthetic-based, chemical-based anti-microbial agents (which) kill bacteria indiscriminately, whether they are pathogenic or beneficial."

The compounds in soybeans kill only the bad bacteria, Neethirajan said in a report by CBC radio.

Soybean derivatives are already used in a variety of products including canned foods, cooking oils, meat alternatives, cheeses, ice cream and baked goods. 

Neethirajan, an engineering professor and director of the BioNano Laboratory at the university, said those with soy allergies need not worry about soy being used to prevent bacteria growth.

He said their method isolates the active component of the soybean from the protein that causes allergic reactions. The soy isoflavones that are chemically similar to estrogen are also weeded out.

What is left is a compound that naturally stops the bad bacteria.

"You do need good bacteria, beneficial bacteria, in our intestines to be able to properly process the food we eat, so that's why a lot of antibiotic food preservatives, which are made of synthetic chemicals, have ... side effects such as stomach cramps, diarrhea, bloating, gas," he said.

"Because of the selective specificity [by soy] towards inhibiting the pathogenic bacteria compared to beneficial bacteria, it will eliminate some of the health issues associated with the current synthetic-based food preservatives."

Neethirajan is now working to identify which varieties of soybeans are best at preventing bacteria from growing.

Ginseng buyer vanishes

Hang Fat of Hong Kong, the biggest buyer of Ontario-grown ginseng, has vanished.

Payments to growers stopped this year, but nobody’s talking to reporters about what’s happening.

Ontario Farmer placed many calls to the association and its president, but has had no responses.

Reporter Katia Dmitrieve went to the annual meeting of the Ontario Ginseng Growers Association at Delhi and reports in Bloomberg News that nobody was talking to reporters there, either, but they were huddling in clutches talking to each other.

Demand for ginseng has been strong, resulting in huge profits from the record 3,350 hectares in production this year.

That’s double the area in production five years ago.

Many people have made small fortunes on the crop over the last few years; if they’re worried that demand and prices might collapse now, they’re not showing it.

Ginseng production began in the 1980s after the collapse of the supply management system run by the Ontario Flue-Cured Tobacco Growers Marketing Board.

That set off a search for alternative crops. Potatoes, peanuts, various vegetables and some exotic crops are all being grown where tobacco once grew.

Ginseng requires shade, so growers stretch black netting over posts. It takes several years for a newly-planted crop to reach harvesting maturity, so capital investments are more than $50,000 per hectare.

There is no crop insurance.

Wheat quality is slipping

The bread-making quality of hard red spring wheat grown on the Canadian prairies is slipping.

Officials have known about it for four or five years because overseas customers have been complaining.

Now Manitoba Cooperator is reporting that Canada Bread is not happy. Vice-president Connie Morrison said the company spent $1 million last year buying gluten to supplement Prairie-grown wheat flour so it could get the desired rise in bread loaves.

Gluten gives bread-making flour strength to stretch and hold air so loaves rise high, the bread has air pockets and is fluffy.

It’s the high protein content of Prairie-grown hard red spring wheats that provides the gluten. Canada has long had a high standard for licencing new varieties so it can maintain high protein content, but that often comes at the expense of higher yields.

Farmers across the border in the United States grow higher-yielding, lower-protein wheat varieties and there has been widespread speculation that Canadian farmers have been planting some of those varieties.

The kernels looks similar enough to slip into the marketing stream. Proteiin also tends to be high when growing conditions are dry; that’s not always been the case in recent years.

Canada Bread was bought by Bimbo Bakery of Mexico last year and Morrison said the company’s bakeries in Mexico have also experienced gluten shortages with Canadian wheat.

She said Canadian quality has become “inconsistent”.

The Manitoba Reporter article says some believe that has happened since the Canadian Wheat Board lost its monopoly over export sales. Now global grain-trading companies handle exports.

Some also speculate that the concentration of marketing in the hands of fewer companies has reduced blending of wheat harvested from different regions and varieties to achieve acceptable quality.

Morrison said Canada Bread is looking forward to changes to Western Canada’s wheat class system starting Aug. 1, 2018, which will see lower gluten wheats removed from the premium milling Canada Western Red Spring wheat class and to a new class called Canada Northern Hard Red.

Sunday, April 24, 2016

Cedar Grove wins back CFIA licence

Cedar Grove S.E.N.C. of Inverness, Quebec, has earned back its Canadian Food Inspection Agency licence to produce and process maple syrup.

The licence was suspended Apr. 14 for failure to comply with standards for cleanliness and sanitation.

Friday, April 22, 2016

Wheat research lacks focus

Stephen Morgan Jones, a research scientist who has retired from the federal agriculture department, says wheat research lacks focus and funding.

Too many funders – provinces and farm organizations – are selecting projects and the result is too many small ones that run off it too many directions.

“The average size of an agronomy project is $60,000 (a year), which is pretty damn small, while the average size of the discovery project is around $300,000,” he told the Canada Global Crops Symposium in Winnipeg recently.

“Perhaps what’s more important is there are no real targets as to what we really want to achieve with that research investment. 

“So, for example, we talk about increasing wheat yield, but do we really have any idea of where we want to get to over the next five to 15 years?

“I don’t think we have that and in not having that we really have really very little to measure against as to whether we are being successful or not,” he is quoted by Manitoba Cooperator.

Morgan Jones was director general of the Prairie/Boreal Plain Ecozone Science when he retired in 2013 from Agriculture and Agri-Canada. Now he owns Amaethon, a consulting business, in Lethbridge, Alta.

He said wheat research would benefit from greater co-operation among national and provincial funders.

For example, Saskatchewan and Alberta run separate provincial funding programs ‘and give grants to fairly large numbers of people and as a result of that we have this small funding” per project, he said.

One exception is the high priority to find a way to eliminate the toxins that arise from fusarium mould.

Managing agriculture research has always been a huge challenge, but the track record shows that it worked better when the federal agriculture department's research branch was clearly in the lead and was well funded.

One flaw from the past was split jurisdiction with the feds doing the research, but the provinces insisting that they do the extension. It resulted in foolish friction and turf wars that did nothing to help farmers.

More recently, one of the big challenges is patents that make it difficult for researchers to build on each others' work and bring the results to market. 

Sows prefer cooler temperatures

Dr. Bernardo Predicala, an engineering researcher at the Prairie Swine Centre, has found that sows prefer cool temperatures.

His team developed a supplemental heating system that allows the sows to use a switch to increase the temperature of the room.

A normal temperature is 16.5 Celsius, but when he gave sows the ability to choose a temperature they like, they lowered the thermostat by about five degrees.

That amounts to an energy saving of seven to eight per cent.

Predicala’s research is based on trials over two winters and he plans to continue the trials for one more winter.

Thursday, April 21, 2016

Good's reply to lawsuit

Donald Good e-mailed me today to say that he has not received notice of any lawsuit filed by Sweda Farms.

That's in reference to an article posted on this site last weekend.

B.C. chicken farmers angry about Ontario

British Columbia’s chicken farmers are angry that Ontario has reduced chicken prices, forcing them to take the same cuts.

The price cuts began more than a year ago when the Ontario Farm Products Marketing Commission ordered the Ontario marketing board to reduce prices to reflect improvements in feed efficiency.

The commission followed that up with orders to make more cuts to reflect improving efficiencies flowing from increases in production volumes.

At the annual meeting of British Columbia’s association for chicken producers, president Ravi Bathe complained that prices now are the lowest in nine years and for some are not enough to cover costs.

I find that hard to believe. Surely if chicken farmers are losing money, they would cash in their quotas which in many cases amount to more than $1 million per farm. I don't see any evidence that farmers are selling out and pushing quota prices down.

The Farm Industry Review Board, British Columbia’s counterpart to the Ontario Farm Products Marketing Commission, has pegged B.C. prices to Ontario’s.

That has forced a reduction of 4.95 cents per kilogram.

Bathe said one of the reasons that’s not fair is that Ontario farmers can put more birds into their barns, but B.C. farmers are required to keep more space per bird so have to build more barns whenever their production allotments increase.

To rub a bit of salt into the wounds, Ontario recently and finally persuaded the national agency that it deserves the right to produce a greater percentage of the nation’s chicken.

But that sad history means B.C. and other provinces have for far too long held an unfair advantage over Ontario.

That’s being done by allocating a greater percentage of any increases in national production targets to Ontario.

Ontario is, in turn, using much of its increases to enable farmers without quotas to produce for specialty and niche markets.

Meat industry counters new report

The world needs to reduce meat consumption to reduce environmental damage, says a new report from the World Resources Institute.

But the American Meat Institute says the report is flawed, counting how much meat is produced, not how much people eat.

It fails to take into account waste, spoilage and pet food, the institute says, and it fails to acknowledge that meat is rich in nutrients.

The World Research Institute report echoes others that worry about issues such as greenhouse gases emitted by cattle.

The WRI reports says that “the average American could cut their diet-related environmental impacts nearly in half just by eating less meat and dairy.”

WRI said in a release that its goal is to shift Americans’ diets more toward a plant-based direction, not to see meat cut out of diets altogether.

“Many people — especially in rich countries — eat much more protein than they need, so WRI shows that they could cut back on meat and dairy while easily meeting their protein needs,” the organization said in the release.

For example, while the WRI report said that U.S. protein intake far outstrips nutritional need, NAMI pointed out that the Centers for Disease Control and Prevention and data considered by the 2015 Dietary Guidelines Advisory Committee indicate that “some men and some women both under-consume and over-consume protein, but on average, Americans are hitting the target.”

The meat institute says the WRI report also overlooks the more efficient production systems in the United States that have a lesser impact on the global environment than meat production in most other countries.

Wednesday, April 20, 2016

GFO loses neonic appeal

Grain Farmers of Ontario has lost its appeal against provincial government regulations sharply restricting the use of neonicitinoid seed treatment pesticides.

The judges unanimously ruled that the appeal fails because the issue is not how the regulations are interpreted; the GFO concern is really about the legislation.

It means that corn and soybean growers in particular will face three years of progressively-tighter restrictions. They will basically need to prove their fields are infested with insects and they need neonicitinoid seed treatment to save their crops.

The GFO has taken the battle to Queen’s Park and then the courts, but the regulations also impact many others, including the companies that market seeds to homeowners who grow vegetables and flowers.

The reason the provincial politicians passed the legislation is concerns raised by beekeepers that neonicitinoids are killing bees.

Researchers have more recently reported that neonicitinoids disorient bees so they fail to find their way back to hives and to revisit flower sites.

The GFO has announced now that it is hiring BDO to calculate and continue to track the financial impact of the neonic regulations on farmers. buying Better Farming has bought Better Farming magazine and its sister publications that are all part of Ag Media Inc.

Ag Media management will move to Guelph to join .

Better Farming was started in 1999 after the Ontario Federation of Agriculture folded its newspaper. Several staff members founded the new magazine; OFA helped by providing its membership list for circulation.

That enabled Ag Media to claim that it had the largest farmer audience in Ontario; it was able to make similar claims for Better Pork magazine.

Ag Media also publishes several things for the Ontario Federation of Agriculture, including OFA Today, OFA In Sight and the official show guide for the International Plowing Match. has several of its own publications, including Ag Buyer’s Guide, US Farmer magazine and Bechmark magazine.

More critics challenge study linking meat and cancer

 Reuters news agency is carrying a new story that raises more criticisms of a report that links meat to cancer.

It says the process that the International Agency for Research on Cancer (IARC) uses to classify substances by their likelihood of causing cancer is flawed.

Last fall, IARC issued a ruling that placed processed meat in the category of “carcinogen” and red meat in the category of “probable carcinogen.” 

That sparked sensational headlines, such as “Meat is the new tobacco” and prompted the World Health Organization, (IARC’s boss) to issue a statement to “clarify” the findings.

Now Reuters is questioning whether the scientists placed on IARC’s review panels are too often biased before the discussion begins. 

The protocol for evaluating red and processed meat is put forth as a prominent example of how IARC’s system may unfairly categorize substances.

Reuters quotes observers, scientists and officials of IARC, WHO and other public health agencies both criticizing and defending the agency’s processes.

The full Reuters report is at .

Canadian economists plead for new world trade deal

 The agricultural economists at Agri-Food Economic Systems say it’s time to negotiate a new world trade deal that puts teeth into commitments to cut farm subsidies.
Cutting subsidies was a driving force behind the Uruguay Round of world trade negotiations that for the first time came up with major reforms for agriculture.
The concern then was that farm subsidies in rich nations, such as Canada, the United States, Europe and Japan, encouraged surplus production which went into world markets at fire-sale prices.
That drove down prices and hurt all farmers, but particularly those in poor nations that could not afford to match the rich-country subsidies.
The one big change that came from the Uruguay Round was to convert all trade-distorting import restrictions into tariffs that are easy to see and understand and also easier to negotiate further reductions.
But no new deals have emerged because the Doha Round of negotiations is at stand-still after more than a decade of talks.
In the meantime, the authors of the Agri-Food Economic Systems study say many nations have found new ways to subsidize farmers without breaking the Uruguay-Round rules.
The upshot is little change from overall subsidies before the Uruguary Round, they say. While the letter of the agreement’s rules are obeyed, the spirit is undermined.

The richer nations have, by and large, managed to hold subsidies at pre-Uruguary-Round totals. Not so with some of the emerging economies.
“The increase was particularly rapid in Indonesia, the Russian Federation, Brazil, Kazakhstan, and China,” says the report.
They increased farm supports from the 1995-97 period to 2012-14 period by 43 per cent in the Russian Federation, by 33 per cent in Brazil, by 26 per cent in Kazakhstan and by 22 per cent in China.
One subsidy that’s important, but not counted, is irrigation water in the United States. It’s provided at well below cost and the resulting food production lowers prices not only in the United States, but also in many other countries.
Another example of ongoing, or new trade-distorting subsidies is offering “only small levels of market price support, making it easy to stay below their WTO limits even if the support activity impacts the national market as a whole,” says the report.
They cite a list of other trade-distorting policies, such as provinces, states or municipalities offering tax breaks or subsidies to set up new food-processing plants, subsidies that depress global food prices and subsidies on inputs, such as water, fertilizer and even environmental protection.
“There are issues in other pillars as well, such as national standards for environmental goods and associated product claims (and the problem of “greenwashing”), labour standards, and animal welfare. These have increasingly become market access issues, not contemplated under the existing pillars,” they say.
All of this generates frustrations and leads to disputes.
“One could foresee two or more decades of trade litigation on a case by case basis to tackle these issues one-by-one within the WTO framework,” they write.
“The frustration will come from the way in which the WTO rules were designed to protect or minimize some of the issues; a case in point may well be the underpricing of water for agriculture in the USA, and not including such underpricing in the domestic (or export) subsidy levels.
“No nation has challenged the way the U.S. has excluded this support to agriculture. Importers of U.S. product enjoy the lower price and hence have no reason to challenge. Other exporters face the problem of the immense costs to raise a successful challenge.”
All of these issues underline the need for a new deal, they say. But to inform the negotiations, “what we do not have today is a comprehensive, detailed study of and proposals for the various issues noted above, building on what took place over 20 years ago.
“It is time to design a framework to deal with these issues on a multilateral basis, rather than the tackling the myriad of issues through trade litigation,” they say.
“Such an approach would address many of the most politically toxic regional issues in several countries. Necessarily, this will be a long-term endeavor, but hopefully less costly and more inclusive than setting precedents one-by-one through WTO litigation, not all of which would have successful outcomes across the range of issues,” they write.
“Canada needs to take this issue more seriously. Canadian agri-food was revolutionized by trade liberalization in the early 1990’s, and this requires renewal.
“If aspects of proposed changes in supply management are challenged internationally, part of the defense of program changes and accommodation of supply-managed groups will need to be more effectively listening to their concerns about the structure of international trade disciplines and the actions of other countries under these disciplines,” they write.
An example of proposed supply management changes is the Dairy Farmers of Ontario plan to cut milk prices for processing protein isolates, thereby displacing imports and perhaps even generating exports. That could trigger complaints to the WTO.
Another dairy example is Quebec farmers calling for reform of cheese-standard regulations with the intent of reducing imports.
The research might also dampen rising criticisms of all international free-trade deals, they say.
There is urgency to these issues because the long run of relatively high farm commodity prices is ending, and the income-support programs many countries, including Canada, have put in place are likely to trigger massive payouts.
“It is an opportune time now to consider how countries are supporting agriculture and how this aligns with agreed upon commitments- both in strict magnitudes of support and in broader concept given the intent of the WTO agreement,” they write
“This should lead to reconsideration and modernization of our framework for disciplines on agricultural support.”
The lead author is Karal Karunagoda and among the co-authors is Douglas Hedley, former chief economist and a long-serving member of the trade negotiating team for the federal agriculture department.