For as long as marketing boards have
been around people have been predicting their demise, especially before or
during a round of trade talks. After the first North American Free Trade
Agreement (NAFTA) was signed, the price of egg quota fell by almost half,
says Laurent Souligny. But producers were not harmed.
Chairman of the Canadian Egg
Marketing Agency, he says a lot of work still needs to be done at the
negotiating table for the current talks, but he’s optimistic the
government will defend Canadian farmers. The premiers and the prime
minister have signed a declaration of support for the Quebec farmers
union, he says.
But changes are upon us. The 147
nations in the negotiations have already made concessions, effective
immediately, agreeing to cut 20 per cent of the domestic support allowed
in the last GATT talks. Steve Verheul, Canada’s chief agricultural
negotiator, says Canadian farmers will lose a modest amount, because
Canada hasn’t come close to using the $3.4 billion allowed annually by
the WTO. The disaster part of the new safety net program will escape but
the income protection or stabilization component will take a hit. The U.S.
Farm Bill programs will lose the full 20 per cent.
Though there is no definite
deadline, a December 2005 meeting is expected to trigger more cuts. But
Verheul doesn’t expect them to be cataclysmic. Supply managed boards
will have to give up some access and the high tariffs will be lowered.
What are marketing boards hoping?
Chickens in Canada have a tariff of 238 per cent and the country
previously opened 7.5 per cent of the chicken market to foreign countries.
Last year, Canadian chicken farmers produced 934 million kilograms of
chicken. Canada was the sixth largest exporter of chicken in the world but
also the tenth largest importer. As long as Canada doesn’t give away
more than five per cent of the market and other nations are forced to
honour their commitments, marketing boards will do all right, says Paul
Ruel, manager of trade policy for Chicken Farmers of Canada.
But chicken farmers might not be
happy campers in a few years. Verheul says the only thing agreed upon by
the 147 nations is that market access must increase and level of tariffs
reduced, with the highest levels of tariffs getting the deepest cuts.
Sensitive products — milk and dairy products, eggs, chickens, rice and
cotton — will be subject to a special formula yet to be made public.
Flexibility will be built in, permitting one commodity to be sacrificed
for the benefit of others. A nation will be required to meet overall
targets.
However, the Doha Development Agenda
that came out of Geneva in July is a gentler document than the one from
Mexico more than a year ago. Verheul calls the current negotiations a
process. "The Agenda is more in line with the political realities of
the countries represented," he says.
WTO officials understand that the
elimination of support, whether of farm subsidies or tariffs, could have
devastating effects on some rural communities and the future of
politicians.
Still, despite the optimism and
faith in Canadian negotiators, there are some troubling aspects. First,
given the U.S. penchant for keeping out our beef, pigs, soft wood lumber
and wheat, along with our own government’s tepid responses, how can we
trust our government to make sure Canadian farmers get a decent
settlement? Look at our record. Canada imported (US)$9.6 billion in
agricultural products last year from the U.S. The U.S. secretary of
agriculture, Ann Veneman says (US)$1 billion in agricultural exports
created 25,000 jobs. We provide a quarter of a million jobs for Americans;
and even though the international organization that monitors disease and
trade says there’s no reason to keep the border closed, we can’t
negotiate an opening for live cattle.
Secondly, the Doha agreement says
that tariffs will be reduced progressively and in the end substantially.
Does that mean hardship is coming?
Canadian cattlemen and dairy farmers
figure there’s more mercy in hell than in Washington. Who can be sure
there’s a kinder, gentler WTO?
— T. Meagher