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NAFTA challenge sign of desperate times

by Paul Beingessner
Canadian farmer, writer

(Monday, Aug. 23, 2004 -- CropChoice guest commentary) -- A fellow I know works for the provincial crop insurance corporation here in Saskatchewan. A recent comment he made took me a bit by surprise. "You have no idea just how bad it is out there."

Well, actually, I can guess. For example, recent numbers from Statistics Canada say the Canadian cattle population has ballooned to the highest level in history. That means, of course, farmers still have a lot of cattle on their farms that they would have sold, but for the awful prices. Calves from last year, older cows that have seen one too many winters, bulls that would have been retired to the sausage factory. All these represent foregone income.

The BSE crisis came on top of a poor crop production year in 2003 as most of western Canada baked under a summer-long heat wave. Despite relatively poor crops, prices were nothing to get excited about. So it isn't surprising it's really bad out there. The surprise is that farmers and ranchers are still hanging on.

This summer, the crop picture is different. Across much of the prairies, crops are excellent. There is only one problem. With the end of August approaching, millions of prairie acres are still grass green. It is scarcely possible to imaging these crops maturing before a hard frost takes its toll on quantity and quality.

So, yes, I can imagine just how bad it is out there. And not only for farmers. Businesses small and large are also feeling the pinch, in rural and urban areas.

Perhaps all this explains the ever-more radical sounds coming from Alberta - the heart of conservatism. The latest is the effort by a group of feedlot owners to launch a NAFTA challenge to the American government over the closure of the border to Canadian cattle. There was also the recent blockade that prevented American-owned cattle from getting into a packinghouse in Alberta. This was organized by some of the same cattle feeders.

The NAFTA challenge was discouraged by federal and provincial governments, as well as the Canadian Cattlemen's Association. The prevailing theme here seemed to be that making the Americans angry would only be counterproductive. R-CALF USA members echoed that sentiment recently.

It is an interesting notion - that world trade is conducted based on how much you like someone and how nice they are. Interesting, that is, because it is so nonsensical. Trade is conducted, like every economic activity, because the parties to the trade each believe it is to their advantage. When the U.S. re-opens the border to Canadian cattle, they will be bought and sold based on this principle.

Proof of this is found in the fact that companies engaged in bitter lawsuits will continue to do business with each other before, during and after the lawsuits. Countries allow trade with their most bitter enemies, even while railing against them in the court of public opinion.

The Alberta feedlot owners know the risk of retaliation is small - small, especially, when compared to the surety of financial disaster if the Americans continue their illegal border closure. Rather than standing back and watching, Canada's governments should join the suit against the American government, or else launch their own. History shows little evidence that the policy of appeasement has worked before. It isn't likely to any time soon either.

The NAFTA challenge, given the cost associated with it, and the time required for completion, is an act of desperation. It comes from the fear that the border may remain closed indefinitely. While the politicians initially were reassuring us the border would open based on the science of the issue, that is, when we were in compliance with OIE requirements, they are not saying much about that any more. Their inability to solve this problem has given rise to the actions from Alberta. Nor is this likely to be the last of such initiatives. There has also been talk of border blockades and boycotts of things American. Desperate times call for desperate measures.

(c) Paul Beingessner (306) 868-4734 phone 868-2009 fax beingessner@sasktel.net