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More of the same will not produce different
by Paul Beingessner
(Tuesday, Sept. 23, 2003 -- CropChoice guest commentary) -- Farmers in Canada feel under siege. Though this feeling has taken a
quantum leap forward with the BSE crisis and American wheat tariffs
against Canada, it has nevertheless been building for decades. Most
Canadian farmers are increasingly reliant on exports and prices for
these have been stagnant for two decades. World markets no longer seem
to respond to price signals that once drove prices up when world grain
stocks plummeted. Input costs rise continually, and generally much
faster than inflation.
If Canadian farmers feel under siege, and so they should, imagine the
despair that is gripping farmers in Third World countries as they see
world markets flooded with cheap products from wealthy countries that
dump them into these markets. (As an aside, it is politically incorrect
now to talk about "Third World" countries. They are "developing"
countries. In fact, much of the Third World is sinking deeper into
poverty and becoming less "developed".) How, for example, can the
Mexican farmer with a hoe and maybe a single small tractor grow corn to
compete with the American farmer receiving massive government subsidies
to produce 200 bushel an acre corn on thousands of acres? The North
American Free Trade Agreement (NAFTA) opened Mexican markets to American
ag exports and is devastating the Mexican farm economy.
The answer to all these problems was supposed to come out of the World
Trade Organization conference in Cancun, Mexico. According to countries
like the U.S. and Canada, that answer is more trade, more exports and an
opening of hitherto closed markets. And while governments and some farm
organizations get all excited by this prospect, farmers in general give
a cynical shake of their heads. They've seen it all before.
Like when we signed the Canada/U.S. Free Trade Agreement in 1989 and the
NAFTA in 1994. The problems facing the ag sector were to be solved by an
increase in trade. Canadian farmers responded with gusto. Canadian
agri-food exports rose from a value of $10.9 billion in 1988 to $28.2
billion in 2002. This near-tripling of exports resulted in a staggering
increase in realized net farm income in Canada from $3.9 billion to $4.1
billion in the same time period. Staggering, because when adjusted for
inflation, it represents a 24 percent drop in income.
Now, Canadian farmers, and farmers across the rapidly shrinking globe
are being told that more of the same, on a much larger scale, will solve
their problems. If Canadian farmers have trouble falling for this one
again, imagine how hard it must be for farmers in India or Egypt. Many
Third World countries have suffered as brutally as their farmers in this
new economic world order. These countries had a small surplus in the
food trade balance in the late 1970's. That means the value of their
food exports exceeded the value of food they had to import. Today, that
surplus has become a deficit of $6 billion. It is projected to grow to
$18 billion in 12 years.
The Cancun meeting saw something almost unprecedented in world trade
talks. For almost the first time, poor countries banded together in a
block to oppose the position taken primarily by the European Community
and the U.S. Led by India, China and Brazil, the so-called G21 demanded
an end to subsidized dumping and greater access to markets in rich
countries. All this would not be inconsistent with the official line of
the rich countries except for one thing: the G21 are saying they do not
want to give up their own subsidy programs or further open their markets
to the rich countries until they make back some of the ground they lost.
Nor is it some Third World fantasy that the agriculture sector in poor
countries has suffered as a result of increasing world trade. The UN's
Food and Agriculture Organization acknowledges that the last round of
world trade talks, the Uruguay Round, worked for wealthy countries and
disadvantaged the poor.
Canada tried to talk the good talk in Cancun. Trade Minister Pettigrew
agreed that the trade playing field must be re-balanced to undo some of
the harm done to poor countries by prior WTO agreements. But, having
hitched its wagon to the horse of increasing exports, the Canadian
government continues to push for greater trade access to the markets of
those same countries.
Unfortunately for this strategy, Canadian farmers are beginning to
realize that increasing access to the markets of a world that is
essentially saturated with cheap food and dominated by a few
multinational food companies will not bring any greater good.
The search for real answers is more complex. Canadian farmers, and
farmers worldwide are beginning to realize this. There is a lot of work
to be done.
(c) Paul Beingessner, (306) 868-4734 phone 868-2009 fax | |
