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Propaganda wins over truth every time
by Paul Beingessner
(Wednesday, Sept. 3, 2003 -- CropChoice guest commentary) -- Since the Cold War ended and governments adopted globalization and international trade as the panacea for we-are-not-sure-what, a whole new cold war has opened up, sparked by trade itself.
On this new battlefield, nations sign agreements that promise greater trade by lowering tariff barriers and reducing domestic subsidies. After these are signed, various interest groups in those countries spend the ensuing decades trying to subvert the agreements to gain some advantage. Caught at the bottom of this massive pile-up is usually the little guy -
the farmer or worker in the affected industry.
In this new cold trade war, the first casualty, as in all wars, is truth. Propaganda displaces fact and reason is simply shoved out the window.
Probably some of the best examples of this new cold war are found in the field of agriculture. A recent ruling by the U.S. Department of Commerce (DOC) concerning Canadian wheat exports to the U.S. is a prime case.
Released August 29, that ruling slapped punitive tariffs of approximately 14 percent against Canadian spring wheat and durum going into the U.S. The ruling will achieve what nine previous attempts over the past decade by American farm organizations and governments have failed to do - it will shut down exports of Canadian wheat to the U.S.
(Note that the last decade of such complaints coincides with the life span thus far of the Canada/U.S. Free Trade Agreement.)
As a Canadian farmer, I have a hard time looking at this trade war with unbiased eyes, so I will have to admit to my bias and let the reader judge my opinions. As I said earlier, much of what passes for fact in trade wars is simply propaganda. Consider the press release from the
North Dakota Wheat Commission (NDWC). In celebrating its victory, the NDWC ran somewhat roughshod over the truth.
The press release repeats many of the contentions made in the NDWC's original statement of claim. Thus it lists the benefits that accrue to Canadian farmers by virtue of the Canadian Wheat Board's relationship with the Canadian government. These include government guarantees of initial payments to farmers, government credit extended to foreign
buyers, government backing for CWB borrowings, etc. The press release
says "the Commerce ruling substantiates the NDWC claim that the Canadian
Wheat Board sells wheat with the aid of government subsidies and without
regard for its true market value."
These statements are designed to create an impression, but how true are
they?
First of all, the original points raised by the NDWC were almost all rejected by the DOC. It denied that credit sales to foreign buyers represent an unfair advantage. No credit arrangements are available to American customers. The DOC also rejected the notion that Canadian regulations regarding railways and short lines give some advantage to
Canadian farmers. Nor did the DOC attack the Canadian grading system, which the NDWC claims penalizes Americans wanting to export to Canada.
Only in two areas did the DOC find fault. It said the government
guarantee of CWB borrowings represented a subsidy, as did government
ownership of part of the grain hopper car fleet. (In fact, grain going
to the U.S. pays ownership costs for the cars that carry it. The DOC
simply said it did not receive evidence on that point.)
The claim in the NDWC press release that the CWB sells wheat "without
regard for its true market value" was rejected outright by the U.S.
International Trade Commission (ITC). The ITC found that Canadian wheat
and durum sold in the U.S. fetches consistently higher prices than
similar American grain.
The press release claims that the proof of damage to American farmers is
found in the reduction in spring wheat and durum acres in the U.S. since
the Free Trade Agreement. It fails to mention that Canadian acres of
wheat have also fallen dramatically in this time period - due to the
severely depressed price of wheat on world markets.
There are many ironies in all this. Imports of American corn into Canada
are much larger than our wheat exports to the U.S. These have depressed
the price for Canadian feed barley in our domestic markets. Americans
are also blamed for destroying the livelihood of many small Mexican
farmers since the North American Free Trade Agreement was signed in
1994. Cheap American corn, propped up by massive government price
supports, has flooded into Mexico.
Oddly enough, the NDWC showed no shame in recently asking the U.S.
Department of Agriculture to provide trade financing for flour mills in
Indonesia. "Indonesia's imports could be... double or triple the current
level - if guaranteed credit or other trade financing would be
authorized". The NDWC is asking for the very thing it attacked Canadian
farmers over - credit sales to foreign countries.
The other pillar of the American judgement against Canadian farmers
concerned dumping. After demanding the records of 27 Canadian farmers,
the DOC decided the CWB sometimes sell wheat below the cost of
production. Surprise, surprise! Market prices are sometimes below the
cost of production! Since the ITC decided that Canadian wheat sold in
the U.S. fetches higher prices than comparable American grain, American
farmers must be selling below the cost of production as well!
It is all most unfortunate. As I have said repeatedly in this column,
farmers around the world do not receive adequate compensation for what
they produce, but the problem is not other farmers. The problem is an
economic system that leaves farmers powerless against the near
monopolies that buy their product and sell them their inputs. When
Canadian farmers benefit by setting up their own "monopoly", the
Canadian Wheat Board, it is sad that other farmers, or organizations
claiming to represent them, would try to destroy it.
(c) Paul Beingessner (306) 868-4734 phone 868-2009 fax
beingessner@sasktel.net | |
