Globe and Mail | By Steven Chase | Sept. 9, 2003
CANCUN, MEXICO -- Canadian farm groups are fighting a move at global free-trade talks in Mexico to drastically scale back the protection from foreign imports that dairy, egg and poultry producers have enjoyed for about three decades.
They warn that proposals to ratchet down agricultural tariffs, backed by the United States and other key players, could devastate the livelihood of farmers in Canada's supply-managed system who produce Canada's milk, eggs, chickens and turkeys, as well as processors who make cheese, yogurt and ice cream.
"It would be almost a total destruction of the industry as we know it now," Jacques Laforge, first vice-president of the Dairy Farmers of Canada, said in the resort city of Cancun for the World Trade Organization talks that officially begin tomorrow.
They say that lowering tariff barriers before bigger issues, such as U.S. and European farm subsidies, are substantially dealt with could let in too much foreign dairy, eggs and poultry, and disrupt the production system in Canada.
"We have an expression in dairy: It takes 20 years to create a dairy farmer, by the time he's trained . . . and it only takes one year to lose one if you got too much fluctuation," Mr. Laforge said.
Separately, World Bank president James Wolfensohn said he expects no major breakthrough in the deadlocked WTO talks even as trade ministers from Canada, the United States, Europe and elsewhere hold frantic, last-minute preparatory negotiations to salvage the meeting.
Agriculture -- chiefly how to reform protectionist policies such as farmer subsidies -- has divided the 146-member WTO into several camps and stalled talks on all subjects.
"It would be hazardous for anybody to predict that Cancun is going to be a breakthrough. It is our hope that there will be some progress," Mr. Wolfensohn told reporters in Washington.
The draft negotiating text for Cancun calls for "substantial improvements" in agricultural market access, including tariffs or levies used by countries to discourage foreign imports.
Some countries are pushing for farm tariff cuts of as much as 60 per cent.
But even small cuts would damage Canada's supply-managed farmers, said Perter Clark, an Ottawa trade consultant.
"These are commodity products, and the price drops to the price of the last unit available," he said.
"So if you can bring in another 5 or 10 per cent [of imports] . . . it can be devastating to the price."
To shelter farmers from volatile world markets and subsidized foreign producers, Canada restricts imports of "supply-managed" agricultural products -- dairy, eggs and poultry -- and limits domestic production by quota.
Canada allows foreign producers access to a fraction of supply-managed markets, but penalizes any imports above this with steep tariffs that often exceed 200 per cent of the product's price.
About 26,000 farmers work in the dairy, egg and poultry industries in Canada, and produce about $6-billion worth of goods annually.
Another 37,000 people work in related processing industries that turn these commodities into food such as cheese and ice cream, selling about $14-billion worth of products a year.
Wealthier countries pledged in Doha, in November, 2001, to make substantial cuts to the more than $300-billion in annual government handouts to farmers that plague world trade and hurt poor countries. But now countries are squabbling over who should cut handouts more.
Canadian dairy, egg and poultry producers say the massive subsidies are the real culprit in international trade today. Subsidies cause farmers to overproduce and flood the market with so much product that it drags down world prices and blocks access for poorer countries to consumers of wealthy countries.
Canadian farm groups say it's very easy for countries or blocs with deep pockets, such as the United States and Europe, to support slashing agricultural tariffs at trade talks because it costs them nothing: They can compensate their farmers from any loss of market share through subsidy handouts.Globe and Mail:
