The Rural Voice, 1993-12, Page 16(ALmAR)
Durum
Political squabbles over durum
wheat between Canada and the U.S.
shouldn't bother grain or livestock
producers in Ontario where no
durum wheat is grown. Yet, if the
U.S. does impose "emergency
quotas" on durum, feed wheat and/or
western barley, the consequences
will be felt in Ontario. Users of feed
grains will benefit, and sellers will
get less for their production as
western surplus feed grain supplies
filter cast, some of it under domestic
transportation subsidies.
So what's all the fuss about?
Well ... mostly U.S. politics.
Underneath the U.S. complaint is the
fact that Canadian shipments of
durum wheat have been increasing
in volume into the U.S. In fact it is
about the same as Canada's imports
of con from the U.S. From the
west, Canada exports about 50
million bushels of all wheats to the
U.S. while in the east and B.C. total
corn imports for the last crop year
Robert Mercer
wheat, and the Ontario fallout
are also close to 50 million bushels.
As Canada is a net importer of pasta,
the U.S. gets the value added
industries and jobs, yet it is still
complaining.
U.S. Sena-
tors, and the
state wheat
associations in
the northern
U.S. Plains
States are
concerned as
they say
Canadian wheat
is unfairly
subsidized, and
for the most part
complain about
the trans-
portation
subsidy — the
Crow Rate under the WGTA
(Western Grain Transportation
Authority).
In rebutting the U.S. claims, the
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12 THE RURAL VOICE
Western Canadian Wheat Growers
Association pointed out to U.S. Ag -
Sec Michael Espy that although
there is a transportation subsidy, the
subsidy applies to the domestic
movement of grain to eastern
Canada and the export market in
general, but not to shipments of
grain made to the U.S. through
Canada's west coast ports or direct
from the prairies. The Association
went on to say that under the FTA
both parties agreed to Canada's
transportation subsidy as well as the
U.S. Export Enhancement Program
(EEP). The FTA also allowed
Canada's use of end-use certificates
on improved wheats. They are
freely available and do not represent
a non -tariff barrier that some in the
U.S. claim.
The U.S. complaint over
Canadian shipments into their wheat
states is one admission that their
farm programs are not working. If
they were well designed they would
have sufficient durum wheat to meet
their own needs, and their quality
would be as good as the Canadian.
As it is they fall short on both
counts.
The Canadian freight subsidy on a
per tonne basis is $18.34 or 39
cents/bu in U.S. funds. Recent EEP
subsidies on wheat to Mexico are at
a level of 75 cents and to other
countries as high as $1.50/bu. No
wonder Canada is complaining about
the U.S. harassment in the Mexican
market as well as its current friction
over durum shipments.
If the U.S. Senators get their way
and block, to some extent, Canadian
wheat and barley shipments, then
that will add pressure to the over-
supply in the prairies. Lower priced
western grain would then flood the
Ontario market, knocking prices
lower in spite of any potential rally
in the Chicago corn market.
There are a lot of people who be-
lieve that behind the U.S. complaint
is the political move that matches the
votes of those complaining with the
passage of NAFTA through the U.S.
legislative system. The U.S. admini-
stration tried to keep these grain
state senators from scuttling NAFTA