The Rural Voice, 1987-10, Page 31the resultant jobs.
— statement by the Ontario
Cattlemen's Association, the Ontario
Pork Producers' Marketing Board, and
Ontario Members of the Canadian
Meat Council
Dairymen and poultry producers are
as convinced they cannot compete in
such a market, and despite assurance by
Minister of Agriculture John Wise that
marketing boards are not negotiable, the
supply management boards are not con-
vinced. They fear that while their
boards will be left intact, import restric-
tions, which are vital to their existence,
will be dropped. Statements by U.S.
congressmen have prompted these
fears, and perhaps the fears are justified.
The Canadian side has not issued any
statement to the contrary.
"It is important to realize that
"free" trade will not work for all
sectors of the economy. The
dairy industry is an example. It
is oriented to the domestic mar-
ket and has achieved a balance
that benefits all of society.
Disrupting this sense of order
would only hurt Canada and
the Canadian Economy."
— Ontario Milk Marketing
Board newsletter, Skim
Not everyone agrees, however, that
Canadian farmers with supply manage-
ment systems could not compete under a
freer trade deal. John Groenewegen, a
senior analyst with the financial
consulting firm Deloitte, Haskins, and
Sells, told farm writers last year that
under freer trade the poultry industry
would expand in Ontario but lose in
most other provinces.
This, he said, is because Ontario
poultrymen sit right in the middle of the
cheapest feed grain in the world (assum-
ing that subsidies are equalized). Since
U.S. poultry production is concentrated
in the American southwest, Iowa corn
must be freighted there. Since feed
comprises 50 per cent of production
costs, Groenewegen said, Ontario
poultrymen shouldn't worry about freer
trade. He added that prices would be
lower, thereby increasing demand. The
resulting benefit of scale would com-
pensate for the lower price.
"While the Canadian govern-
ment has made it clear that it is
committed to the preservation
of supply management systems
and their attached underpin-
nings, it has become equally
clear that tariffs are not consi-
dered to be part of such under-
pinnings and that trade negotia-
tors consider tariff removal a
priority item. This has raised
serious concerns in the Ontario
poultry industry which firmly
believes that tariff removal
would be highly detrimental to
their particular sectors and the
overall industry."
— the Ontario Poultry Industry
Committee on Tariffs and Trade
It seems, in fact, that the greatest
problem for supply -managed poultry
sector will probably not come from freer
trade with the U.S., but from freer trade
among Canadian provinces. There are
few, if any, provinces that can compete
with Ontario in poultry. Internal freer
trade would shift more of the industry
from the west and the east to Ontario.
In other commodities such as corn,
soybeans, and canola, equalization in
terms of subsidies would benefit Can-
adian growers, and soybean producers
in particular if the high U.S. tariff on
soya oil (22.5 per cent) were removed,
according to John Groenewegen.
And a trade agreement would extend
U.S. protectionism to include Canada,
thereby for the first time allowing
Canada into a large market similar to
that enjoyed by the U.S. and the Eur-
opean Economic Community (EEC).
The Huron Federation of Agri-
culture, in a brief to the Liberal Task
Force on Agriculture on January 30,
1986, stated that there was little scope
for increased agricultural trade with the
U.S. Instead, the brief said, we must
look elsewhere for new markets for our
expanding production. Ontario's
Minister of Agriculture and Food, Jack
Riddell, has made similar statements.
But this attitude seems to be wishful
thinking. The Ontario Pork Producers'
Marketing Board, for instance, has done
extensive research on finding markets
for pork in the Pacific Rim and Carib-
bean countries, with limited success.
There was an increase in exports to
Japan, but in terms of total pork exports
it was small. Or consider, for example,
that a city like Toronto consumes more
food than most island countries like
those in the Caribbean.
"How on earth we imagine that
as Canadians we're going to sell
the world its food down the
road is crazy — it's hopeless.
The world is growing its own
food now ... We've got to con-
trol the production system for
the benefit of those involved."
— Professor Tony Fuller, University
of Guelph, research advisor on an
EEC -commissioned study of how
European farm families are managing
to survive agriculture in the '80s.
In addition, anywhere where there is
a market for agricultural products the
EEC, and now also the U.S., is flooding
these markets with subsidized products,
leaving the U.S., in many cases, our only
significant export opportunity.
FACT: Farm subsidies in the
U.S., which are paid primarily
through loans and direct income
support, were about $23 billion
(U.S.) in 1987. The EEC
spends about $90 billion (in-
cluding EEC and national
budgets) a year on its support
systems. Japan's agricultural
support programs are worth
more than $20 billion a year. In
Canada, the sum this year is $6
billion (Can.), including the $1
billion special grains subsidy.
For Third World Nations, the
strain imposed by international
subsidies is even greater.
OCTOBER 1987 29