The Rural Voice, 2000-11, Page 49PERTH 1!�
County Pork Producers NEWSLETTER
Striving for true competition
Any opinions expressed herein may
not necessarily reflect the views of
the Perth County Pork Producers'
Association.
Farmers, given a choice, would
overwhelmingly choose to earn their
livelihood from the marketplace I
believe, and not to depend on
government for their survival. Prices
received for produce must be
sufficient to earn a reasonable return
on investment and payment for
labour. Grain and oilseed producers
have met in large numbers across the
province this past summer to
highlight their plight and look for
solutions.
Currently there is much discussion
about safety -nets for agriculture. Pork
producers worry about possible
countervail duties being levied again
by the U.S. if any new stabilization
program is commodity specific. Even
though Canada and the U.S. signed a
free -trade agreement and recent talks
at the WTO centred on reducing
subsidies, the U.S. has the highest
level of farm support subsidies along
with Europe and Japan. These high
subsidies have the effect of distorting
the normal supply and demand forces
in the market and keep many
commodities at a very low level.
Canada recently hosted the Cairn's
conference in Banff, Alberta. The
Cairn's group of nations include
about 19 like-minded countries. They
are advocating total elimination of
trade distorting export subsidies and
the lowering of domestic subsidies.
They hope that by banding together
that they will have more clout at
WTO talks. After 16 years in
existence their efforts have had no
effect.
Some of Ontario's pork producers
had the privilege of meeting with
producers from Michigan this past
summer. In discussion with one of
them I asked him what per cent of the
total population is made up of
farmers. He said that in the U.S.
farmers make up approximately three
per cent which is very similar to
Canada. How is it that this three per
cent has more clout it seems with
their government than we have here
in Canada? It must be that their
government views agriculture with
more value than our government here
in Canada. Even in Quebec, farmers
receive nearly twice as much
stabilization as we do in Ontario.
The argument made by our federal
government is that the Canadian
government treasury is not as large as
the U.S. so the Canadian government
can't afford the same level of
subsidies. I don't buy that argument
completely because the farmers in
both countries make up
approximately the same percentage of
the population so the funds required
are the same on a per capita basis. I
think it is more a case of having the
political willpower to adequately
support agriculture.
We shouldn't have to rely on
subsidies, but we operate in the world
and if our major trading neighbour to
the south has a higher level of farm
support, then we should have the
same level to keep our farmers
competitive. Canada could then work
to reduce subsidies at the world level,
BUT in lock -step with the U.S. so our
farmers don't get left behind.
Getting back to our marketplace,
the pork processors are seeing their
profit margins squeezed by higher
live hog prices. They are also saying
that their wholesale price for pork is
less than their U.S. counterparts. The
U.S. has a more competitive retail
Jim Van Herk, President
519-595-4863
• The Rural Voice is provided to Perth
County Pork Producers by the PCPPA.
sector. Because of consolidation there
are only three major grocery retail
buying groups in Canada for
processed pork.
The U.S. has an Act called the
Robinson-Patman Act that is meant
to prevent predatory pricing.
Predatory pricing is when a very
large retailer with many locations
would lower the price at only one of
their locations to eliminate an up -start
competing retailer. Canada's closest
equivalent to the U.S. Act is the
Competition Act. The Competition
Act was given more teeth three
months ago. The Competition Bureau
is the government body set up to
administer the Act. A recent example
of this Act in action in Canada was
when newcomer CanJet accused Air
Canada of predatory pricing on only
those routes where CanJet was
operating. The Competition Bureau
ruled in CanJet's favour.
Governments in recent years have
been pulling back and letting private
business run things more and more.
Open, unregulated competition
among big businesses of the same
product often leads to them trying to
undermine or destroy each other with
the result of one of them having a
near monopoly. They then have the
power to raise prices to consumers.
TRUE competition results in the best
possible price and quality to the
consumer. Governments can't take a
back seat. They must step in to ensure
that there is true competition.0
— Submitted by Gerald H. Kolkman
PERTH COUNTY PORK PRODUCERS'
PORK PRODUCTS
• Smoked Pork Chops • Fresh Pork Chops • Stuffed Loin Chops
• Smoked Sausage• Smoked Cheddar Sausage • Bacon Burgers
• Teriyaki Pork Steaks • Vittorio's BBQ Sauce
AVAILABLE FROM:
Steve Hulshof (Kinkora) 348-8167
Martin van Bakel (Dublin) 345-2666
Walter Bosch (Monkton) 356-9000
Ted Keller (Mitchell) 348-9836
NOVEMBER 2000 45