Canadian ag’s geopolitical position

Canadian ag’s geopolitical position
Nov 07, 2019

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The global trade rules are changing, and Canada’s agriculture industry must be prepared to respond 

By Jackie Clark
Staff Writer
Farms.com

Canadian agriculture is facing a unique state of economic and geopolitical change.

 The newly elected minority government is addressing trade disputes, financial support for farmers, geographically divided politics, and climate change. These interrelated issues are all significant for the ag industry.   

“I think what we’re going through right now is the most significant, at least from a Canadian perspective, global geo-political shift in my lifetime,” Al Mussell, research lead at Agri-Food Economic Systems, told Farms.com.

“Canada was very much under the protective wing of the U.S., and that dynamic has changed. And the second thing was rules-based trade. Both of those have changed,” Mussell explained. “Our facts have changed. 

“Our industry leadership needs to step up and be prepared to look at things differently. Our provincial leaders need to be prepared to step up and think about the industries they represent as well as their roles nationally. And, of course, the federal government needs to step up and think about how they lead the charge.”

Canadians face “ongoing uncertainty on the trade front. That is important for us because so much of our agri-food products need to be exported since our production capacity exceeds the size of our market,” Mussell said.

We’ve seen trade concerns with canola, soybeans, pork and beef. We will likely have challenges with other commodity exports in the future “because the broader problem we have is increased uncertainty in trade access,” he added.

Diversification of farm products, increasing processing capacity, and focusing on domestic markets may help shield Canada from a risky global trade situation, but “none of this is easy,” Mussell said.

In situations of restricted exports, the government must review agricultural support programs.

“There have been concerns regarding business risk management programming and whether it provides a robust enough safety net for farmers. Now that comes into collision with problems around trade injury,” Mussell explained.

The United States has increased farmer support over the last two years, which typically means Canada must do the same. However, the nature of these programs can be difficult to determine, as “subsidy programs to support farm income kind of feed on themselves,” Mussell added. It becomes “sort of an escalating cycle.

“Into this whole mix, we have awkward timing of the announced payments for supply management having to do with CPTPP (the Comprehensive and Progressive Agreement for Trans-Pacific Partnership),” he said. “Anything that other commodities get will be judged against the $345 million” paid out to dairy farmers in the first year.

“It just leaves a state of conflict.”

That atmosphere of fracturing is apparent across the country. 

Canadians elected limited Liberal representation in the west, especially in rural communities.

“Not only does this fragment across commodities, but it fragments across provinces and across rural and urban,” Mussell said. “I hope that Canadians have a sense – and certainly, in agriculture, that we have a sense – that, at the end of the day, we all have to be able to work together. But we seem awfully fragmented now.”

Agri-Food Economic Systems released a policy note to “get people in the process starting to think through how we use ag and food as a portfolio that can help people get back to working together,” he added. “It’s an opportunity to work together but it’s also an opportunity for the whole thing to disintegrate.”

Additionally, the federal government has mostly ignored the potential for agriculture to help with climate change mitigation, Mussell said. But “you ignore it at your peril,” he said.

Singh_Lens\iStock\Getty Images Plus

 

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