TRUAX,
Saskatchewan, Canada, September 25, 2003: Farmers
in Canada feel under siege. Though this feeling has taken
a quantum leap forward with the BSE crisis and American wheat
tariffs against Canada, it has nevertheless been building
for decades. Most Canadian farmers are increasingly reliant
on exports and prices for these have been stagnant for two
decades. World markets no longer seem to respond to price
signals that once drove prices up when world grain stocks
plummeted. Input costs rise continually, and generally much
faster than inflation.
If Canadian farmers feel under siege, and so they should,
imagine the despair that is gripping farmers in Third World
countries as they see world markets flooded with cheap products
from wealthy countries that dump them into these markets.
(As an aside, it is politically incorrect now to talk about
"Third World" countries. They are "developing"
countries. In fact, much of the Third World is sinking deeper
into poverty and becoming less "developed".) How,
for example, can the Mexican farmer with a hoe and maybe a
single small tractor grow corn to compete with the American
farmer receiving massive government subsidies to produce 200
bushel an acre corn on thousands of acres? The North American
Free Trade Agreement (NAFTA) opened Mexican markets to American
ag exports and is devastating the Mexican farm economy.
The answer to all these problems was supposed to come out
of the World Trade Organization conference in Cancun, Mexico.
According to countries like the U.S. and Canada, that answer
is more trade, more exports and an opening of hitherto closed
markets. And while governments and some farm organizations
get all excited by this prospect, farmers in general give
a cynical shake of their heads. They've seen it all before.
Like when we signed the Canada/U.S. Free Trade Agreement
in 1989 and the NAFTA in 1994. The problems facing the ag
sector were to be solved by an increase in trade. Canadian
farmers responded with gusto. Canadian agri-food exports rose
from a value of $10.9 billion in 1988 to $28.2 billion in
2002. This near-tripling of exports resulted in a staggering
increase in realized net farm income in Canada from $3.9 billion
to $4.1 billion in the same time period. Staggering, because
when adjusted for inflation, it represents a 24 percent drop
in income.
Now, Canadian farmers, and farmers across the rapidly shrinking
globe are being told that more of the same, on a much larger
scale, will solve their problems. If Canadian farmers have
trouble falling for this one again, imagine how hard it must
be for farmers in India or Egypt. Many Third World countries
have suffered as brutally as their farmers in this new economic
world order. These countries had a small surplus in the food
trade balance in the late 1970's. That means the value of
their food exports exceeded the value of food they had to
import. Today, that surplus has become a deficit of $6 billion.
It is projected to grow to $18 billion in 12 years.
The Cancun meeting saw something almost unprecedented in
world trade talks. For almost the first time, poor countries
banded together in a block to oppose the position taken primarily
by the European Community and the U.S. Led by India, China
and Brazil, the so-called G21 demanded an end to subsidized
dumping and greater access to markets in rich countries. All
this would not be inconsistent with the official line of the
rich countries except for one thing: the G21 are saying they
do not want to give up their own subsidy programs or further
open their markets to the rich countries until they make back
some of the ground they lost.
Nor is it some Third World fantasy that the agriculture sector
in poor countries has suffered as a result of increasing world
trade. The UN's Food and Agriculture Organization acknowledges
that the last round of world trade talks, the Uruguay Round,
worked for wealthy countries and disadvantaged the poor.
Canada tried to talk the good talk in Cancun. Trade Minister
Pettigrew agreed that the trade playing field must be re-balanced
to undo some of the harm done to poor countries by prior WTO
agreements. But, having hitched its wagon to the horse of
increasing exports, the Canadian government continues to push
for greater trade access to the markets of those same countries.
Unfortunately for this strategy, Canadian farmers are beginning
to realize that increasing access to the markets of a world
that is essentially saturated with cheap food and dominated
by a few multinational food companies will not bring any greater
good.
The search for real answers is more complex. Canadian farmers,
and farmers worldwide are beginning to realize this. There
is a lot of work to be done.
© Paul Beingessner, beingessner@sasktel.net . The author
is a columnist, transportation consultant and third-generation
farmer in Truax, Saskatchewan.
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