Ottawa says its approach to international ag talks is balanced. Our critics say we just want to get into other
countries’ markets without opening up supply management so they can get into ours.
Liberal and Conservative governments have supported supply management for decades and for good (political) reason. The programs are extremely popular with their farmers who also happen to be a key constituency for any party hoping to put together a national government. But there are rumblings that along with the benefits, these programs also have costs. And some of this talk is coming from what might seem like an unexpected source — a former top policy maker from the Ontario civil service.
Read Also
Producers aren’t panicking over tariffs and trade threats
The Manitoba Canola Growers Association (MCGA) surveyed its members this spring to get a sense of how trade uncertainty was…
Bob Seguin, a former assistant deputy minister in both the agriculture and trade portfolios, sat down at his computer earlier this year to write a special policy analysis for the Guelph-based think-tank the George Morris Centre, where he’s now the executive director. It’s an eye-opening document that suggests Canada is losing trade opportunities by cleaving too closely to national trade policies in an age of international trade.
Country Guide:Probably the most surprising charge in your report is that we’ve never really taken the trouble to calculate what some of our agriculture policies cost other agriculture sectors. Is that really true?
Seguin:We haven’t looked at it boldly and clearly, and we need to. We need to really understand what the costs are of our policies — and the costs of making changes to those policies — and not just on the supply-managed systems, but across the board.
Right now we know there are costs, both for other sectors of the economy, other sectors of agriculture and even for some of the sectors that advocate for the status quo policies. What we don’t know is exactly what they are. For example, do our dairy policies mean that our grain producers are losing market opportunities? And do they also limit growth in the dairy industry?
Do we fully understand all the implications in the big picture? I would argue that right now we don’t.
CG:Can you explain how policies in one sector might hinder farmers in others?
Seguin:We have basically two distinct types of commercial-scale agricultural producers. We have those producing for the domestic market such as poultry, egg and dairy, and even some horticulture farmers. Then we have those producing products for both domestic consumption and export, such as grain growers and beef and pork producers. In these commodities and processed food, we’re significant exporters and we depend on secure foreign market access.
Increasingly, that access is coming through trade agreements — both multilateral agreements with many countries and bilateral agreements between two countries. By saying that there are areas we just won’t go, we’re limiting our negotiating position and possibly even our involvement in the negotiations.
For example, the Trans-Pacific Partnership negotiations (which include the U.S., New Zealand and Australia, along with several Asian nations like China and Korea) have indicated they’re willing to talk about structural reforms to their agricultural policies. Canada should be at the table, but we’re not there in part because we won’t look at all areas of our agriculture and food policy. This clearly will have an impact and a cost to other farmers and the Canadian economy as a whole.
We should be at the table. It is when we’re not at the table that we won’t like the results — but our competitors will.
CG:Supply management is a very political issue and the farmers who participate not only like the system, they have invested heavily in it. Given that reality, do you see much likelihood of progress?
Seguin:I think you can — but you have to start by really understanding what all the benefits and costs are, and who bears them. Without doing that, you can’t make an informed decision.
I think I should clarify that I’m not necessarily saying that we absolutely must do away with some of these agriculture and food policies. We need to do all the work to determine the costs and benefits and then decide if what we might gain will offset what we’ll lose. I’m not advocating just entering such trade negotiations and giving away the store here. But we can’t really understand what such negotiations can accomplish until we really examine all their effects, good and bad. And at least then we will know that the whole issue was properly discussed.
CG:Why is it important that we do this now? These policies have been in place a long time, yet I sense as we talk that you feel strongly we can’t keep kicking the can down the road.
Seguin:It’s the scope of the opportunities that we’re now talking about. The most recent outlook from the UN’s Food and Agriculture Organization and the OECD (Organization for Economic Cooperation and Development) argues there will be substantial growth in consumption and price for a number of major agricultural products, including both grains and livestock products between now and 2019. That’s happening for reasons we’re all aware of — greater prosperity in emerging economies along with population growth, reduced capacity of some competitors, and other factors.
We’re well positioned to take advantage of this but it’s by no means guaranteed that it will be Canadian farmers and food processors who supply these markets. Brazil and Chile, for example, are investing heavily in their agri-food sectors to make them even more competitive than they already are. Canada has a well-developed agricultural and food sector, abundant natural resources and well-developed infrastructure. This puts us in a strong position to produce safe, healthy and sustainable food for domestic and global consumption. But we have to accept that we’re a trading nation and always will be, so we must evaluate our policies with that reality in mind.
CG:In many ways it also seems like an East versus West issue, with many of the export-oriented industries in the West and the domestic industries in the East. It raises an important question — can a fair and equitable agriculture policy really be designed for a country that’s as large and varied as Canada?
Seguin:I think it can be done — but it’s not easy. The U.S. has undertaken this challenge on trade negotiations since the Second World War. Theirs is certainly not a perfect system, but in many ways it’s more transparent and you can see the trade-offs, infighting and political machinations that go into it.
CG:What’s our first step?
Seguin:I think we have a public-and private-sector capacity shortfall. Right now we simply don’t have the capacity to do the analysis that will allow us to determine what the best path might be. We need to have more analysis and discussion. We need to think about this whole issue more broadly, deeply and dynamically. But the first question we need to ask is, “Do we really have the expertise?”
As there get to be more and more trade negotiations happening at the same time — there might be 10 or 12 negotiations of various types — given our limited resources, how do you handle that? I would say how you discuss it at the beginning will have a significant impact on the final decisions and how we make changes to best obtain the desired results.
CG:These statements are a bit surprising from an Ontarian. Do you need a bodyguard?
Seguin:(chuckles) No, not yet. I think people, even in the sectors that enjoy some of these benefits, are beginning to recognize that we do need to at least have this discussion.CG
To read Bob Seguin’s entire report, visit the George Morris Centre website at: www.georgemorris.org.
