The food we eatCanadian farm exports snagged in world safety net
Canadian farm products have recently been banned in several countries, driving down prices at the farm gate; Canadians believe these restrictions have less to do with worries about food safety, and more to do with governments trying to placate the domestic farming sector in a recessionary period
A series of trade restrictions on Canadian farm products this year has ratcheted up the pressure on farmers, many of whom say the barriers reflect protectionism rather than genuine concern over food safety. From China to Europe, various foreign markets have banned shipments of Canadian-produced raw materials for cattle feed, vegetable oil, linoleum flooring, and hot dogs, driving down prices at the farm gate.
Reuters’ Rod Nickel reports that making matters worse, the trade bans causing farmers so much pain seem strangely arbitrary to many Canadians.
“A lot of it comes down to recessionary (pressure) that they’re under,” Canadian agriculture minister Gerry Ritz said on Wednesday. Export markets “tend to get more protectionist as they safeguard their own folks.”
As for the specific restrictions, Ritz said: “Some are based on a bit of reality, some are a real stretch.”
Whatever the basis for trade restrictions, the results are clear. ICE Canada canola futures RSX9 plunged 4 percent last week with news China would not accept Canadian canola with blackleg disease. Prices of flax, cattle, and hogs, which have also been targeted, are also under pressure.
Much of the price pain traces to disingenuous safety concerns, Canadian agriculture sources say. In particular:
- China’s ban on Canadian and Australian canola with blackleg targets a disease already present in China. Some analysts believe China is seeking to draw down its supply of canola, which is crushed for use in vegetable oil.
- Four Canadian canola-crushing plants owned by Cargill [CARG.UL], Viterra (VT.TO) and two by Bunge (BG.N) are under U.S. shipping restrictions because of salmonella bacteria in meal shipments. Salmonella is a serious concern in human food, but canola meal is cattle feed. Some believe the Obama administration is scoring political points based on food-illness fears. Even so, U.S. food safety officials maintain that animal feeds can act as vehicles for transmitting harmful bacteria to humans and animals.
- A U.S. country-of-origin labeling law has sharply reduced Canadian cattle and hog exports to the United States. Some U.S. packers and farm groups oppose the law, causing Canadian farmers to suspect reflects effective lobbying by certain cattle groups rather than food traceability concerns.
Restricting imports gives an immediate boost to local farmers, said William Kerr, a professor in agricultural economics at University of Saskatchewan.
Canada, which is under more trade restrictions at one time than usual, is a target because it is a big farm product producer, Kerr said.
