World markets for agricultural products are fragile things, as Canadian producers are keenly aware.
It seems strange that in a world where many still go to bed hungry most days, food products don’t flow with almost no barriers. After all, feeding the population should be a paramount concern.
It’s clearly not the situation though.
Politics trump feeding the hungry, and the profitability of farm producers.
We saw that with the tariff wars of European Union and United States coffers a decade or so ago.
We saw it from the extended trade barriers built when bovine spongiform encephalopathy (BSE) was found in a lone Canadian cow back in 2003.
While the initial border closures might have been justified in light of a lack of understanding regarding how widespread BSE might be, science soon came out on the side of the case not being a threat to consumers, but many borders hide behind BSE as a trade barrier.
It’s all rather intriguing in a world where politicians outwardly champion the concepts of free trade among nations, but many quickly hide behind anything they can to bolster their position in trade.
In Canada we have a rather narrow focus to sell farm products abroad. Our land base allows for huge production, and our small population of consumers use up only a small portion of that production.
We have had the foresight in the past to create a few key supply-managed systems for dairy and poultry products to ensure production profits and consumer food safety and supply assurances. That said, those sectors are eventually to be sacrificed to the idea of free trade deals. I for one am not happy with the idea of my ‘fresh’ milk arriving from Mexico.
But back to the fragile nature of world markets, and how they impact farmers.
China recently agreed to delay introducing stricter rules on shipments of canola from Canada.
It had appeared new rules were imminent which would have increased costs in terms of Canadian canola making it into Chinese markets.
China had stated the tougher import rules were necessary to prevent the spread of blackleg disease from Canadian canola into Chinese crops of rapeseed (the base for canola).
The Chinese have suggested tightening the allowable limits for foreign matter in ships.
Industry participants say the new standard, under which China would reduce the amount of foreign matter allowed per shipment to no more than one per cent from 2.5 per cent, which would increase cleaning costs.
Just a day before the new standards were due to go into force, however, Justin Trudeau, the Canadian Prime Minister, and Li Keqiang, the Chinese Premier, announced Canada would be able to continue with the current canola export regime while a longer-term solution was worked out.
That they stepped back from the edge of new rules at the last minute suggest a compromise deal will be forged.
China is Canada’s top export market for the oilseed, and China is a huge importer. It accomplishes little to impact the relationship dramatically.
But that it came down to the wire shows again how a market can be threatened based on changing a rule long in place. The market is not likely to stay any closer to the status quo than the Chinese postured. That just brings into question whether there was a threat to Chinese rapeseed, or whether it was simply political sabre-rattling.
