Bad News For Farmers

"There's no doubt the WTO is not going to be a friend of either supply management or the Canadian Wheat Board," Trade Minister Jim Peterson said after the deal was signed.

The Wheat Board has a monopoly on grain exports from the Western provinces, and supply management protects egg, dairy and some other producers.

The framework deal approved by consensus of the 147 members of the WTO will:
- Cut export subsidies on farm products;
- Cut import duties on farm products;
- Require state trading enterprises to stop trade-distorting activities.

Canada says the board does not distort trade, but other countries disagree.

The WTO plan is not final; it just sets the general outline for detailed negotiations, starting in September.

But the European Union's attitude is clear. "In our view, in the way the wheat board operates, we think there are certain elements of export subsidization involved," Franz Fischler, the EU's commissioner for agriculture, rural development and fisheries, said in June.

"If we now discuss the total phasing out of export subsidization, then all forms means all forms from the Canadian Wheat Board. This must be absolutely clear and there can't be any doubt," he added.

The agreement could threaten the survival of the board, said Ken Ritter, board chairman.

"We, as a nation, have to carefully review what we're going to do here because farmers in Western Canada are on their knees," he told Canadian Press.

The fall talks mean it's too soon to write off the board, said Bob Friesen , president of the Canadian Federation of Agriculture.

"We will continue to vigorously negotiate so that other countries will realize that the monopoly on its own simply empowers Canadian farmers in the ... international marketplace," he said.

"We know very well that it's huge transnational exporters that really have the biggest problem with the Wheat Board because, quite frankly, in many international markets we are outcompeting them."

But Peterson said Canada was outnumbered 146 to one at the WTO meeting, which suggests it will be hard to make ground in the next set of talks.

Friesen said that if the talks lead to the U.S. and Europe lowering farm subsidies, Canadian farmers will be better positioned to to compete in world markets.

http://www.cbc.ca/story/canada/national/2004/08/02/wheat040802.html

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