Saskatchewan, Canada, August 24, 2004:
A fellow I know works for the provincial crop insurance corporation
here in Saskatchewan. A recent comment he made took me a bit
by surprise. "You have no idea just how bad it is out
Well, actually, I can guess. For example, recent numbers
from Statistics Canada say the Canadian cattle population
has ballooned to the highest level in history. That means,
of course, farmers still have a lot of cattle on their farms
that they would have sold, but for the awful prices. Calves
from last year, older cows that have seen one too many winters,
bulls that would have been retired to the sausage factory.
All these represent foregone income.
The BSE crisis came on top of a poor crop production year
in 2003 as most of western Canada baked under a summer-long
heat wave. Despite relatively poor crops, prices were nothing
to get excited about. So it isn’t surprising it's really
bad out there. The surprise is that farmers and ranchers are
still hanging on.
This summer, the crop picture is different. Across much of
the prairies, crops are excellent. There is only one problem.
With the end of August approaching, millions of prairie acres
are still grass green. It is scarcely possible to imaging
these crops maturing before a hard frost takes its toll on
quantity and quality.
So, yes, I can imagine just how bad it is out there. And
not only for farmers. Businesses small and large are also
feeling the pinch, in rural and urban areas.
Perhaps all this explains the ever-more radical sounds coming
from Alberta – the heart of conservatism. The latest
is the effort by a group of feedlot owners to launch a NAFTA
challenge to the American government over the closure of the
border to Canadian cattle. There was also the recent blockade
that prevented American-owned cattle from getting into a packinghouse
in Alberta. This was organized by some of the same cattle
The NAFTA challenge was discouraged by federal and provincial
governments, as well as the Canadian Cattlemen's Association.
The prevailing theme here seemed to be that making the Americans
angry would only be counterproductive. R-CALF USA members
echoed that sentiment recently.
It is an interesting notion – that world trade is conducted
based on how much you like someone and how nice they are.
Interesting, that is, because it is so nonsensical. Trade
is conducted, like every economic activity, because the parties
to the trade each believe it is to their advantage. When the
U.S. re-opens the border to Canadian cattle, they will be
bought and sold based on this principle.
Proof of this is found in the fact that companies engaged
in bitter lawsuits will continue to do business with each
other before, during and after the lawsuits. Countries allow
trade with their most bitter enemies, even while railing against
them in the court of public opinion.
The Alberta feedlot owners know the risk of retaliation is
small – small, especially, when compared to the surety
of financial disaster if the Americans continue their illegal
border closure. Rather than standing back and watching, Canada's
governments should join the suit against the American government,
or else launch their own. History shows little evidence that
the policy of appeasement has worked before. It isn’t
likely to any time soon either.
The NAFTA challenge, given the cost associated with it, and
the time required for completion, is an act of desperation.
It comes from the fear that the border may remain closed indefinitely.
While the politicians initially were reassuring us the border
would open based on the science of the issue, that is, when
we were in compliance with OIE requirements, they are not
saying much about that any more. Their inability to solve
this problem has given rise to the actions from Alberta. Nor
is this likely to be the last of such initiatives. There has
also been talk of border blockades and boycotts of things
Desperate times call for desperate measures.
© Paul Beingessner, email@example.com
. The author is a columnist, transportation consultant and
third-generation farmer in Truax, Saskatchewan.