Saskatchewan, Canada, October 24, 2004:
On October 15, the United States government leveled yet another
blow at Canadian agriculture. Prompted by a complaint by the
National Pork Producers Council (NPPC), the Commerce Department
put a 14 percent duty on Canadian hogs imported into the U.S.
The importer would pay the duty, and this will effectively
lower the price Canadian producers receive.
The basis of the complaint was dumping - the claim that Canadians
are selling hogs to the U.S. below the cost of production,
or below what they sell for in Canada. An earlier complaint
by American hog producers had claimed hog farmers in Canada
were unfairly subsidized. The U.S. Commerce Department threw
that complaint out, saying that, yes, Canadian hog farmers
were subsidized, but the subsidies were available to all farmers
and were not illegal under trade rules.
The NPPC is pretty blunt in its assessment of the situation.
It says its goal is to get Canadian hog farmers out of the
business and to raise more hogs in the U.S. Right now, Canada
exports about 7 million hogs a year to the U.S. This is about
7 percent of their total yearly kill.
Interestingly though, most of these pigs, about 5 million,
are weanlings and feeder hogs. Obviously, not all American
pig farmers support the NPPC complaint, since many farmers
in the U.S. have built a business around raising Canadian
pigs to slaughter weight. Iowa alone imported 2.7 million
young pigs in 2003. This amounted to 10 percent of Iowa's
The American version of all this is pretty simple. According
to the NPPC, the Canadian subsidies to pork production have
caused the Canadian hog industry to expand at a time when
the American industry was contracting due to low prices. The
Canadian industry, it claims, was insulated from the market
effects of low prices by government assistance.
There is indeed an amount of truth to that claim. When prices
have fallen, the provincial and federal governments have devised
a number of schemes to keep hog farmers in business. One of
the most lucrative was AIDA. Of course, the truth is that
almost all agriculture commodities are subsidized at some
time of another. This year, crop insurance will be the main
thing keeping some prairie farmers from going out of business.
Crop insurance is, of course, partly subsidized.
But the rest of the truth is that American farmers are in
exactly the same boat as Canadian ones. Their massive subsidies
to agriculture are aimed at keeping them in business when
the market fails to do so. And, as Canadian farmers have pointed
out, one of the reasons Canadian feeder pigs pour into the
U.S. is the very cheap corn and soybeans, courtesy of the
vast American subsidies to that sector.
The Americans might claim that their hog sector is not so
highly subsidized, but the fact is that all agriculture is
intricately intertwined. Cheap feed grains make it marginally
profitable to raise hogs. U.S. refusal to accept Canadian
cattle has driven the price down to where Canadians are eating
more beef and less pork, leaving more pigs to be exported.
And so it goes...
The fact is, agriculture is a mess for the most part. We
have too much product chasing too little market, and every
new crop variety that increases production, every new technology
that makes raising animals cheaper leads to greater production
as prices drop, and farmers try to increase production to
compensate. Meantime, 800 million people in the world go to
If you dropped in from another planet, you'd have to think
Earth was populated with and run by lunatics.
© Paul Beingessner, firstname.lastname@example.org
. The author is a columnist, transportation consultant and
third-generation farmer in Truax, Saskatchewan.