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NPPC Asks Canada to Stop Subsidising Hog Production

by 5m Editor
18 June 2012, at 8:48am

US - In discussions with Canadian federal and provincial government officials, the National Pork Producers Council asked that Canada stop its hog subsidy programs before entering the Trans-Pacific Partnership (TPP) trade talks. It pointed out that if similar programs existed in the United States, US pork production would more than double in 10 years, adversely affecting the Canadian hog market.

[The TPP is an Asia-Pacific regional trade agreement that currently includes the United States, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Viet Nam. Subsidy programs are not within the scope of the TPP negotiations.]

Looking only at the Quebec subsidy program, Iowa State University economist Dermot Hayes estimated that a similar US program would increase pork production in the United States by 8.4 per cent annually. Over 10 years, an additional 140 million hogs would be marketed, with Iowa alone adding 41 million animals to that number. (Currently, about 110 million hogs a year are marketed in the United States.)

“The Canadian subsidy programs distort the North American hog and pork market, limiting the growth of US production, employment and profitability,“ said Doug Wolf, NPPC’s immediate past president and chairman of its trade committee. “Canada’s entry into the TPP negotiations should be contingent on renunciation of its trade-distorting subsidies.“

Dr Hayes has calculated, for example, that over five years Ontario’s Risk Management Program, which would boost Canadian hog production by more than 606,000 animals, would cut US pork production by more than 430,000 hogs worth more than $73 million and cost nearly 600 US pork industry jobs.

In response to criticism of its subsidy programs, Canada has pointed to the US Mandatory Country-of-Origin Labeling (MCOOL) law, which the World Trade Organization last November said violates US trade obligations. But the US pork industry did not support MCOOL, and NPPC is urging the United States to comply with the upcoming WTO appellate ruling on the US appeal of the earlier decision.

“You can’t argue that MCOOL distorts the hog markets then ignore the far greater impact of the Canadian subsidy programs,“ Mr Wolf said.